Instead, the partnership`s income, losses, deductions and credits are passed on to each partner who reports these sums and pays taxes, as part of their own personal income tax return. There are a number of reasons why partnerships and NPCs are popular with professional services firms such as law and accounting firms. These reasons include historical regulatory restrictions on corporate operations, as well as the freedoms that partnerships and NPCs offer in this regard in the areas of internal management agreements and capital maintenance. Tax transparency (i.e. profits are only taxed in the hands of the partners and not in the context of the partnership or LLP) has been an important driver of the use of partnerships and LLPs for investment purposes. . . .