Negotiating Favorable Executive Equity Terms in an LLC — Capital vs. Profit Interests

  • The difference in taxation of profits and capital interests,
  • The advantages that an LLC profits interest can offer over a corporation’s equity interest, whether stock or options, if significant equity appreciation is likely,
  • The importance of determination of profit interest threshold amount,
  • Important protections to assure your share of the value appreciation if the LLC succeeds,
  • Other valuable protections to assure your right to a cash payout with others if the LLC succeeds.

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