
Startup Tips: Issuing Profits Interests
You just invested money to start an LLC. Now you want to bring in partners to manage the company or help with the work and offer them some form of equity compensation. How do you go about doing that? Unlike corporations, LLCs cannot issue restricted stock, stock options, or the like. But LLCs have an easy and tax efficient alternative called a “profits interest.” Profits interests can provide many benefits for their holders. The holder of a profits interest is a member of the