Description
A range of alternatives is available to partnerships and LLCs for providing equity compensation to their employees, including granting profits interests, capital interests, and options to acquire such interests.
Partnership and LLC equity compensation arrangements present executive compensation counsel with complex design, structuring, and tax challenges, unlike corporate equity compensation. Advisers must consider current tax law to effectively structure compensation for key executives and avoid unintended tax liability.
IRS guidance is limited on several important issues, including partners/members as employees for tax purposes, how Section 409A applies, and when 83(b) elections should be made.
Listen as our authoritative panel offers solutions and strategic approaches for structuring equity compensation for partnerships and LLCs and avoiding common pitfalls that can lead to disastrous tax consequences.
Presented By
Ms. McDaniels has over two decades of experience advising clients on compensation and benefits matters. She counsels companies across multiple industries at all stages of their life cycle--from startups to multinational corporations--on both day-to-day matters and transformative events. Ms. McDaniels also advises boards of directors, executives and investors.
Mr. Patel, Global Head of White & Case's Employment, Compensation and Benefits practice, advises clients on the full spectrum of executive compensation and employee benefits issues. His significant experience and knowledge in this area has made him a valued resource for a range of US and international clients, including public and private companies, boards of directors and executives.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, January 13, 2026
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Equity compensation alternatives available to partnerships and LLCs
A. Profits interests
B. Capital interests
C. Options to acquire capital or profits interests
D. Phantom arrangements
E. Income tax consequences/advantages/disadvantages
II. Design, structuring, and implementation considerations
A. Section 83(b) elections
B. Capital account book-ups and valuation
C. Section 409A considerations
D. Impact of new fee waiver proposed regulations
E. Impact of partner/member status on being an employee
F. Impact of partner/member status on employee benefits
G. Conversion to C corporation
The panel will review these and other key issues:
- How does a capital interest differ from a profit interest, and what tax ramifications result from the type of equity interest granted?
- How does Section 409A apply to equity interests in LLCs?
- How does the Section 83(b) election apply to unvested interests?
- Can the partnership or LLC member receiving the equity interest also be an employee of the entity?
Related Courses
Structuring Equity Compensation for Partnerships and LLCs
Tuesday, January 13, 2026
1:00 p.m. ET./10:00 a.m. PT
