Description

There are many equity-based compensatory alternatives available to LLCs, each with their own tax consequences for the LLC and the recipient of the interest. In addition to unrestricted or restricted capital interests and profits interests, the LLC can issue options to acquire an interest or “virtual options” in the form of appreciation rights. There is no right choice among these alternatives. Instead, in choosing from the alternatives the LLC is essentially balancing the tax effect on existing versus prospective members, the LLC itself versus it members, and the certainty of tax outcomes versus potential tax benefits. This program will provide you with a practical guide to equity based compensatory interests in LLCs and their financial and tax consequences.

• Framework of compensatory LLC interests
• Revaluation of LLC assets & capital shifts on issuing compensatory interests
• Employee v. member status for service providers
• Issuance of unrestricted & restricted capital interests and profits interests
• Options and virtual options to acquire LLC interests

Leon Andrew Immerman is a partner in the Atlanta office of Alton & Bird, LLP, where he concentrates on federal income tax matters, including domestic and international tax planning and transactional work for joint ventures, partnerships, limited liability companies and corporations. He chairs the Committee on Taxation of the ABA Business Law Section and is chair of the Partnership and LLC Committee of the State Bar of Georgia Business Law Section. He is also a member of the editorial board of Business law Today and co-author of Georgia Limited Liability Company Forms and Practice Manual (2d ed. 1999, and annual supplements). Mr. Immerman received his B.A., magna cum laude, from Carleton College, an M.A. from the University of Minnesota, an M.A. and Ph.D. from Princeton University, and his J.D. form Yale Law School.