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Structuring Equity Compensation for Partnerships and LLCs; the New Tax Reform Law Considerations

Recording of a 90-minute premium CLE/CPE webinar with Q&A

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Conducted on Tuesday, January 30, 2018

Recorded event now available

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This CLE/CPE course will provide employee benefits counsel with an overview of the types of equity compensation arrangements available to partnerships and LLCs. The panel will review the impact of the new tax reform law passed in late 2017. The panel will discuss tax consequences, advantages and disadvantages, design and structuring, and implementation considerations.

Description

Several alternatives are 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 and structuring challenges, unlike corporate equity compensation, which is relatively straightforward.

IRS guidance is lacking on a number of important issues, including whether a partner/member can be an employee 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 for avoiding common pitfalls that can lead to disastrous tax consequences. The panel will review the impact of the new tax reform law passed in late 2017.

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Outline

  1. Equity compensation alternatives available to partnerships and LLCs
    1. Profits interests
    2. Capital interests
    3. Options to acquire capital or profits interests
    4. Phantom arrangements
    5. Income tax consequences/advantages/disadvantages
  2. Design, structuring and implementation considerations
    1. Section 83(b) elections
    2. Capital account book-ups and valuation
    3. Section 409A considerations
    4. Impact of fee waiver proposed regulations
    5. Impact of partner/member status on being employee
    6. Impact of partner/member status on employee benefits
    7. Conversion to C corporation

Benefits

The panel will review these and other key issues:

  • How will the new tax reform law impact executive compensation structures?
  • How does a capital interest differ from a profit interest and what tax ramifications result from the type of equity interest granted?
  • Should a Section 83(b) election be made for unvested interests?
  • Can a partner or LLC member receiving an equity interest also be an employee of the entity?

Faculty

Bintz, Edward
Edward E. Bintz
Partner
Arnold & Porter

Mr. Bintz specializes in employee benefits and executive compensation. He represents clients on a broad range of...  |  Read More

O'Connor, Brian
Brian J. O'Connor
Partner
Venable

Mr. O'Connor co-chairs the firm's Tax and Wealth Planning Group and provides tax advice to partnerships...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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