I’m currently an LLC and looking to assemble an equity deal with an advisor. I don’t know how to set it up with him where he gets his equity in the future when we restructure the entity to a c/s Corp and give out his shares. It doesn’t make sense for us to switch now and get double taxed when we haven’t lifted off the ground. This is pre launch. Any advice?

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Dont create unnecessary expenses or new entities when you have not launched yet. Talk to biz lawyers yourself (biz counsel works well) to be informed and find template and run it them. When taking a start up off the ground, we believe in the idea and the people. The advisor trust you enough to invest his time in you and in return you pay him when you make money. So just ask him what service he can perform for you (e.g. attend 30 minutes monthly board meeting, find potential customers, attend client pitch calls etc) and how much he would like to get compensated in equity. If you start giving out equity just like this without even knowing what the person can add value you will not have much left to share with your potential employee, legal team, other potential partners etc. happy to chat over the phone.

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I like it.yeah no equity for initial discussions. It should be staggered as well. .2% every quarter over 2 year max out at 1.5%

Are you intending to get venture funding down the road? You can issue membership units with features similar to stock options and they would convert as part of your conversion later. For advisors, I would put into place an advisor agmt with a 1 or 2 year term as your needs as a company will change over time. A good business lawyer can. assist. If they units are not "exercised" they should not be taxed at conversion .

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