Admitting New Partnership Members: Tax and Non-Tax Considerations
Partnerships and Limited Liability Companies are characterized by their flexibility. Partners can be admitted to raise new capital, help the partnership grow, or facilitate the retirement or resignation of other partners. Yet, the admission of new partners can have a dramatic impact on the economic arrangements of existing and new partners. This program will discuss the tax and non-tax consequences of the answers to three crucial questions: What is the new partner bringing to the table – property or services? What does the new partner get – income participation or a capital interest? And what type of assets does partnership have – operating or income assets? This program is specifically designed to answer these questions for non-tax specialists who advise businesses operating in the partnership or LLC form.
- Property v. Services: What is the new partner bringing?
- Capital v. income interests, common or preferred: What does the new partner get?
- Operating v. investment assets: What type of assets does the partnership have?
- Control and exist rights
- Decision points about economic arrangements
Brian E. Ladin is a partner in the Westlake Village, California office of Ernst & Young, LLP, where he specializes in the taxation of partnerships and joint ventures. He has more than 20 years experience in the federal taxation of partnerships, with an emphasis on tax issues associated with real estate, private equity, and hedge funds. He also has extensive experience in the areas of partnership formation, tax planning and structuring, and operations. He formerly served as an Adjunct Professor at the University of Southern California, and has written and lectured extensively on partnership tax topics. Mr. Ladin is a Certified Public Accountant. He received his B.A. from Northern Illinois University and M.S. in taxation from DePaul University.
