Attain Business Goals With Profit Interests

As a special type of equity-based compensation used by limited liability companies profits interests can bring a range of benefits to shareholders. Profits interests can help attract, retain, and reward key employees, and offer an opportunity to share in future earnings, increases in equity value, or proceeds from a sale of the company. When used strategically, profits interests can support business growth and value creation objectives, potentially offering more income and wealth to employees, investors, and shareholders. To put profits interests to best use, stakeholders need to understand several factors about what profits interests are and how they work.