# Sweat Equity

**URL:** <https://discussion.mainstreetbusinesspodcast.com/t/sweat-equity/472>\
**Category:** Legal Questions\
**Created:** [June 30, 2024, 11:58am UTC](https://discussion.mainstreetbusinesspodcast.com/t/sweat-equity/472 "2024-06-30T11:58:42Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![scj1226](https://avatars.discourse-cdn.com/v4/letter/s/ec9cab/32.png) [@scj1226](https://discussion.mainstreetbusinesspodcast.com/u/scj1226)\
**Post date:** [June 30, 2024, 11:58am UTC](https://discussion.mainstreetbusinesspodcast.com/t/sweat-equity/472/1 "2024-06-30T11:58:42Z")

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Dear Mark and Mat,

I am funding the purchase of a business and will be forming an LLC for this new venture. Initially, my son and nephew will manage the daily operations for minimal compensation, with the agreement that they will earn up to 24.5% equity each over a period of several years. Could you advise on how to structure their early compensation and any potential adverse tax implications as they reach their maximum equity positions?

Thank you.

Scott

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**Author:** ![system](https://us1.discourse-cdn.com/flex046/uploads/msbpod_openforum/original/1X/42f4af5f452c22dd6feece9c5b47d6a5185fa706.png) [@system](https://discussion.mainstreetbusinesspodcast.com/u/system)\
**Post date:** [July 24, 2024, 6:24pm UTC](https://discussion.mainstreetbusinesspodcast.com/t/sweat-equity/472/2 "2024-07-24T18:24:13Z")

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Fielded your question today on the Open Forum show recorded July 24. Should be posted in a couple of days. Thank you for the question! Mark and Mat