Equity in a project but not in company


Can I give someone stake/equity/shares or similar for a project in the company without giving that person any equity in the company?

If not, has anyone found ways to accomplish something similar?

This is for FL based company.


Equity USA Project Shares Florida

asked Nov 2 '13 at 08:32
Javier Figueroa
106 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

2 Answers


What are you trying to achieve? This easiest way would be to setup a revenue-sharing deal. Person X gets 30% of all sales of the product for the next 2 years. That's as close as equity without getting into legal trouble. This is standard for sales people, but you can use the same structure for key contributors. Just don't abuse this and be very selective with who you bring onboard.

answered Nov 2 '13 at 10:41
Alain Raynaud
10,927 points


In the US you have several different kinds of business. You'll have to talk to an attorney about which one suits you best, and I'm not an attorney. But I'll summarize for you my understanding of what may be practical for you. I'm assuming that you're capable of doing the proper accounting.

  1. Partnership - several kinds (limited, limited liability, limited liability limited): you can define attribution of income, losses and capital separately and independently. So for partnership its easy to define that one partner will get all the income and/or losses attributed to a specific activity, and keep the capital account (similar to equity in corporations) zero.
  2. LLC - same as partnership in this regard, legalities differ for the business itself. Not every activity can be put under LLC.
  3. S-Corp - cannot be used to solve your problem, since you only are allowed to have a single class of shares. I.e.: dividends are distributed equally to everyone, you cannot exclude certain shareholders or distribute only to certain shareholders.
  4. C-Corp - you can create a separate class of shares for which dividends will be based on your specific activity. You can also attribute different voting power, etc.

You'll have to talk to a lawyer (and a tax adviser) about which option is the most suitable for your specific needs, but to me it looks like a partnership or LLC would be the easiest to achieve what you want. For C-Corp - you'll have to give some equity.

You should, of course, have the agreement be drafted by an attorney and ensure proper representation for everyone to avoid later claims of invalidation/duress/fraud.

answered Nov 2 '13 at 10:16
5,090 points

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Equity USA Project Shares Florida