I started work at a company a few months back. I was brought in to head up a new division in the company. That division is separating as it's own LLC. I won't be investing any money into the new company but will be granted 15% ownership in the company due to sweat equity and being a part of the startup at inception.
What are the upsides and downsides for me of this type of partnership; in terms of liability and taxes?
Answer is written assuming you're in the US. If you're elsewhere - laws are different and this may not be valid.
LLC's don't distribute dividends, unless they're explicitly electing to be taxed as C-Corp. Assuming your LLC doesn't make such election (not much sense doing LLC then anyway), the tax situation is different.
There are many other pitfalls, and of course benefits. Talk to a professional about all of this, making the right choices now can be very important later on.
You should receive 15% of any dividends declared which you will have to pay tax on. The first "L" in "LLC" implies that you will have limited, i.e. very little, liability, but the specifics depend upon your jurisdiction.
In general, it is good news, although if the board doesn't elect to distribute profits (if any) as dividends, your 15% of zero isn't worth anything.