What is the best way to receive equity compensation for work as a consultant?

The answer as to how much equity to give an investor depends upon a variety of factors. One way to look at the situation is to try to place a value on your business. Once you have determined an appropriate value for your business, then determine how much money an investor is providing the business. From here you could figure out the percentage of equity based upon the investment and value of the business.

The answer as to how much equity to give an investor depends upon a variety of factors. One way to look at the situation is to try to place a value on your business. Once you have determined an appropriate value for your business, then determine how much money an investor is providing the business. From here you could figure out the percentage of equity based upon the investment and value of the business.

Your maintenance obligations will largely depend on what is written into the software agreement between you and your partner. If you and your partner agree you can have a very broad or very limited obligation, but it should be clear so you avoid any disputes in the future. A comprehensive agreement can include any provisions you and your partner agree on as long as it does not violate State Law or Public Policy.

I would look at the provisions related to taxes, intellectual property, and non compete provisions. I suggest you review the terms with an attorney before signing.

LLCs are "pass-through" entities for tax purposes. In other words, there is no income tax due on the company level. The distributions "pass through" to you and you report them on your personal tax return. This prevents double taxation.