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48 C CORPORATION LIMITED LIABILITY COMPANY Management • A C corporation is governed by a Board of Directors that designates officers to manage day-to-day operations. • Certain major decisions need to be approved by the stockholders. • A well-developed body of corporate case law and statutes provides greater certainty about rights and responsibilities, though less flexibility than other structures. • Management initially vested in members who can delegate management responsibilities to a managing member, non-member manager or board of managers. • Major decisions typically must be approved by the members. • Business structure is flexible and primarily determined by the members and set out in the limited liability company agreement. Employee Incentive Considerations • Stock options • Stock appreciation rights (SARs) • Restricted stock • Restricted stock units (RSUs) • Performance awards • Profits interests • Non-qualified options (to acquire a membership interest) • Other equity compensation arrangements can be deployed but are uncommon. • Receipt of LLC units can be disadvantageous to employees who may become "partners" under U.S. tax law. Capital Raising Considerations • C Corporations raise capital through the issuance of equity (stock) and the incurrence of debt. • C Corporations are the most common form of publicly traded companies. • LLCs raise capital through the issuance of equity (membership interests) and the incurrence of debt. • LLCs are not typically publicly traded and may be required to restructure prior to an IPO, which may result in taxation for members depending on the final structure.

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