b'necessarytohaveindividuallimitedliabilitycompaniesrepresentthe members of the asset management entity, but it still seems to be preferred by most clients. Because the management entity could be sued by investors in a syndicate or fund, we always suggest that the asset management entity should be a separate limited liability company. If an individual is named as the manager of a fund or syndicate, the company can be harmed if something happens to that person, as it will no longer have a manager until the members can elect a replacement. If the manager is a multi-member limited liability company, the asset management entity will continue to exist as long as it has members, and the investors will be unaffected if something happens to one of the members of the asset management entity. Further, if there is dissent among the asset management team (which is the most likely place for problems to occur), it can be dealt with separately, without having to involve investors, which always makes them nervous. IntheorganizationchartsweshowedyouinChapter18,theasset manager is a not a member of the limited liability company, so it doesnt haveanyownershipinterestsorvotingrightsinthesyndicateorfund. Instead, the asset manager earns certain fees for its active role in managing the syndicate or fund.Why Use Two Classes of Members? Below are several reasons we suggest you use a two-class membership structure with a separate asset management entity for your syndicates and funds: 189'