b'1.This structure can help to preserve Class B distributions for the asset management class if the asset manager resigns or is removed by a vote of the Class A members. If provided in the operating agreement, the asset management entity can resign or be removed, but its Class B membership interests can remain intact. If the acting manager is no longer providing services to the syndicate or fund, and also owns the Class B interests, the investors may argue that the asset manager should be stripped of all of its ownership and management rightsand if the issue comes before an arbitrator, jury or judge, they might agree. 2.This class structure can help you segregate earnings from asset management fees from profit distributions for tax purposes. Since your Class B interests are earned on acquisition for your past efforts in getting the deal to the closing table or a creating your fund, will pay for your Class B interests (~$1,000 total), you will establish a cost basis in your Class B interests, allowing earnings on your Class B ownership interests at sale to be taxable at capital gains rates. Whereas your asset managers fees will always be taxed at ordinary income rates as they are earned for your active role in managing the asset, meaning you will pay self-employment taxes on those earnings. 3.If provided in the operating agreement for the syndicate, the asset manager may be able to allocate Class B interests as it sees fit amongst persons who provide services to the company, regardless of whether they are members of the asset management entity. The documents we draft contain clauses that allow the asset manager to do this without a vote of Class A members and without having to admit such persons as 190'