Negotiating partnership - Is this fair?

[Ryan Barnes]

First let me say I would GREATLY appreciate any help or advice I could get from this group...

I am currently negotiating my position in a property management company (MGMT LLC). The arrangement is somewhat complex so please follow along.

- The management company was created for the purpose of managing another LLC (PROP LLC).
- PROP LLC is a holding company for all properties that will be acquired by my group in the near future.
- MGMT LLC will have 1% ownership of PROP LLC while another group of investors (INVEST LLC) will take 99% ownership of PROP, LLC
- MGMT LLC will take 50% of the Cashflow from PROP LLC and another group (INVEST LLC) will take the other 50% of cashflow.

I am negotiating my interest in MGMT LLC.
- The original offer on the table was 16% of ownership of MGMT LLC which equals 16% of revenue share from MGMT LLC... I turned this down.
- The new offer is 0% of ownership and 20% of revenue share. Negotiations stopped here.

I am happy with 20% rev share but am concerned about the impact of 0% ownership...Also, it should be known that MGMT LLC does not have an intention of acquiring ownership in anything moving forward other than the 1% ownership of PROP LLC and the 50% of cashflow from PROP LLC. It should also be stated that I'm in a position where building my balance sheet is important to me. I'm young and don't have much of a financial track record yet...

So...
1. What are the tax implications that I should be considering?
2. What are the balance sheet implications? (e.g. how will a bank view me differently in one scenario or the other)
3. What are the implication in terms of control over my piece of the pie (e.g. can I be forced out for little interest, etc.)
4. What are the other implications that I don't know I don't know?

Quick Advise would be greatly appreciated as negotiations will be finalized tomorrow morning.

Thanks!