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After years of growing the business into a profitable organization, business owners often face the problem of retaining talented employees to take their business to the next level. In order to resolve this issue, an attractive option to business owners is to incentivize their employees with equity in the company. By giving the employee an ownership interest, the employee feels tied to the success of the business and will, in theory, work harder and stay at the company.

However, granting ownership in the company via capital interest creates an issue that the owner may not have intended.

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