In Texas the new limited liability partnership laws and the IRS check box regulations make it possible to convert a Texas corporation to a limited liability corporation and elect to have the entity to continue to be taxed as a corporation with out having a taxable event. This is being considered by several Texas corporations as a way to avoid the Texas Franchise Tax. The question is will the entity be able to continue to have Qualified Employer Securities in the Profit Sharing Plans? The reorganized LLPs will have partnership units which will function exactly as stock. There will be no individual equity accounts but rather a stock account. Any thoughts? Is the ERISA definition of Qualified Employer Security broad enough to include this strange ownership units?

I have a similar question in that the trustee of a profit-sharing plan would like to purchase class B shares of a limited liability company which has elected to be taxed as a partnership. Because the plan sponsor of the profit-sharing plan and the limited liability company appear to be part of a related group, I have been looking at the definition of qualifying employer securities both under ERISA and the IRC. Unfortunately, neither statute, nor any guidance that I can locate addresses entities such as an LLC or a LLP.
ERISA 408(e) exempts from the prohibited transaction rules the purchase of qualifying employer securites by an eligible individual account plan.
ERISA 407 (d)(5) defines qualifying employer security to be stock, marketable obligation or an interest in a publicly traded partnership.
I do not practice in Texas, but I would guess that an interest in a LLP is not stock. This may be one reason not to jump on the LLP bandwagon.

Read PLR 9236042 and GCM 39880 and weep.