Investing for other people...


S

Shhhh

Hello all,

I am an individual who interested in investing for other people (family,
friends, etc.) Before I accept any money from anyone what should my first
step be? set up a sole proprietorship? an LLC? an S corp? do I need to
contact a lawyer first?

any suggestions and opinions are greatly appreciated.


Thanks,
Shhhh
 
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J

John A. Weeks III

"Shhhh" <[email protected]> said:
I am an individual who interested in investing for other people (family,
friends, etc.) Before I accept any money from anyone what should my first
step be? set up a sole proprietorship? an LLC? an S corp? do I need to
contact a lawyer first?

any suggestions and opinions are greatly appreciated.
How about getting some licenses, such as becoming a registered
securities broker. Do a search on "Series 7" to get started.
If you start a financial company without the proper licenses,
you will have a chance to visit a lawyer much sooner than you
may have planned.

-john-
 
S

Sgt.Sausage

Shhhh said:
Hello all,

I am an individual who interested in investing for other people (family,
friends, etc.) Before I accept any money from anyone what should my first
step be? set up a sole proprietorship? an LLC? an S corp? do I need to
contact a lawyer first?

any suggestions and opinions are greatly appreciated.


Thanks,
Shhhh

Bad idea.

Customers, Clients -- sure. No problem.

Family, friends, etc. -- forget about it. You don't
want to go there.
 
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T

TB

Shhhh said:
I am an individual who interested in investing for other people (family,
friends, etc.) Before I accept any money from anyone what should my first
step be? set up a sole proprietorship? an LLC? an S corp? do I need to
contact a lawyer first?
Assuming you don't want to do this for free...you need to register as an
investment adviser in your home state and, generally, any state where
you would have more than 5 clients. This will require (among other
things) passing a test called the Series 65. If you would be managing
more than $25 million, you'd register with the SEC. Info: www.nasaa.org
- follow links to section on advisors. The www.sec.gov site has more info.

You can hire a lawyer for help, but there are also compliance consulting
companies that will do your filing and help you with the compliance
tasks required for an advisory business. Check the back pages of any of
the trade rags (Investment News, Financial Planning, Investment Advisor)
for classified ads.

Form of the business (sole-pro, LLC, etc) is a separate decision and yes
you should talk to a lawyer about that, preferably one familiar with the
liability and regulatory issues of an advisory practice.

JohnW mentioned a Series 7 which is a stockbroker's license - for those
who earn commissions on securities transactions. That's another way to
do it but not typical for a true money manager. Stockbrokers don't
really manage money, they "provide incidental services in connection
with the sale of securities." Or something like that.

-Tad
 
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