• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

LLC is trying to sell its shares to raise funds and offered to pay me finder's fee

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

ihot

Member
What is the name of your state (only U.S. law)? CA and USA SEC law

Happy March everyone!

I am wondering if I can raise funds for a private LLC corporation in California? I don't have license to raise capital nor sell units of ownership, i.e. I'm not a broker nor dealer. SEC rules that there are "exemption" that may apply to soliciting, but I wonder if it applies to independent third parties like myself or any employee (paid for raising funds).
https://www.sec.gov/divisions/marketreg/exemption-broker-dealer-registration-jobs-act-faq.htm

It seems to indicate, that neither third parties nor employee can introduce the LLC to an Angel investor for a finder's fee.
(ps. The LLC is trying to sell its units of ownership to raise funds and offered to pay me finder's fee).

Thanks.
 
Last edited:


FlyingRon

Senior Member
LLCs do not have "shares" in the sense corporations do. You can take money for members ownership interests in your LLC, but marketing them to the public, in general, is HIGHLY restricted. You can't just put up a web site and sell them. Even if you want to sell them privately, you'd best have a lawyer draft the changes to the operating agreement as this is where the ownership percentages and what rights (voting, etc...) each member has is defined.

And you can't act as an agent for selling shares to the public (even for entities that legally are allowed to sell those shares) without being licensed.
 
Last edited:

latigo

Senior Member
What is the name of your state (only U.S. law)? CA and USA SEC law

The LLC is trying to sell its shares to raise funds and offered to pay me finder's fee.
NO, no! Neither this nor any other LLC is trying to sell its shares; nor is anyone offering to pay you a finder's fee or commission for the sale of such. Don't lay that story on us, please. It won't sell. We are not complete simpletons.

Obviously you have never done so, but let me recommend that you do read California's Revised Uniform Limited Liability Act (Cal. Corp Code Title 2.6) or the enabling acts of the other 49 states and tell us where you find any mention of shares, stocks or other forms of securities as representing ownership interests in an LLC. There is no similarity whatsoever in the structure of an LLC with that of a corporation.

In the future you might wish to become better educated on a subject before making foolish allusions to it.
 

ihot

Member
NO, no! Neither this nor any other LLC is trying to sell its shares; nor is anyone offering to pay you a finder's fee or commission for the sale of such. t.
Thanks for giving link to document. I'll read it.
I guess it is not called shares. I bought some ownership in this LLC - and got a certificate that states I own 20 units and also get a K1 at end of year.
My boss says that I am too dramatic. I am nothing compared to you. I think you are over stressed. In case no one told you this - you are over being overly dramatic in your reply in a public forum.
:D
 
Last edited:

ihot

Member
And you can't act as an agent for selling shares to the public (even for entities that legally are allowed to sell those shares) without being licensed.
Thanks Ron for taking time out of your busy day to educate us.
Have a great week!!
;)
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top