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How to invest with other people using a partnership or llc?

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whatthequestion

New member
What is the name of your state? California

I am getting together with some friends to pool money to make some investments. The investments will be deal by deal basis. We have 3 main people. We might bring in other investors on certain investments.

We believe we will likely invest in most deals together in equal shares, however, there may be deals where one of us doesn't investment, only 2 of the partners invest, or we bring on an outsider not part of the partnership to invest, or we invest in unequal shares. What is the best to way to capture this?

We are currently investing as a partnership with partnership agreement, equal ownership in the partnership. we are thinking setting up an LLC.

Any thought would be appreciated.
 


quincy

Senior Member
What is the name of your state? California

I am getting together with some friends to pool money to make some investments. The investments will be deal by deal basis. We have 3 main people. We might bring in other investors on certain investments.

We believe we will likely invest in most deals together in equal shares, however, there may be deals where one of us doesn't investment, only 2 of the partners invest, or we bring on an outsider not part of the partnership to invest, or we invest in unequal shares. What is the best to way to capture this?

We are currently investing as a partnership with partnership agreement, equal ownership in the partnership. we are thinking setting up an LLC.

Any thought would be appreciated.
I suggest you discuss your plans with a business law attorney in your area. You will want one to help you draft agreements anyway.
 

LdiJ

Senior Member
I suggest you discuss your plans with a business law attorney in your area. You will want one to help you draft agreements anyway.
I agree. However, I also am uncertain how someone could structure something like that. Hopefully a local attorney might have some ideas but the varying levels of investment and people involved and potentially unequal shares of some investments would make it really difficult to structure a partnership.
 

quincy

Senior Member
I agree. However, I also am uncertain how someone could structure something like that. Hopefully a local attorney might have some ideas but the varying levels of investment and people involved and potentially unequal shares of some investments would make it really difficult to structure a partnership.
I personally am not seeing the need for an LLC. Rather, I just see the need for solid agreements drawn up by a legal professional for each of the parties involved in the separate investments.
 

adjusterjack

Senior Member
I, also, don't see a need for LLC. This could simply be a limited partnership where the two original partners make the investment decisions and the minority partners just buy a percentage interest in the partnership.

In addition to an attorney I suggest a tax pro. The attorney should be one that knowledgeable about the securities industry because, at some point, this operation may need a securities license.
 

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