Message Font: Serif | Sans-Serif
No. of Recommendations: 0
The brain has been working overtime here, producing lots of questions.
1. Is the existence of special treatment for investment clubs a function of special exemptions passed legislatively or by case law?
2. General Partnership or Limited Partnership? If these clubs are Limited Partnerships, how do you get around the need for a broker dealer registration? Isn't the first person to decide to start a club soliciting a sale of securities when he looks for other partners? If everyone participates equally, I guess its a General Partnership?
3.What if the club wants to invest in items other than equities? Lend money and take back mortgages? Own investment real estate? sell lemonade on the street corner?
4.If ( as I suspect ) most clubs are General Partnerships, can you convert to a Limited Partnership if several members cease to be active or if a corporate entity wants to join or if someone wants to invest IRA $?
5. It probably should never be an issue, but is an investment club created as a partnership, limited to 35 members?
6. Are New York clubs subject to the horrendous blue sky issues?

Maybe all these questions are the sign of an overactive imagination, but somewhere here I smell a loophole just waiting to be crawled through.
Print the post  


Starting a Club
Learn how to start and run your own club, the Motley Fool way!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.