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.DAW
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