Posted by Investors friend on July 23, 2001 at 11:46:06:
Do you still have to have a contract to have a partner (he puts up cash, I do the rest)or can it be verbal? I know it is safer, but is it legal without a contract?
Is this legal? - Posted by JamesA
Posted by JamesA on June 23, 2001 at 10:40:37:
I have run fresh out of cash and still have deals to do but need money. I have several people who have the cash and are willing to invest, but from what I understand I cannot borrow their money and use it to invest (and tell them a good return is probobly coming), that would be against SEC rules or the like. If I form an partnership (via a simple contract) with each of the investors is this the best way to go? The terms would be something like they put up the cash, and I find the deals, profits split even 50/50.
Thanks for your help.
JamesA - maryland
Re: Is this legal? - Posted by Ed Garcia
Posted by Ed Garcia on June 23, 2001 at 12:49:19:
James,
I’ve got good news. You will not be doing an illegal act as long as you don’t put multiple investors in a deal. You are allowed to take on partners. I’m sorry I can’t remember how many investors you’re allowed, in a deal before you violate the SEC (Security Exchange Commission). I believe it’s 16; you might want to check on that. You can do deals with partners/investors at whatever terms and conditions that are acceptable to all parties concerned. It doesn’t have to be a 50/50 split as you have suggested.
Ed Garcia