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Set up investment company

by SrEngRet, Window Shopper

  • Created: August 12, 2009, 9:15 pm
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3 comments

I'm considering setting up an investment company that holds stocks, bonds, ETFs, mutual funds, REITS, closed-end funds, etc.  I likely will set it up as an LLC. 

Spouse and I will be member-managers.  No shares sold to public or family. 

I would make buy and sell decisions from daily or almost daily research. Day trading is not likely to happen.

Does anyone have experience with this?

 

Goals:  Profit, asset protection, retirement plan.

 

As I understand now, I won't reach trader status since I will likely only buy and sell intermittently.  Goal is to receive dividends and capital gains from either short term or long term buying and selling.    I won't be able to use mark-to-market accounting either.  

 

My research indicates that spouse and I can be independent contractors as consultants to the LLC.  From there, we can set up individual 401Ks as long as we are paid a fee by the LLC. 

 

Would the LLC have to follow passive investment holding company rules (whatever those are)?

 

My research has been on the traderstatus.com and greencompany.com websites.

 

I'd like to hear your concerns and advice. 

 

Thanks. 

 

Tags: Discuss Popular Topics, Starting & Registering a Business
‹ I meet with the realtor Tuesday @ 4pm and I have a few concerns Recommendations on Financial Management.... ›

alexvig | Creator | 11/1/2009 - 11:33 pm

Very cool business idea! Just wondering, I don't mean to insult your intelligence, but what kind of experience do you have in this industry? Im asking this as I am very interested in doing something like this with a few of my buddies from my college days.  Im thinking you need to get an account somewhere that can fill your order promptly and for a low price every time. You can lose a lot of money with bad brokers. Do your research and you can definitly succeed!
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jbeidle | Contributor | 8/16/2009 - 12:14 am

I have set up similar. I am not sure why you and wife would be independent contractors. Then again, I am not sure why you would both be member managers. This is not a simple endeavor you are talking about but it can give you the protections you desire. It would be well worth your money to get the proper tax plan.
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phanio | Contributor | 8/15/2009 - 9:19 am

Try SCORE (score.org). Find a counselor with the experience you seek and let them mentor you. Don't be a Madoff
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