Can you suggest an LLC structure and operating agreement for an LLC in which friends will pool money to trade?

Question

Can you suggest an LLC structure and operating agreement for an LLC in which friends will pool money to trade, in return getting shares of the LLC. One friend ( a trading whiz) will become the permanent managing partner and will control the trading account and receive 20% of returns from everyone as reward. Is this o.k. to do or does it require registration with the state it is in or SEC?

Any suggestions as to an agreement and structure? Thanks

Answer 1

There are no SEC requirements for creating what they call an "investment club".  The benefit of the LLC is that the income travels through to each person's income tax return, bypassing the additional taxes involved with creating a corporation.  If any person has a problem with the income and expenses flowing through their income tax return, then you'll need to form a corporation and put the disagreeing party down as an employee or contractor and not an owner.