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Im looking to form an trucking company, my partner and I want

Customer Question

I'm looking to form an trucking company, my partner and I want to have control over the company; however, we need about $150k to get started which means we need to get other people involved. We're in Pennsylvania.

Having done a little research, it looks like we want to form an LP. My partner and I could then own an LLC which would be the general partner. The other people we get involved would be limited partners.

Here are my questions:

- Does this make sense?
- Would the LLC (my partner and I) have 100% of the voting rights?
- Since the limited partners would not be managing the company, would I need to deal with SEC regulations and such to accept their "investments"? Or could I just have an attorney draft the LP docs, take the money, and be done with it?

- What is the easiest way to get other people's money involved with the fewest regulations and headaches?

Thanks!
Submitted: 3 years ago.
Category: Business Law
Expert:  Richard replied 3 years ago.

Good afternoon. 1) I would actually recommend that you form an LLC rather than a LP because it saves you the trouble of having the second entity. You and your partner can be the managers of the LLC. 2) Whether or not you do the LLC or the LP, you are issuing "securities" which are subject to the SEC regulations...but if you sell only to "accredited investors" you will be exempt.

 

 

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Please be aware that the information provided here is not legal advice. Rather it is simply general information. All states have different intricacies in their laws and any information given is simply general information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

 

Customer: replied 3 years ago.
I don't think any of the people I want to get involved would be accredited investors. That means net worth > $1,000,000 and/or $100k+ income?

If the people provided money AND were involved in the business, than there would be no issues, correct? What level of involvement would be necessary?
Expert:  Richard replied 3 years ago.
It's going to depend upon their experience and their involvement and if these are people you know or people you don't know. You can have up to a certain number of non-accredited investors without an issue...generally 35.

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