how to set-up a tiny fund

This is a discussion on how to set-up a tiny fund within the Trading Systems forums, part of the Methods category; zaq1, that sounds good. This is very helpful, as I have no knowledge of accountancy, law, legal... My skills are ...

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Old Mar 12, 2012, 12:27pm   #25
Joined Mar 2012
Re: how to set-up a tiny fund

gayaku started this thread zaq1, that sounds good. This is very helpful, as I have no knowledge of accountancy, law, legal... My skills are more into trading and IT. I have the feeling this last sentence will generate yet another cynical comment on this forum

Why do I need an offshore investment vehicle ? Does it mean setting up two firms, a UK one and on offshore one ? Offshore always sounds "dodgy", but it seems the thing to do in the UK. I heard not a single UK hedge fund is registered in the UK, they're all offshore.

How can I pay my investors, my partners and myself with this set-up ? Is it dividends, salary...?
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Old Mar 12, 2012, 8:16pm   #26
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Re: how to set-up a tiny fund

There are many great people here, I guess they are mature adult personas. Then there are also some bitter ones, too. If you wish to drive a "Chelsea tractor" and live in Campden Hill Sq asap, try to ignore negative remarks and get ahead with your idea. That means planning and ACTING on your plans.

The UK limited company first, because it is easier to incorporate and you need to be running, otherwise it is still just an idea (ideas are dime a dozen, as we all know...). The offshore entity later, it will be more difficult as this is actually setting up a company in another country, with different laws and rules. Why incorporate abroad? Lower or no taxes, benign legislation, investor identity/capital protection.

As for payments, you are right - pay yourself by dividends, directors' remuneration, through petrol/other travel allowances...
But, when putting your own capital into the company, only a minimum amount needs to be assigned in company shares - any substantial amounts you put in should be invested into the company against the company's debentures so that if the company goes bust you have preferential right to any monies before other creditors and shareholders.

Preferable follow other forums as well, mainly UK accounting/company secretary/company law/enterpreneur/venture capital forums, there are some good around. And, go for your plan. ACT now.

Last edited by zaq1; Mar 12, 2012 at 11:32pm. Reason: Additional info
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Old Mar 13, 2012, 12:00am   #27
 
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Re: how to set-up a tiny fund

Given that you & i suspect your friends are all UK-based, you should be able to get spread-betting accounts set up for all your clients and get them to sign a 'power of attorney' thereby trading in a similar fashion to a small fund.
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Old Mar 13, 2012, 2:49am   #28
 
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Re: how to set-up a tiny fund

Quote:
Originally Posted by zaq1 View Post
There are many great people here, I guess they are mature adult personas. Then there are also some bitter ones, too. If you wish to drive a "Chelsea tractor" and live in Campden Hill Sq asap, try to ignore negative remarks and get ahead with your idea. That means planning and ACTING on your plans.
You do realise he hasn't even taken his A levels yet, let alone been to university? Isn't willing to work on acquiring his own funds and trading it. Seems to be too interested with just talking about elaborate plans and asking people what he should study/where amongst elaborate trading stuff when there's much better things to do at his age. The amount he's spent talking about all these things he could have stacked shelves in sainsburys and made at least £5k. I really don't get why he's doing this under another account as if it suddenly gains some legitimacy because it's not affiliated. oh...he's multi-accounting. Nice and honest, those skills serve well in the scamming business (where these things inevitably end up)

I already told him to do power of attorney and spread bet it weeks ago and here we are.

Last edited by Masquerade; Mar 13, 2012 at 2:54am.
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Old Mar 13, 2012, 9:47am   #29
Joined Mar 2012
Re: how to set-up a tiny fund

gayaku started this thread I've asked all these questions because I believe I will be very soon in the position to raise money, and I'd like to start planning the next steps, which should be to find a good solution to manage other people money, and of course find investors willing to commit.
For the moment I'm focused on the core of my business : trading strategies, Java code, and risk management.

I don't need to justify myself to the bitter people in this site who have nothing better to do than criticize or pollute a legitimate question (how to manage other people money when the amount is below 100K). Those who can't do teach
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Old Mar 13, 2012, 10:04am   #30
 
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Re: how to set-up a tiny fund

Legitimate question: why are you using 2 accounts? Perhaps I should ask the seniors if it's allowed.
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Old Mar 13, 2012, 10:18am   #31
Joined Mar 2012
Re: how to set-up a tiny fund

gayaku started this thread I don't use two accounts, just one, under my name.

I don't think it's safe/doable to have a friend transfer me let's say 50k on my account, and one year later, let's say I made 20% return, I would return him 60k - fees. I don't think two individuals are even allowed to do perform big bank transfers without being noticed, but of course it would be the easiest.

As you may have guessed, I'm trading on the sporting exchanges, which are tax free for individuals.
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Old Mar 13, 2012, 10:24am   #32
 
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Re: how to set-up a tiny fund

This is your first and only account on this site? It's just the other week I spoke to someone about exactly the same thing with the same concerns using the same numbers you are and the writing style's identical to that of another poster. I guess a simple check by a mod can't hurt.
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