Friend money pool.. how to setup

[traderjon]

Hey winners-

My friends and I are planning to pool our money together trading a system that I develop. How can we do this legally in the United States? and for proper taxation?

please note that: Since I'll be doing all the work, they agree to pay me a percentage of their profits.

I'm not a CTA or anything is there any way we can do this legally?

 

[Mathemagician]

Call a lawyer. Don't seek legal advice from a message board. Period.

jj

 

[grantx]

Jon,

One idea, the legal grounds of which are unknown to me, is to get your friends to form a company (excluding yourself)from which you take a loan and trade this. It is important that is a bona fide loan rather than them simply handing over the cash to you to invest on their behalf.

Trading returns would need to have no bearing on what you agree as terms for repayment of the loan. One suggestion may be to pay interest commensurate with your expected returns from trading, eg 2.5% per month.
But check it out first.

Grant.