Has anybody ever set up a relative to trade? If so using what structure?

[random12345]

Can anyone think of any problems with doing the below? I do not think the Ltd company is engaging in any restricted activities for FSA (or FCA even!) purposes since there is no client money involved. Please let me know if you have any experience of this sort of thing. Obviously I don't want any advice around the likelihood of the capital being lost, that goes without saying. Appreciated.

To cut a long story short, my sister has convinced me of the merits of helping her loser long term boyfriend try and make his way on this awful planet. This child, having lost his job and prospects by the way, reckons he can return me 25% a month using discretionary trading, but of course barely has 500 quid to his name.

I was unimpressed by his business plan to say the least, but I am nothing but a pathetic member of the lamentable male species and cannot help but to immediately fold to any tearful requests from my sister.

Therefore I agreed to give him some capital, but not as a loan, because he will lose it and not be able to pay me back and there are issues around my right to recourse etc. In my mind, it is a gift to my sister and nothing more, but one that would operate better for future relations between us all in a company. At least if the company fails, it's not the same as him having lost loaned money.... in my head.

Therefore I have created a Ltd company with me as 26% holder and him with 74% of the ordinary stock. I have introduced said capital already and opened a corporate account with LMAX. This w&nker will trade the money and we will raise dividends on the distributable profits, thus I get an automatic 24% of said profits (of which there won't be any) and he can retain the bulk or it will never grow. My introduction will remain a liability until such time as the company has generated retained profits sufficient enough for it to be a viable going concern without my capital. I will then give my shares to my sister as minority holder.

Thouuuughts?

 

[counter_violent]

Can anyone think of any problems with doing the below? I do not think the Ltd company is engaging in any restricted activities for FSA (or FCA even!) purposes since there is no client money involved. Please let me know if you have any experience of this sort of thing. Obviously I don't want any advice around the likelihood of the capital being lost, that goes without saying. Appreciated.

To cut a long story short, my sister has convinced me of the merits of helping her loser long term boyfriend try and make his way on this awful planet. This child, having lost his job and prospects by the way, reckons he can return me 25% a month using discretionary trading, but of course barely has 500 quid to his name.

I was unimpressed by his business plan to say the least, but I am nothing but a pathetic member of the lamentable male species and cannot help but to immediately fold to any tearful requests from my sister.

Therefore I agreed to give him some capital, but not as a loan, because he will lose it and not be able to pay me back and there are issues around my right to recourse etc. In my mind, it is a gift to my sister and nothing more, but one that would operate better for future relations between us all in a company. At least if the company fails, it's not the same as him having lost loaned money.... in my head.

Therefore I have created a Ltd company with me as 26% holder and him with 74% of the ordinary stock. I have introduced said capital already and opened a corporate account with LMAX. This w&nker will trade the money and we will raise dividends on the distributable profits, thus I get an automatic 24% of said profits (of which there won't be any) and he can retain the bulk or it will never grow. My introduction will remain a liability until such time as the company has generated retained profits sufficient enough for it to be a viable going concern without my capital. I will then give my shares to my sister as minority holder.

Thouuuughts?

How do I become your relative?

 

[pboyles]

Can anyone think of any problems with doing the below? I do not think the Ltd company is engaging in any restricted activities for FSA (or FCA even!) purposes since there is no client money involved. Please let me know if you have any experience of this sort of thing. Obviously I don't want any advice around the likelihood of the capital being lost, that goes without saying. Appreciated.

To cut a long story short, my sister has convinced me of the merits of helping her loser long term boyfriend try and make his way on this awful planet. This child, having lost his job and prospects by the way, reckons he can return me 25% a month using discretionary trading, but of course barely has 500 quid to his name.

I was unimpressed by his business plan to say the least, but I am nothing but a pathetic member of the lamentable male species and cannot help but to immediately fold to any tearful requests from my sister.

Therefore I agreed to give him some capital, but not as a loan, because he will lose it and not be able to pay me back and there are issues around my right to recourse etc. In my mind, it is a gift to my sister and nothing more, but one that would operate better for future relations between us all in a company. At least if the company fails, it's not the same as him having lost loaned money.... in my head.

Therefore I have created a Ltd company with me as 26% holder and him with 74% of the ordinary stock. I have introduced said capital already and opened a corporate account with LMAX. This w&nker will trade the money and we will raise dividends on the distributable profits, thus I get an automatic 24% of said profits (of which there won't be any) and he can retain the bulk or it will never grow. My introduction will remain a liability until such time as the company has generated retained profits sufficient enough for it to be a viable going concern without my capital. I will then give my shares to my sister as minority holder.

Thouuuughts?

Why spend £100 setting up a company when you could just give him the money to lose?

Is he called Joe by the way?

 

[cablemonster]

Can anyone think of any problems with doing the below? I do not think the Ltd company is engaging in any restricted activities for FSA (or FCA even!) purposes since there is no client money involved. Please let me know if you have any experience of this sort of thing. Obviously I don't want any advice around the likelihood of the capital being lost, that goes without saying. Appreciated.

To cut a long story short, my sister has convinced me of the merits of helping her loser long term boyfriend try and make his way on this awful planet. This child, having lost his job and prospects by the way, reckons he can return me 25% a month using discretionary trading, but of course barely has 500 quid to his name.

I was unimpressed by his business plan to say the least, but I am nothing but a pathetic member of the lamentable male species and cannot help but to immediately fold to any tearful requests from my sister.

Therefore I agreed to give him some capital, but not as a loan, because he will lose it and not be able to pay me back and there are issues around my right to recourse etc. In my mind, it is a gift to my sister and nothing more, but one that would operate better for future relations between us all in a company. At least if the company fails, it's not the same as him having lost loaned money.... in my head.

Therefore I have created a Ltd company with me as 26% holder and him with 74% of the ordinary stock. I have introduced said capital already and opened a corporate account with LMAX. This w&nker will trade the money and we will raise dividends on the distributable profits, thus I get an automatic 24% of said profits (of which there won't be any) and he can retain the bulk or it will never grow. My introduction will remain a liability until such time as the company has generated retained profits sufficient enough for it to be a viable going concern without my capital. I will then give my shares to my sister as minority holder.

Thouuuughts?

I can tell you now that the regulation of spot FX is a very grey area with the FSA (now FCA) as the market itself is unregulated. For example front running a large institutional order at a bank is perfectly legal and expected as long as you dont take the michael. In addition you have set up a company and gifted the money, you are simply a shareholder.

I would say that you have nothing to worry about in terms of the FSA/FCA however this is just my opinion and if you are yourself a regulated person under the FCA then you need to be much more careful what you do for obvious reasons.

You sound completely convinced you will lose this money. an emotional investment!

 

[Liquid validity]

reckons he can return me 25% a month using discretionary trading,

Translation, 25% loss a month until bust out

Seriously, wouldn't be a great year, but a 25% annual return with
5:1 leverage would be fine by me.
As an annual average I'd be ecstatic.
No problems I can see, apart from the likely loss.

 

[robster970]

I think what you have done is about the best you could conceivably do. Resign yourself to the loss and any upside is a pleasant surprise. I got burnt quite badly with family and money. Never again. I just don't tell them anything any more. Saves the heartache to be quite frank. Legally I think all is well providing you don't end up signing any personal guarantees to securitise additional loans/overdrafts/etc he may take out without you knowing.

FSA regs are fine. Prop trading is outside of FSA control which is essentially what he is doing.

It is referred to under PERG 2.8.4 Dealing in Investments as Principal - https://fshandbook.info/FS/print/handbook/PERG/2/8

 

[random12345]

I think what you have done is about the best you could conceivably do. Resign yourself to the loss and any upside is a pleasant surprise. I got burnt quite badly with family and money. Never again. I just don't tell them anything any more. Saves the heartache to be quite frank. Legally I think all is well providing you don't end up signing any personal guarantees to securitise additional loans/overdrafts/etc he may take out without you knowing.

FSA regs are fine. Prop trading is outside of FSA control which is essentially what he is doing.

It is referred to under PERG 2.8.4 Dealing in Investments as Principal - https://fshandbook.info/FS/print/handbook/PERG/2/8

Rob - much appreciated, thanks.

Essentially he is going to have so much on margin that the total risk is actually more like half the money so he might have the humility to give in once that happens. I mean if, IF that happens.

 

[random12345]

Why spend £100 setting up a company when you could just give him the money to lose?

Is he called Joe by the way?

I tried to explain it in my post - it sets up a repayment ratio without setting up a monthly interest requirement (so if he makes nothing, I get nothing, I don't just want my dwindling capital returned) and it becomes something of a joint venture... we can look back on its failure with some amusement rather than the angry resentment that comes with unpaid loans.

Does that make sense to anyone else?

 

[random12345]

I can tell you now that the regulation of spot FX is a very grey area with the FSA (now FCA) as the market itself is unregulated. For example front running a large institutional order at a bank is perfectly legal and expected as long as you dont take the michael. In addition you have set up a company and gifted the money, you are simply a shareholder.

I would say that you have nothing to worry about in terms of the FSA/FCA however this is just my opinion and if you are yourself a regulated person under the FCA then you need to be much more careful what you do for obvious reasons.

You sound completely convinced you will lose this money. an emotional investment!

Cheers for that Cable.

This guy has born to lose tattooed on his chest. The money is as good as gone.

 

[Sir Pond Life Dreg]

Cheers for that Cable.

This guy has born to lose tattooed on his chest. The money is as good as gone.

I hope he doesn't read teh trading forums....:whistling

 

[random12345]

I hope he doesn't read teh trading forums....:whistling

He knows what I think of him. It's a happy working relationship.

 

[robster970]

I tried to explain it in my post - it sets up a repayment ratio without setting up a monthly interest requirement (so if he makes nothing, I get nothing, I don't just want my dwindling capital returned) and it becomes something of a joint venture... we can look back on its failure with some amusement rather than the angry resentment that comes with unpaid loans.

Does that make sense to anyone else?

Absolutely. If I had taken a similar approach with my Brother, we would probably not have the difficulties we have we each other today, some 10 years later.

Smart move on your behalf.

 

[jungles]

yes i have some,

forget about the "loser" as you call him, after-all you give the impression he lacks the maturity and aptitude required to make it in this very elite activity

instead, take me as your most sincere and dedicated student

Thouuuughts?

 

[jungles]

marry his sister

How do I become your relative?

 

[counter_violent]

marry his sister

Nothing gets past you does it.

 

[jungles]

i dont usually come down from my lofty position, but decided to today

Nothing gets past you does it.

 

[DionysusToast]

Set up a relative to trade?

I did once sell my Grandmother to a glue factory. Convinced her to sign the paperwork & everything.

Does that count?

 

[random12345]

yes i have some,

forget about the "loser" as you call him, after-all you give the impression he lacks the maturity and aptitude required to make it in this very elite activity

instead, take me as your most sincere and dedicated student

I do have a brother too... perhaps you could make some lifestyle changes and become part of the family.

 

[jungles]

thank you for your kind offer , unfortunately i will have to let this one go

but try CV, he sounds keen :clap:

.........not that there's anything wrong with that

I do have a brother too... perhaps you could make some lifestyle changes and become part of the family.

How do I become your relative?

 

[jungles]

how's the in-law doing? making you proud?