Legal Question in Business Law in Delaware

hi, my name is Mikail, I'm not citizen of USA, I apologise for my english.

I would like to establish a hedge fund LLC in Delaware and raise money online, for investing in my own start ups, so I have a few questions about that:

1. Do my investors have to enter the Memorandum of Association of the hedge fund LLC when they decide to invest in my hedge fund? or just sending money to my business bank account and filling up an online form be enough?

2. Can I use the hedge fund's money for buying shares of my own other company? ( example: I raise 100k for the hegde fund and then I use the money to buy shares of my other company LLC in Dubai, but I will be the one deciding at what price to sell the shares, ) and I'm I obliged at all to disclose my activities to my investors?

I'm not trying to act in bad faith, the reason I would like to use the scheme is to raise money for my projects in which I really believe and have more freedom to manage the money if I see some other good opportunities to invest in.

Thank you


Asked on 10/12/14, 2:45 pm

1 Answer from Attorneys
Roman Fichman Esq. Law Practice of Roman Fichman Esq.

Generally speaking,

I believe you may be confusing certain concepts. Generally speaking, a hedge fund may not be the most appropriate type of investment company that could facilitate the purchase of equity of other companies.

To further answer your question, an investment company would be able to own equity of other companies including international ones and you could manage the business of the investment company. However, you must establish the proper corporate documents to authorize the purchase the shares of startup companies and to create the management structure that would be most effective for your goals.

You msu also be aware of limitations on who you can solicit to be an investor.

Being that you are not familiar with US law I highly recommend that you retain a business attorney. Please contact me off line for help in this matter. We could set up a consultation via skype.

Roman R. Fichman, Esq.

www.TheLegalists.com │ @TheLegalist

email: Info (@) TheLegalists (dot) com

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Answered on 10/12/14, 8:47 pm


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