Legal Question in Business Law in California

Either an LLC or a Corporation would be fine. Interest rate restrictions depend upon a few factors, however, more important is your last question regarding investors. Definitely consult with counsel before doing anything in that regard as the way in which you go about soliciting investors and the number you intend to include is important and may ultimately affect your decision as to which type of entity that you choose to select.

1. If you are lending, rather than owning or developing, the land, I'd tend to prefer a corporation because this avoids the gross-receipts tax which could be significant in your proposed business, although a CPA's opinion would be necessary as to whether loan repayments are treated as "receipts" of an LLC for tax purposes. Anyway, corporations are a bit simpler to set up and a bit better known to and understood by the public.

2. Interest-rate restrictions, a/k/a laws against usury, do exist in California, but licensed broker-lenders, commercial banks and a few other kinds of institutional lenders are exempt....note, e.g., the credit-card industry. (The exemption for brokers applies when the loans are secured in whole or in part by liens on real property.) You should look up and study the sections of the Civil Code entitled "Loan of Money" - Division 3, Title 4, Chapter 3 - consisting of sections 1912 through 1916-5. The exemption is in section 1916.1.

3. The law regarding "inviting other investors to join in" is MUCH more complex. Basically, the subject ranges from maybe at one extreme, inviting an old friend and business colleague who knows the business well to become a co-owner to, at the other extreme, issuing shares by advertisment to the general public. It ranges from "exempt from regulation" to "highly regulated." There are many books, ranging from self-help legal paperbacks such as those published by the Nolo Press (and others) through scholarly treatises aimed at keeping professional accountants, lawyers and Wall Street types informed of new developments. I would be very, very cautious about taking investment money from anyone, especially strangers, without specific and thoughtful legal advice. The penalties for violation of the laws and rules are rather stiff.

Ditto to the above. If you are a broker and don't already know the answers to these issues as you should, you'd better get experienced counsel to help keep you out of lawsuits and jail. If serious about doing so, feel free to contact me.