Legal Question in Business Law in California

Re: Laws about paying a friend commission to find...

You and your friends are getting into dangerous territory. Depending on the activity, your friend needs to be properly licensed or risk violating any number of statutes. If you are looking to bring in an investor, you need to be concerned with securities laws, which your friend will most likely be unfamiliar with, as an unlicensed person.

I recommend using licensed professionals. There are reasons why licensing is required.

Re: Laws about paying a friend commission to find...

Laws regarding paying and receiving commissions are generally prohibitions upon their receipt, not their payment, by unlicensed persons; for example, in real estate transactions no one may earn or receive a commission for negotiating or otherwise handling a deal unless licensed.

However, in the world of securities and investments, the law is so tough (to protect the public) that most of the many laws will bite both the securities peddler who solicits the investment AND the issuer of the security. All the terms used in securities and investment laws tend to have very broad meanings, so that almost anyone who puts up money is a protected person and almost any transaction is a covered securities issuance, and almost everyone involved in the deal, including advisors, accountants and lawyers acting for the principals may share responsibility for breaches of the law.

The laws cover disclosures, investor qualifications, advertising and solicitation, registration, situations that are exempt or partially exempt from registration, etc.