Legal Question in Business Law in California

If you can find 2,000 people to place their trust in you, and you are upfront with them about what you're doing, great. Obviously there are any number of ways this could go south, but good luck.

The other attorney is right on point here. First you need to find 2,000 people willing to buy into this. Then, hopefully, everything proceeds smoothly. Consult with an attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

I disagree with the preceding answers. The proposed tickets clearly fall within the definition of securities. You cannot issue, or even offer to issue, securities to 2,000+ investors without complying with California and Federal securities law. There could be an exemption from actual registration available under SEC Regulation D, but even so, you'd have to comply with many rules and limitations, including making detailed written disclosures via an offering circular or prospectus. California regulators might do an analysis of the merits of the offering. In sum, this is deep water, with civil and possibly criminal penalties for failure to comply with the regs, and I would advise against this money-raising model unless you are willing to retain an (expensive) securities attorney to qualify your offering and assist in preparing documents. This would cost at least 10% of the amount you plan to raise, and perhaps more. You would also become involved in ongoing reporting requirements, the necessity of audited statements, and so forth.

Like Mr. Whipple, even if you can find 2,000 people who will trust you enough to do this I think you could be running afoul of the California and/or Federal securities laws. I also question the economics of the deal. Even if it worked, you would have sold 2,000 hours of boat time which you will have to provide without receiving a single penny for your operating costs - fuel, insurance, staff, maintenance, licenses, etc. You don't mention why you sold it in the first place or why the current owner wants to sell it back. In short, for any number of reasons it does not sound like a good idea to me.

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