Legal Question in Securities Law in Nevada

LLC member units

I am starting a new LLC and plan to raise start up capital by bringing in 3 other people who will own about 30% of the company member units in return for bringing in capital contributions. I will retain ownership of the other 70%.

Does this sort of money raising have to meet securities standards for a public offering. My understanding is that it does not.

This will be a Nevada LLC with members in 3 other states.

An Operating Agreement will be in place to address ownership etc.


Asked on 3/08/09, 3:46 am

1 Answer from Attorneys
Warren Markowitz Warren R. Markowitz, Esq

Re: LLC member units

The securities offering issue depends on how you are going to raise the money. Are the 3 persons going to be investors or are they being compensated for raising the capital. Are these the only investors, those that have decided to join you before you formed the company and then would contribute capital in return for a membership interest?

The issue of public or private depends on the how, who and where of capital funding.

There are many issues that relate to the securities laws and regs and you should speak with someone that is familiar with the process. You can run into issues with both state and federal regulators if you do this wrong and set yourself up for fines and other problems you may not be able to handle.

I do these things regularly, if you wish you can contact my office for a consult.

Good Luck,

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Answered on 3/08/09, 4:33 pm


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