I have a small business and am looking to borrow funds for the business. The funds will mostly be invested in real estate or lent out to investors. An associate said that if the LLC took a loan from an individual, promised to pay a predertimened interest payment every month for a fixed period of time (1% a month for 3 years) and then used that money to invest in company assetts and or loan it out to individuals that this was a securities violation and a serious legal offense. Can anyone offer any insight? We are looking at borrowing from one person, 200K on terms discussed above.
Eager to be legal-
Shlim
2007-02-19 10:26:45 · 2 answers · asked by timothycwatson 1 in Business & Finance ➔ Taxes ➔ United States
I would highly recommend a consultation with an attorney on that. If you want to be legal, that's always the best way to go.
2007-02-19 11:06:26 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
im not a lawyer, but from what i know if you take that money and invest it in company assets your alright and in line with the law. However once you use that money and offer a loan to another person it becomes a security which in that case must follow the securities exchange laws.
2007-02-19 20:23:31 · answer #2 · answered by Ski_Bum 3 · 0⤊ 0⤋