If I have a large number of investors who want to pool their money to buy a business, what kind of legal entity could you put together to allow me to

   From the question you have posted, there would most likely be several initial questions I would ask during an initial consultation.  First, the number of individuals involved will help us determine the relevancy of the Tennessee Securities Act of 1980, which puts restrictions on the number of individuals and the amount of money which can be raised without complying with the Act's registration requirements (for talking purposes these are usually 12 individuals and a $250,000).  Above these applicable amounts of raised capital and number of investors, most new ventures will seek federal registration (SEC registration/filing pursuant to the '33 Act) which brings up the issues of "accredited investors" and offering circulars, etc.  Dealing with federal securities issues can be very expensive. However, outside of the above issues, the question I normally have to first ask is:  "Who will be running the entity?"  "Will everyone benefit equally if the business is a home run?".  There is usually some investors who are simply expecting a fixed or minimum rate of return, while others wish to benefit off of "sweat equity".  The answer to these questions will help determine a plan of action for setting up an entity because under Tennessee law, you can separate the governance rights from the financial rights.  Several examples involve LLC's and Limited Partnerships as well as a corporation with separate classes of stock. This answer is for general informational purposes only and is not intended to constitute legal advice or a recommended course of action in any given situation. This answer is not intended to be, and should not be, relied upon by the recipient in making decisions of a legal nature with respect to the issues discussed herein. The recipient is encouraged to consult independent counsel before making any decisions or taking any action concerning the matters in this answer. This answer does not create an attorney-client relationship between the author (John R. LaBar)/Henry, McCord, Bean, Miller, Gabriel & LaBar, P.L.L.C. and the recipient.