Lots of precautions.
Clients and investors are very different categories. Investors give you property or money which you are going to use to operate a business, and the investors are going to share in the profits. The interests in your business are securities. That's the definition of a security. All securities must be registered with the SEC, a lengthy and expensive process, unless the securities are exempt from registration. Many state have their own registration and exemption rules to protect investors who live in that state.
Many of these exemptions require that no commissions be paid. So you really need to find an exemption which allows commissions and make sure you set up the investment to qualify for that exemption.
If clients give you their money to invest for them in other businesses, you are an investment advisor or investment bank, which are heavily regulated industries. You and certain of your employees may be required to obtain the appropriate securities license, which may require hours of classes and passing a rigorous test.
If you would like to discuss your proposed business and the legal way to set it up, please call me at 510-286-2200 or email me at ds@sackrosendin.com
Dana Sack
Answered on Feb 03rd, 2014 at 1:39 PM