After contemplating on various formal fund structures, which are totally overkill and unaffordable for my purpose, I have come full circle and wonder what is wrong with the following entity if only close friends and family invest:
-One single entity Inc (ABC Capital Inc) in Seychelles or Nevis that is both the fund and manager. No other activity besides trading.
-ABC has voting and non-voting common stocks. I will have all voting common and investors have non-voting common, otherwise all identical. Alternatively, for documentation sake, all stocks can be voting common but all investors have a side shareholder agreement with me such that they irrevocably give me the voting rights.
-the only management and director is me. I have an employment agreement with ABC such that I get compensation based on performance table (if fund increases x% i get y% etc).
-Investment profits will be tax-free since based in a tax haven. ABC should be able to open a bank account and brokerage account. I can get compensation if a performance target is met (no mgmt fee).
I see the structure is rather informal and unsophisticated, but still better than pooling friends money into my personal trading account. The Interactive friend account setup doesn't work for me as some investors cannot open an IB account.
-One single entity Inc (ABC Capital Inc) in Seychelles or Nevis that is both the fund and manager. No other activity besides trading.
-ABC has voting and non-voting common stocks. I will have all voting common and investors have non-voting common, otherwise all identical. Alternatively, for documentation sake, all stocks can be voting common but all investors have a side shareholder agreement with me such that they irrevocably give me the voting rights.
-the only management and director is me. I have an employment agreement with ABC such that I get compensation based on performance table (if fund increases x% i get y% etc).
-Investment profits will be tax-free since based in a tax haven. ABC should be able to open a bank account and brokerage account. I can get compensation if a performance target is met (no mgmt fee).
I see the structure is rather informal and unsophisticated, but still better than pooling friends money into my personal trading account. The Interactive friend account setup doesn't work for me as some investors cannot open an IB account.
