anyone know the rules for forming an investment club, ie naic, and the no of members a club can have..?

forming a LLC to hold a private placement company investment. what legal matters concerning no of club members, out of state members? state and federal rules..

2 Answers

  • Anonymous
    1 decade ago
    Favorite Answer

    The Armchair Millionaire Checklist for Starting an Investment Club

    Find the right people. Talk to friends, co-workers, neighbors and family members to see who is interested. Chances are that you'll have some drop-outs, so shoot for an initial group of 20. Remember that these are people that you'll be spending time with on a regular basis, so everyone should enjoy one another's company. It is also helpful to enlist people with a variety of interests and occupations.

    Set up an initial meeting. You'll do two important things at this first meeting. First, for the club to be successful and harmonious, members need to be aligned on their investing approach. If some want to pursue a short-term, active trading strategy, they're bound to clash with others with a long-term, buy and hold philosophy. Second, you need to make sure that everyone is committed to doing the work that will make the club a success. If you can take care of these two items, you'll be ready to move ahead.

    Take care of the nuts and bolts. Every club should adopt partnership and operating agreements, elect officers and set up a brokerage account. You will also need to agree on the specific responsibilities of each member.

    Get to work. You'll need to choose potential stocks to purchase, research each one and then make a decision on buying. The NAIC has numerous excellent resources to help you do this in an organized, efficient way, including a comprehensive stock selection guide. It can be found on the Web at

    Begin investing as soon as practical. Many clubs sit around for a year or longer before buying their first stock. Buying a few shares will give your club something tangible to focus on, and as you follow your initial purchases, you'll learn quite a bit, even if some of your early purchases turn out to be mistakes.

    THE BOTTOM LINE: Investment clubs are a terrific way to learn a disciplined, methodical approach to investing, and have fun at the same time. And with a minimum monthly contribution of just $20 or so, almost anyone can enjoy the benefits of club membership

  • 4 years ago

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