How To: Successfully Start A Private Investment Company

A private investment company can be an excellent choice for the novice investor. One of the reasons is that there are fewer regulations on private investment companies than on some other types of companies.

What is a Private Investment Company?

A company that has fewer than 100 employees or is able to meet the standard of its members having most of their funds invested elsewhere is exempt from all major regulations from the federal government.  These companies are also known as hedge funds. Because of some problems in the past, there may be legislation in the future that changes some of the exemptions for a private investment fund current regulations are favorable to these companies.

Starting the Company

Under normal circumstances, an investment firm would be subject to special regulations that would need to be followed regarding the registration and regulation of the company.  However, since a private investment company is largely exempt from these regulations, you can start a private investment company just like you would any other company.  Different states have laws that are similar to the federal laws regarding the creation of investment companies, so you will need to exam the situation as it exists within your own state, before creating the company.  Federally however, the process requires no additional registration or paperwork than any other company.

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