The Law and Your Business

Securing Capital

Legally, what’s the difference between active investors and passive investors?

In general, you have more flexibility in securing investments from active investors, because state and federal securities laws aren't involved.

Active investors are your general partners or general members (along with you) of a limited liability company.

Passive investors who aren't involved in the day-to-day operations are your limited partners, or limited members of your limited liability company, or shareholders of your corporation.

>>What are some ways of securing capital?
>>How about using my home equity to get funds?
>>What are the legal considerations in getting loans from family and friends?
>>What is a promissory note?
>>What are some legal considerations in loans from financial institutions?
>>What about my spouse’s assets?
>>Are government loans available?
>>What about help for women and minorities?
>>What are the legal considerations in getting contributions from others?
>>Legally, what’s the difference between active investors and passive investors?
>>What if I want to have “passive" co-owners?


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State/Local Laws That Affect New Businesses | Home-based Businesses

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