Hi Darrell (and others),
I’m looking for opinions and guidance on the business side of trading. I’ve recently formed an LLC with a friend of mine and we’ve specified that equity will be a 50/50 split. We used Legalzoom to form the LLC and listed ourselves as an ‘Investment Club’ for company type. AMP has accepted our application and we’ve been live trading just fine but I received a big warning flag earlier this week when I spoke to a rep at Traders Accounting - Services for Day Traders - Taxes, Accounting, Business Strategy . She strongly recommended that we modify some of our formation documents to classify ourselves as an entity used 100% for trading, and that we’d need some kind of specialized Operating Agreement to make sure we’re set up properly for accounting. We talked about mark to market and some IRS forms I now forget about. We intended to have our existing LLC serve in multiple roles for us - coaching, software and trading so I’m not really sure how to proceed.
So I have some questions -
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In your experience - is she right? Should we form another entity or convert?
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DM (and others) - do you trade as an individual or other entity and run APEX as its own business?
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What systems and software do you / have you used to manage your books and accounting?
Neither my partner nor I are doing this full-time. It appears that the rules are different when you’re a “professional” vs. occasional investor/trader. Everything I’ve read says that forming the company was a good idea. I’d appreciate some guidance on this matter. Thank you!
-m