Closed-end investment company. You issue shares in a one-time public offering. When investors want to sell, they can sell the shares on a secondary market (e. g. , the stock exchange). [2] X Research source Open-end investment company. Unlike a closed-end investment company, you’ll continuously issue new shares in your company. Clients will buy shares from you and then sell them back to you.

Corporations are owned by shareholders and run by officers appointed by a board of directors. You form a corporation by filing articles of incorporation with the state. A corporation shields its owners from personal responsibility for business obligations, such as debts or lawsuits. Partnerships are owned by the partners, who agree to jointly run a business. Partnerships don’t have to file paperwork with the state. However, partners are personally responsible for the partnership’s obligations. In some jurisdictions, you can create a limited partnership. The general partner is personally liable for the company’s obligations, but its limited partners are not. Limited liability companies are corporation-partnership hybrids. They also shield the owners (called members) from personal responsibility for business obligations. You will need your jurisdiction’s permission to form an LLC.

If you don’t have any referrals, contact your local bar association. Ask for a referral to someone experienced with investment companies.

There should be a business entities website you can search. In the U. S. , look at your state’s Secretary of State’s website. You should also confirm no one has trademarked the name. In the U. S. , you can search the federal trademark registry.

There are also generic plans online that you can read to get the ball rolling.

Company summary. Describe the services you will offer and your business type. Identify the amount of capital you will have at the start and your total start-up expenses. [4] X Research source Market analysis. Identify the other investment companies you will be competing with and analyze what they do well. Discuss how you will set yourself apart from the competition. Marketing plan. Identify your target consumer based on age, location, gender, education, income, etc. Discuss what promotional efforts you will undertake to reach your target market. Operations and management. Identify the members of management and discuss their experience and education. Financial information. Create projected cash flows, balance sheet, and business ratios. [5] X Research source You should also forecast your sales.

You’ll also need to pay a filing fee, which will vary depending on your jurisdiction. You might be able to register online, which can speed up the approval process.

If you form a corporation, you’ll need to draft bylaws. In your bylaws, you should discuss how people can be appointed as officers or board members. Also explain how shareholder or board of director meetings can be called. [6] X Research source If you form a partnership, you’ll need a partnership agreement. Your agreement should explain the ownership percentage and how profits and losses are allocated. You also want to clarify who can bind the partnership and what will happen if a partner dies. If you form a LLC, you’ll need to draft an operating agreement. This document will be similar to a partnership agreement. Identify the owners and their percentage of ownership. Also divide profits and losses.

In the U. S. , for example, licensed financial advisors have a Series 65 license. To obtain it, you’ll need to pass a three-hour exam on basic securities laws and ethics. [7] X Trustworthy Source Financial Industry Regulatory Agency Non-governmental organization responsible for regulating brokerage firms and exchange markets Go to source Once you pass, you’ll be a licensed investment advisor in your state.

Learn about federal government registration by reading the Investment Company Registration and Regulation Package, which is available online. [8] X Trustworthy Source U. S. Securities and Exchange Commission Independent U. S. government agency responsible for regulating the securities industry, which includes stocks and options exchanges Go to source

You’ll also need to register for state and/or local taxes. Contact your state’s Department of Revenue and your municipal government office.

Your target market will also drive the media you choose. For example, if you want to reach established professionals, you might advertise in the business section of the newspaper. However, if you want to reach millennials, you should advertise online and use social media. Video is more effective at reaching millennials than text. [10] X Research source

Create a logo and tagline that convey your brand. For example, Charles Schwab’s tagline “Talk to Chuck” personalized a giant company and made it friendly to investors. [11] X Research source Brand consistently across all media. Your website, printed materials, and business cards should share the same look, color scheme, and feel.

Once you get underway, you can also include information about the performance of your funds. Potential clients might also be drawn to articles that explain investment concepts in a way that is easy for a lay person to understand. This is a good way to build trust.

Securities laws are meant to protect consumers by requiring transparency. If you violate these rules, your government regulator will sanction you. You also open yourself to lawsuits from unhappy investors. For these reasons, you should work closely with your attorney when drafting your offering documents.