500+ multi member LLC, Non SEC registration needed, avoid classification as Investment Club
<p>Let's say that I want to open a multi member LLC without needing SEC registration but staying compliant, for that case I'll appreciate you can help me with some questions please.</p>
<ul>
<li>Let's say that the LLC will have 500 or more members.</li>
<li>The membership interests won't be securities because there won't be passive members, so the public offering concept won't apply.</li>
<li>The LLC won't buy or sell <strong>securities</strong> so it won't be classified as an <strong>Investment Company</strong>.</li>
<li>Also, as the LLC will be member managed without passive members there isn't the <strong>Adviser</strong> concept, without that concept the <strong>Fund</strong> and the <strong>Pooled Investment Vehicle</strong> won't apply either.</li>
<li>The LLC activity is not clear yet because the possibilities are being explored, could be focused on Buy and Sell merchandise or land and maybe building in the case of the second and even SaaS activities but the main activity won´t be invest in securities.</li>
</ul>
<p>That said;</p>
<ol>
<li>Will anything in this context trigger a registration requirement with the SEC?</li>
<li>Is SEC registration only required when the activity is related to securities or will the mentioned or other commercial activities trigger the registration requirement?</li>
<li>Contemplating that the LLC could have some cash available to invest in securities without changing the focus of the company or also could create new private companies and own its stocks (so that will involve securities even when trading them is not the goal). There is a threshold for Investment Clubs of up to 40% invested in securities before becoming an Investment company and therefore need to be registered, will this still apply for the described LLC (which is not an Investment Club) in order to do the activities described at the beginning of this question without triggering a registration requirement?</li>
</ol>
<p>If useful, I was checking this articles as reference but will appreciate you can help me with those questions to clarify:</p>
<h2><a href="https://i.stack.imgur.com/8tJHF.png" rel="nofollow noreferrer"><img src="https://i.stack.imgur.com/8tJHF.png" alt="enter image description here" /></a></h2>
<h2><a href="https://i.stack.imgur.com/briGE.png" rel="nofollow noreferrer"><img src="https://i.stack.imgur.com/briGE.png" alt="enter image description here" /></a></h2>
<p><a href="https://i.stack.imgur.com/ve7do.png" rel="nofollow noreferrer"><img src="https://i.stack.imgur.com/ve7do.png" alt="enter image description here" /></a></p>
<p><a href="https://www.sec.gov/answers/clubs.htm" rel="nofollow noreferrer">https://www.sec.gov/answers/clubs.htm</a>
<a href="https://www.sec.gov/reportspubs/investor-publications/investorpubsinvclubhtm.html" rel="nofollow noreferrer">https://www.sec.gov/reportspubs/investor-publications/investorpubsinvclubhtm.html</a>
<a href="https://www.sec.gov/investment/fast-answers/divisionsinvestmentinvcoreg121504htm.html" rel="nofollow noreferrer">https://www.sec.gov/investment/fast-answers/divisionsinvestmentinvcoreg121504htm.html</a>
https://www.sec.gov/education/glossary/fundamentals#:~:text=A%203(c)(7,of%20the%20Investment%20Company%20Act.</p>
<p>Thanks beforehand</p>

<p>The membership interests in the club are securities and have to be registered with the SEC. Almost every aspect of your analysis regarding why it is exempt is deeply flawed.</p>

limited-liability-company securities sec