Setting up a partnership for trading

Discussion in 'Professional Trading' started by major, Feb 23, 2002.

  1. major


    A friend of mine and I are wanting to set up a partnership account for trading. If anyone has done this, I would appreciate any information and advice concerning taxes, and any special written agreements that may be required or are a good idea to have in this relationship in terms of dollars invested, splitting of profits, and trading parameters, ect.
  2. It depends on whether you're going to simply do it as a retail customer, or get involved as a professional, licensed trader. As a retail customer, you can make an agreement between the two of you, and simply split profits (either before or after tax consequences). Filing "Articles of Co-Partnership" or forming an LLC or other entity for trading is also a possiblity. You will then have to designate the "trader" and outline his /her responsibilities.

    Some of these things vary from State to State.

    If you're going to go professional with it, then you should simply make an agreement with your "backer" or "partner" that you will give them xx% of your trading profits when you withdraw them. "For every $10,000 I take out, you get 4,000 " or whatever.

    Hope this helps!!
  3. vsisto

    vsisto ECHOtrade

    Like Don said, it really depends on your status, retail or pro. I have set up both NASD regulated retail b/ds and non-NASD proprietary b/ds and have designed the operating agreements for both. I would be glad to help answer any questions at the number below. Too much detail to write here.