Selling securities OR just Investment deals???

What is the best entity to use when syndicating real estate deals with silent partners?

They are simply investing money while my partner and I manage the development, rentals and sales. We give them a percentage of the deal as well as an interest payment on the amount they invest.

I am told an LLP is the best way to go but if I get the general public involved, we could be selling "securities without a license". Is this true?

I know I need to see an attorney but hope to learn more before I pay several hundred per hour for conversation.

Thank you in advance.

c

Google "Howey Test", "Risk Capital Test", and check the statutes and rules on your states securities page. Compare what you are doing with the process laid out in these tests. Some states will let you ask for an opinion from the securities division - check your state.  It sounds like you need a securities license to me, but I am not a lawyer. Hope this helps!