Setting up a search fund LLC

January 05, 2023

by a searcher from Mercer University in Atlanta, GA, USA

As a new solo / self funded searcher, when is the best time to setup your search fund LLC (assuming LLC is the appropriate structure)?

I have an existing LLC that I operate my consulting business out of, established in 2013.

Do most recommend creating a new LLC for each separate acquisition?

Thanks!

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Reply by a professional
from Dartmouth College in Los Angeles, CA, USA

You could probably use your consulting LLC for the early search process until you sign an LOI. At that point you will need to set up new entity to either hold shares or assets of the target, since you'll want to keep those liabilities separate from your consulting biz. And if you want to raise money from outside investors you'll need a clean entity structure to provide for that. For follow on acquisitions it will depend on your ownership structure and whether you are buying assets or shares as to whether you need a new entity for each deal.

Reply by a searcher
from Bard College in New York, NY, USA

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