Setting up a search fund LLC

searcher profile

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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commentor profile
Reply by an intermediary
from University of Tennessee in Denver, CO, USA
Agree with Reagan. I would definitely go new LLC separate from your consulting business. When you get under LOI you can ask whether you need to create an additional entity in which you will house the acquired business assets. Your attorneys will be able to provide the best advice here.
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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.
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