Is it legal to pool money with my friends and invest? Or are we not allowed to do that?

Money & friendship does not mix well in the absence of well-defined, black and white contract which explicitly state out each individual entitlements/obligations etc

Hi anon,

It may be tempting to do that, but I would not. Money has a way of destroying relationships. You can't guarantee that nothing will go wrong with your investment decisions. It's probably best to keep it only at family level, and even then things can go very very wrong.

How will you account for the decision making? What are the proportion of each person's stake? Is a simply majority enough for a buy/sell or will you require unanimous decision? And most importantly: if the investment loses money, what happens next? Imagine if a stock is losing money but 1 of you has extreme conviction, while the other 2 want to exit. You may never solve the arguement if an unanimous decision has to be reached.

Legally speaking, OR/AND accounts do allow for investments to be made with more than one person, but any more than 2 and you will have to set up a company structure as mentioned by Sharon.