Cohousing-L Mailing List: securities

[NKaten947 (NKaten947]

I just got back from talking to two lawyers today. They asked me how
cohousing groups handle LLC's and securities. It is my understanding that we
are in possible violation of security laws when the original members ask
people to put in money towards a unit to become members, especially when they
don't have a significant development plans to disclose to  prospective
members. We are in the state of Washington. 
.. Has anyone had to address this issue in Washington ? One lawyer suggested
we talk to a securities lawyer in Seattle and the state Attorney General's
office. 

The lawyer asked if we would be a 504 or a 505 tax (code?)

Thank you. Kate N. Nichols