Consultant’s Corner: Investing Through a Business Entity

Investing Through a Business Entity

Q: I am interested in trading on the Nadex. I am concerned about giving out my private information in order to do the trading; what are the pros and cons of trading as a business (Corporation, LLC, etc.) vs. trading as an individual?

Online Trading Security

Of course, essentially every business that conducts activity online (stock brokers, banks, retailers, etc.) is subject to having its files hacked or compromised; however, these companies have state of the art computer security systems that avoid or minimize these problems. Millions of individuals safely trade stock and other securities online under their personal information. Also, a security investment account under an LLC or corporation would have exposure to being hacked or compromised, though it would not involve your personal non-public information (social security number, etc.). You can review the following Nadex and industry articles regarding online stock trading security issues:

Personal Investing through a Business Entity

Generally speaking, it is very unusual for an individual to establish a business entity simply to conduct personal securities trading activities unless the individual is a professional trader. We recommend that you consult your local tax advisor in order to determine if there is any possible tax advantage to using a business entity for your personal securities investing activities. You can review the IRS and industry information regarding professional stock traders through the following resources:

Bill Wortman

Bill Wortman

Bill Wortman is the Chief Business Consultant for, with over 40 years of business experience. In addition to 12 years consulting small business owners, Bill’s professional career includes a big-eight CPA accounting firm, national consumer finance, big-three automotive manufacturing, Arby’s fast food, marketing, and other industries. He’s held multiple executive-level positions and fulfilled the role of CFO at large, publicly held (NYSE, NASDAQ, and AMEX) corporations. In addition, he’s been an owner of private ventures involving residential real estate development and a General Motors new car dealership.