What is the legal structure of the investments on the HoneyBricks platform?

Investments you find on the HoneyBricks platform are membership interests in commercial real estate projects, which are legally tied to security tokens on a blockchain.

The HoneyBricks legal structure is made up of two components

  1. Individual LLCs that hold the real estate investments
  2. The Managing Member of the LLCs which is a HoneyBricks entity

This structure allows individual investments to be legally independent, ensures you own the real estate directly and that HoneyBricks is completely separate. 

Video Overview

Below is a short video of the legal structure

Individual LLCs

Real estate projects listed on the HoneyBricks platform are investments with leading commercial real estate companies throughout the US.

These companies use HoneyBricks to raise and manage capital for there real estate projects.

Each real estate investment on the HoneyBricks platform is completely separate from each other as each investment is placed in a legally independent limited liability company (LLC).

Understanding Membership interests

  • An LLC ownership is made up of membership interests
  • These are like shares of a company (for example, there may be 1000 membership interests in the company with 10 different members holding 100 interests)

Understanding Security Tokens

  • The membership interests of the LLC are then legally wrapped as security tokens on a blockchain, which are then recorded on the blockchain
  • The end result is that security tokens on the blockchain represent the LLC’s membership interests, which allows greater access, efficiency and transparency of the investment

Managing Member

For multi-member LLCs to legally function, they require a Managing Member who is responsible for the LLC.

A HoneyBricks entity is the Managing Member of the LLC, in which each holds separate interests in the real estate investments. You'll see this as HoneyBricks Manager LLC on the investment documents.

HoneyBricks owns the Managing Member, but this managing member could be removed at any time through a majority vote of the membership interests.

If HoneyBricks ceased to exist, investors using the HoneyBricks platform would not lose their investments and would continue to maintain underlying ownership in the real estate projects. 

The Managing Member (i.e. HoneyBricks Manager LLC) could be removed a new managing member (such as an accounting or law firm) could be appointed.