Sample Investment Club Partnership Agreement (*explanatory note, this is a template between a club & its member)
Now therefore it is agreed, The name of the Partnership will be Sample Investment Club, and shall hereby be referred to as “The Partnership”, “Club”, or “xxx”. Those participating in the Sample Investment Club shall herby be referred to as “members”, or “partners”.
- Term: The Partnership shall begin on January 1st, [year]. Prior to any anniversary date thereafter, the Partners may vote to terminate the Partnership. Written notice of the meeting where termination is to be considered shall be sent to all members. A two-thirds majority shall rule in this matter. Should a vote to terminate carry, payment shall be made for all liabilities of the Partnership. Assets should be liquidated and disbursed by or before December 31st of the year the vote to terminate is carried.
- Purpose: The only purpose of the partnership shall be to invest the assets of the partnership solely in stock, bonds, and other securities for the education and benefit of the Partners.
- Meetings: Periodic meetings shall be held as determined by the Partnership.
- Contributions: An initial buy-in of Two hundred fifty dollars, ($250.00), is required of all Partners and becomes part of their Capital Account. Incoming Partners must submit a check made for the buy-in amount, payable to the Club Brokerage account. Partners will make contributions to the Partnership at each meeting of at least forty dollars, ($40.00), or as decided by unanimous vote of the Partners, payable by check to the Partnership Brokerage Account. Should a Partner be delinquent in their contributions a delinquent fee, as determined in the fee schedule in the Club Operating Procedures; will be imposed on said Partner. Should the delinquency exceed sixty-one days, (61), the Partners membership will be terminated as outlined in the Club Operating Procedures. Each Partner will be held liable for any returned check fees incurred by the club from the Club Brokerage Account. In addition the Partner having a check returned will also be liable for a fee according to the fee schedule written in the operating procedures. This returned check fee will be deposited to the Club Petty cash account and not credited to Partners Account. Upon the death of a Partner, their contribution shall cease. Refer to Sec. 16 on Death Liquidation. No Partner shall exceed twenty percent, (20%), of the Capital Account of all Partners. If any partner meets or exceeds twenty percent of the clubs capital, that partners contributions will stop without penalty until they are below the 20% threshold.
- Valuation: The current value of the assets and property of the Partnership, less the current value of debts and liabilities of the Partnership, herein referred to as Value of the Partnership, shall be determined as of the statement date of the Financial Partner’s monthly statement. The aforementioned date shall be referred to as Valuation Date.
- Capital Accounts: There shall be maintained in the name of each Partner, a Capital Account. Any increase or decrease in the value of the Partnership on any Valuation Date shall be credited or debited, respectively, to each Partner’s account in proportion to the value of each Partner’s account on said date. Each Partner’s contribution shall be credited to that Partner’s Capital Account.
- Management: Each Partner shall participate in the management and conduct of the affairs of the Partnership on an equal basis. Decisions shall be made by a majority of the Partnership membership present at meetings. Voting will be administered as outlined in the Club Operating Procedures.
- Profits/Losses: Net profits and losses of the Partnership shall inure to, and be borne by, the Partner’s in proportion to the credit balances in their Capital Account.
- Books of Account: Books of account of the transactions of the Partnership shall be kept, and made available for inspection or examination by any Partner at the meeting date. The Financial Partner will utilize financial management software approved by the Partnership.
- Annual Accounting: At the first business meeting of each calendar year a full and complete account of the condition of the Partnership shall be made to members.
- Club Account: The Partnership may select an Institution for the purpose of opening a Partnership account. Funds deposited in said account shall be withdrawn by checks signed by the Financial Partner or other appointed Partners.
- Broker Account: The Partnership may select a broker and enter into such agreements with said broker as required to carry out transactions approved by the Partnership. Securities purchased by the Partnership may be held in the name of the Partnership. The Financial Partner, or appointed Partners, shall perform ministerial functions of giving orders to the broker for transaction which have been authorized by a majority of the Partnership present at the meeting. The Financial Partner shall provide a statement to the Partners at the next meeting showing transactions between the broker and the Financial Partner.
- Compensation: No Partner shall be compensated for services rendered to the Partnership, except for reimbursement of authorized expenses.
- Withdrawal: Partners agree to maintain membership for two (2) years. A Partner leaving prior to their two-year anniversary date will be paid according to the Operating Procedures payout schedule. Any Partner withdrawing from the Partnership after the initial two years of membership will receive payment as outlined in the SIC Operating Procedures. Withdrawal must be a written and signed request. Resignation must be received in time to be an agenda item and will be accepted at that time.
- Death or Incapacity: In the event of death or mental or physical incapacity, or if a Partner is unable to participate actively in the Partnership for reasons to be approved by a two-thirds majority of Partners, one-hundred percent (100%) of said Partners account, less expenses incurred to liquidate assets to satisfy said account shall be made available for payment to the Partner’s estate.
- Officers: Presiding Partner, Presiding Partner Elect, and Recording Partner will be elected annually at the last meeting of the calendar year. Officers will assume office at the next regularly scheduled meeting. Officers may succeed themselves in the same office. The Financial Partner shall be elected every two years and their two year term will run from April 1st to March 31st. Officers assume the responsibilities outlined in the Club Operating Procedures.
- Auditing: Within thirty, (30), days prior to the annual accounting, an auditing committee comprised of two non-officer Partners, appointed by the Presiding Partner, shall inspect the Club’s financial records in conjunction with the Financial Partner.
- Additional Partners: Additional Partners may be added as outlined in the Club Operating Procedures.
- Policies and Procedures: The Partnership may adopt Policies and Procedures of Operation by a majority vote. Those adopted Policies and Procedures will become a part of this Agreement and be known as Investment Club Operating Procedures (Club Operating Procedures).
- Amendments: Annually, The Partnership may review and amend this Club Agreement by a majority vote.
- Forbidden Acts; No Partner shall:
- Have the right or authority to bind or obligate the Partnership to any extent whatsoever with regard to any matter outside the scope of the Partnership business.
- Assign, transfer, pledge, mortgage or sell all or part of their interest in the Partnership to any other person(s).
- Purchase an investment for the Partnership where less than the full purchase price is paid for the same.
- Use the Partnership name, credit or property for other than Partnership purposes.
- Commit any act detrimental to the best interest of the Partnership or which would make it impossible to carry on the business or affairs of the Partnership.
This Agreement of Partnership is hereby declared and shall be binding upon the respective heirs, executors, administrators and personal representatives of the Partners.
In witness whereof, the Partners have caused this Agreement of Partnership to be executed as of the date indicated.
It is therefore agreed the following upon signing, form a General Partnership, in and accordance, with the laws of the [country].
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This Partnership Agreement was originated Jan. 1, 2XXX. This version and Sample Investment Club Operating Procedures supercede all previous documents.
