Member withdrawal
| HelpRegister |
Member withdrawal We have a member withdrawing a large amount as a full withdrawal. Some members have expressed an interest in buying some of her shares at the unit value and using that cash as part of her payout. I have no idea whether this would be a good idea or not. Pros and cons anyone? Would this be a nightmare for the treasurer? Thanks, Anne W Members could just make contributions at the current unit value, and the treasurer would then have cash to disburse without selling the stock. Avoiding or minimizing stock sales would avoid and minimize capital gains for the remaining partners. Also consider transferring appreciated stock to the withdrawing partner to delay realizing capital gains. We have a member withdrawing a large amount as a full First of all, read your partnership agreement to see if individual partner or partners may purchase the share of a withdrawing member. If it is provided for in the agreement, then partners can contribute cash equivalent to the amount of the withdrawal they want to purchase. Peter Dunkelberger Sumner Stock Selectors Investment Club We have a member withdrawing a large amount as a full Just to be clear; you must consider these to be two separate transactions. The remaining partner is not "buying" any units from the departing partner. First, you have to follow the terms of your partnership agreement to determine the amount and how you will pay the departing member, e.g. all cash or combination of cash and transferred shares of stock. You would follow the normal process in bivio to record the departure. Then if one or more remaining partners wish to make additional capital contributions in cash to acquire additional units in the partnership, they may do so. That cash could be used to pay the departing partner instead of raising cash by selling current stock holdings. Jack Ranby |
|
||||||