Partnership Agreements- The treasurers' perspective (Contributions)
I'm the treasurer of a new club and we are in the process of writing our partnership agreement.   Specifically, as treasurer, what issues should I be most concerned with?
Today, as we continue, let's look at the provisions in a partnership agreement that pertain to member contributions and capital accounts.
Many clubs set a minimum monthly capital contribution amount that is to be made by each member of the club.  Often this is set in the $25 to $50 dollar range.   Your club, however, may specify any appropriate dollar amount or choose to not even require a minimum capital contribution.   It's entirely up to you and your fellow club members to make this determination.  
Also, some clubs place restrictions on the total size of each member's capital account.   My club, for example, places a limit so that no partner's capital account shall exceed more than 15% of the capital accounts of all the partners.   If, due to the withdrawal of a partner, one or more of the remaining partner's capital accounts exceeds 15% of the capital accounts of all the partners, those partners are limited to making the minimum monthly capital contribution until such time as their capital accounts are once again reduced below 15% of capital accounts of all the partners.    Other clubs place no limit on the relative size of a each member's account.     As you will later see, the relative size and related restrictions placed on the capital account of each partner will play an important roll in determining how your club wants to handle its management.     Check out Ask_Candis  for a recently posted message on this very topic.
Also, standard in most club partnership agreements is a paragraph that defines the capital account of each member.    Typically, this paragraph will specify that an account will be maintained in the name of each partner, that any change in the value of the partnership will be applied respectively to each partner's account, and that any contribution or withdrawal made by a partner will be applied respectively to that partner's account.    As in the Partnership Agreement of the Mutual Investment Club of Detroit , your club should include a paragraph that directs that all profits and losses of your club are to be shared by each member of the club in proportion to the value of each member's capital account.
Next, we'll discuss the management of your club and how you should conduct club voting.
Until then, and as always, feel free to send you questions, comments, and suggestions to Trez_Talk.
St.Louis, Missouri