Questions about partnership agreements
Brad asked several great questions about some rather standard paragraphs found in many investment partnership agreements.
 "Any corporation or transfer agent called upon to transfer any 
securities to or from the name of the partnership shall be entitled to rely on 
instructions or assignments signed by any partner without inquiry as to the 
authority of the person(s) signing such instructions or assignments, or as to 
the validity of any transfer to or from the name of the 
So, this big "loophole" in the safety of the funds is for the brokerage house's convenience? 
Actually, I think this is more for the convenience of the club.   According to NAIC's Starting and Running a Profitable Investment Club, "NAIC worked with the Securities Transfer Association to make operating a club more convenient.  This led to the establishment of Rule 3.0610.  This rule permits clubs operating as  partnerships to transfer securities directly into or out of the club's name with the signature of only one partner."   Without this regulation and appropriate provisions in the partnership agreement your club may have been required to have the signatures of ALL partners to effect a transfer.   As you can imagine, this would be very cumbersome.  
Can you list brokers that *don't* have this requirement (inexpensive ones), that we could use and assign 2 or 3 officers as the ones responsible for transfers into and out of the account?
Most brokers will want a club to designate an agent for the club.   This "agent" is a partner of the club who has been designated by the club to transact the clubs business.    A broker may allow your club to designate more than one "agent" or may allow your club to give limited power of attorney to one or more additional club members so that they can initiate trades in the agents absence.
Finally, I have another question about the Partnership Agreement:  Is there any reason NOT to modify the NAIC sample agreement to say things like the following:
Terms of Payment. In the case of a partial withdrawal of up to eighty percent (80%) of the value of a partner's capital account, payment may be made in cash or securities of the partnership or a mix of each at the option of the partner making the partial withdrawal, such option to be exercisable only once during any twelve (12) month period. In the case of #1 a full withdrawal, #2 a partial withdrawal of more than eighty percent (80%) of the account, or #3 a second or subsequent withdrawal within a twelve (12) month period, payment may be made in cash or securities or a mix of each at the option of the remaining partners, with an apportionment of capital gains that is to be passed on to the partner making the withdrawal, made as fairly as is practicable, with "as fairly as is practicable" solely determined by majority vote of the remaining partners.
I am concerned by the following statement.    "..... payment may be made in cash or securities or a mix of each at the option of the remaining partners......."
The benefits of paying a member making a TOTAL withdrawal with appreciated stock are clear.    On the other hand, giving stock to a member making a PARTIAL withdrawal MAY have an adverse impact on that person.   That is why NAIC's partnership agreement allows the PARTIALLY withdrawing member to decide if they want cash or stock.   If you want to limit the number and cumulative value of subsequent partial withdrawals by a member, I think a clear limit would be in order without changing the payout methodology as defined in the sample NAIC agreement.
For more information on withdrawals and various payout methodologies you might look at the articles I wrote at ...
.....why is the following clause listed under forbidden acts, "No partner shall: c. Purchase an investment for the partnership where less than the full purchase price is paid for same."
Why is this clause there? 
That provision is there to prevent the use of margin.    The use of margin adds a significant element of risk that may not be suitable for most investment clubs.  
Thanks for using bivio!
Jerry Dressel
St.Louis, Missouri