general partnership agreement

Raka maka on

i apologize for my rant below. i will reframe my previously answered question again,
Is there anything legally(SEC/IRS) wrong to have investment club general partnership agreement to reflect unequal profit sharing? or perhaps it may legally correct and morally wrong?
example, treasurer may take additional 10% of net club profits and other members get less 10% of annual club profits?
Can i write /modify it like : Sharing of Profits and Losses. Net profits and losses of the partnership shall inure to, and be borne by, the partners, in 'UNEQUAL' proportion to the credit balances in their capital accounts. Any tax liability, stemming from annual capital gains, shall be divided, in proportion to the 'NET PROFITS', and made the responsibility of each partner.

unequal distributive share is way of limited partnerships but investment clubs are there to 'educate' people about investing. at least theoretically.
How can i get compensated for my work as 'investment educator?' my moral compass is stuck at this time.

Irina Clements on

I guess I don't understand context of the phrase "compensated for my work" in your question.

Is this a new club you are writing the agreement for?

I guess my issue is that you [("the global you") -all the members of the club are educating each other]. As with anything, some people do more work than others. On the other hand, if club partners are not doing their parts, it's time to get them to move on.

If it is a new club, solicit only motivated responsible people as members. Some other officers do a lot of work too, the secretary and minutes comes to mind.

I am the Treasurer for one of my clubs and I do it because I have a facility with numbers and I enjoy it.

My "compensation" is that the books are done accurately, the form k-1s and taxes are filed as soon as possible and the other members have faith in me
(Although they trust but verify with annual audits).

My $0.02.
Be Well. Irina Sent from my iPad

> On Jun 9, 2014, at 6:20 PM, Raka maka <rakamaka@inbox.com> wrote:
>
> i apologize for my rant below. i will reframe my previously answered question again,
> Is there anything legally(SEC/IRS) wrong to have investment club general partnership agreement to reflect unequal profit sharing? or perhaps it may legally correct and morally wrong?
> example, treasurer may take additional 10% of net club profits and other members get less 10% of annual club profits?
> Can i write /modify it like : Sharing of Profits and Losses. Net profits and losses of the partnership shall inure to, and be borne by, the partners, in 'UNEQUAL' proportion to the credit balances in their capital accounts. Any tax liability, stemming from annual capital gains, shall be divided, in proportion to the 'NET PROFITS', and made the responsibility of each partner.
>
> unequal distributive share is way of limited partnerships but investment clubs are there to 'educate' people about investing. at least theoretically.
> How can i get compensated for my work as 'investment educator?' my moral compass is stuck at this time.

JAYNE GILBERT on

I would think if you want to work as an "investment educator" that you become a certified financial planner. Getting paid for being "educator" of a club or treasurer does not seem ethical to me - and probably by you as you mentioned your "moral compass". The entire club are educators and learners. My grandfather had a great saying that usually put me in my place - You don't know damn all!!!

On Monday, June 9, 2014 6:01 PM, Irina Clements <irina39@verizon.net> wrote:

I guess I don't understand context of the phrase "compensated for my work" in your question.

Is this a new club you are writing the agreement for?

I guess my issue is that you [("the global you") -all the members of the club are educating each other]. As with anything, some people do more work than others. On the other hand, if club partners are not doing their parts, it's time to get them to move on.

If it is a new club, solicit only motivated responsible people as members. Some other officers do a lot of work too, the secretary and minutes comes to mind.

I am the Treasurer for one of my clubs and I do it because I have a facility with numbers and I enjoy it.

My "compensation" is that the books are done accurately, the form k-1s and taxes are filed as soon as possible and the other members have faith in me
(Although they trust but verify with annual audits).

My $0.02.
Be Well. Irina Sent from my iPad

> On Jun 9, 2014, at 6:20 PM, Raka maka <rakamaka@inbox.com> wrote:
>
> i apologize for my rant below. i will reframe my previously answered question again,
> Is there anything legally(SEC/IRS) wrong to have investment club general partnership agreement to reflect unequal profit sharing? or perhaps it may legally correct and morally wrong?
> example, treasurer may take additional 10% of net club profits and other members get less 10% of annual club profits?
> Can i write /modify it like : Sharing of Profits and Losses. Net profits and losses of the partnership shall inure to, and be borne by, the partners, in 'UNEQUAL' proportion to the credit balances in their capital accounts. Any tax liability, stemming from annual capital gains, shall be divided, in proportion to the 'NET PROFITS', and made the responsibility of each partner.
>
> unequal distributive share is way of limited partnerships but investment clubs are there to 'educate' people about investing. at least theoretically.
> How can i get compensated for my work as 'investment educator?' my moral compass is stuck at this time.

Laurie Frederiksen on

Hi,

Another thing to think about is that there are only two ways to allocate expenses in bivio software. You can allocate them to each member based on their ownership percentage in the club or you can allocate them in an equal dollar amount to each member.

There is no way to do "special allocations" to one person only prior to allocating the remainder of profits to the rest of the club. Nor is there a provision for doing the accounting and tax preparation necessary for "paying" a partner to provide services to the club. That would probably be considered a guaranteed payment and would be taxed differently to the partner that provides the service than other club allocations. That means there are special entries that would need to be made on 1065 forms.

Nor is there a way to do quarterly allocations which might be needed if you wanted to do your allocations based on quarterly profits.

There are a lot of types of partnerships in the world that are not investment clubs. Partnerships have a lot of flexibility in how they can allocate income. But you'd need to work with an accountant to do your accounting and prepare your taxes to make sure that any special issues you might have to deal with would be addressed correctly.

Laurie Frederiksen
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