Thank-you for your reply. The new member is not buying out
the old member. The old member withdrew about 8 months ago
and was "cashed out" according to the provisions in our
agreement. As I said, from a financial and accounting
perspective, everything is very clear. My question is how
to add the new member to the partnership agreement. The
original agreement has a signature page where all 10
original members signed. I like the idea of a rider for new
members and found an example of one on the internet. Do we
have to do anything with the old member to remove her from
the partnership? She notified us in writing as the
agreement requires, but we never had her sign any type of
rider removing herself from the partnership.



IraS1@aol.com wrote:
> In a message dated 01/15/03 10:41:34 AM Eastern Standard Time, juan.mostek@kellogg.com writes:
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> As to your specific situation it appears you have a new member buying out an
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> old member? There is a way to make this transaction happen in Bivio.
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> You do NOT want to have a new member buy out an old member. This will create accounting nightmares for the club. The correct procedure is to have the old member withdraw and the new member join. All transactions are between members and the club, not between members individually. The club gives the old member the value s/he is entitled to (whether in stock or cash) and the old members units are "canceled." Then the new member buys into the club and purchases new units in whatever amount s/he desires (consistent with the club's bylaws). If, by coincidence, the amounts are the same, it will "look" like the new member bought out the old member, but in reality they should be maintained as separate transactions.
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> Ira Smilovitz

Hi Jennifer,

You need to take a look at your partnership agreement, then
your state laws that govern these things. Only then can you
make a truly informed decision.

Our partnership has a separate addendum for new member
signatures. When a new member arrives, they sign and date
this page. When a current member departs, they must send us
a note in writing. It's read into the minutes at the next
meeting and made part of our official record. We simply
draw one line through the departing member's name and write
the date of the meeting at which the resignation letter was
read. We don't keep their letter. The cashed withdrawal
check is good enough. (Which by the way, you are suppose to
keep for 7 years!)

We filed an "assumed-name certificate" in the State of
Minnesota, doing business as a general partnership. We had
to pay for the registration fee and pay for two consecutive
notices in the local paper. That ran about $90. Per our
state laws, if we add or delete partners, technically, we
are supposed to refile our registration and rerun the notice
in the paper. We choose not to do it. (Minnesota come get
me!) But at least we know what we're suppose to do. You
have to make your own choice. Most clubs do not recontact
their Secretary of State when they lose or gain new members.

If you want to see our addendum page, it's on our website at
www.bivio.com/crowriver -- right on the front page under
Partnership Agreement.

Lynn Ostrem
garbagecop@foxinternet.net