club_cafe: Re: entering annual contributions
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club_cafe: Re: entering annual contributions I would be very careful about doing this. Check your partnership agreement carefully. If your partnership agreement does not state that there is a specific contribution each month, then the members who are prepaying should get all of their units as of the date of the deposit. Here's the risk to the club...
The "suspense account, buy additional units each month" method works fine in a stable market. It works well for the members who make the once-a-year deposit in a falling market. However, in a rising market, the once-a-year dollars buy fewer and fewer units (for the same dollars) as the year progresses. Your once-a-year depositor can look at the results at the end of the year and say... "According to our agreement, I should have purchased all my units back in January. This would give me more units and a greater share of the profits/gains/assets of the club. Change the books accordingly."
So, my advice is to have the once-a-year members propose a motion that their deposit(s) be accepted on the condition that they be allocated evenly across the months. Have the club adopt the motion and have it recorded in your club's minutes. This way there can be no Monday morning quarterbacking.
In a message dated 09/02/03 12:52:59 PM Eastern Daylight Time, moeller@bivio.com writes:
Tim Thomas wrote: |
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