Is there a member limit for a club?
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Is there a member limit for a club? Hi, Is there a member limit on how many people could join an investment club? What is considered as a manageable member number for a club? Currently, I have about 10 people who are interested joining a club. thanks! richard Hi Richard, The SEC has a limited number of people who can be in a stock partnership, after which the club would require a bond and license, but I don't think you would ever hit that number! My club has eight members and we're strapped. I think 12 is the perfect number (which we are constantly shooting for!) because it's largest enough to spead the workload, yet small enough to still get ONE table in a restaurant. Keep in mind, too, that clubs bigger than 12 usually have to choose meeting locations away from the members' homes. Most people can't accommodate 25 people in their home for a meeting! We have a limit of 15 in our bylaws, which is subject to change with a simple majority vote. Yet we've never met that lofty number. But we're still hoping...! Lynn Ostrem, President garbagecop@foxinternet.net Crow River Investment Club www.bivio.com/crowriver Thank you for your advice! I think I will set the limit to 12. richard Lynn Ostrem wrote: > Hi Richard, > > The SEC has a limited number of people who can be in a stock partnership, > after which the club would require a bond and license, but I don't think you > would ever hit that number! > > My club has eight members and we're strapped. I think 12 is the perfect > number (which we are constantly shooting for!) because it's largest enough > to spead the workload, yet small enough to still get ONE table in a > restaurant. Keep in mind, too, that clubs bigger than 12 usually have to > choose meeting locations away from the members' homes. Most people can't > accommodate 25 people in their home for a meeting! > > We have a limit of 15 in our bylaws, which is subject to change with a > simple majority vote. Yet we've never met that lofty number. But we're > still hoping...! > > Lynn Ostrem, President > garbagecop@foxinternet.net > Crow River Investment Club > www.bivio.com/crowriver richard lee wrote: > Hi, > > Is there a member limit on how many people could join an > investment club? What is considered as a manageable member > number for a club? Currently, I have about 10 people who > are interested joining a club. > > thanks! > richard We had about 20 when we first started the club. About half left or were kicked out after the first year from non-attendance. We've settled on 8 and have been very happy. Wayne and Richard -
We are 15 women and we find that 15 or 16 is very manageable.
We meet in each other's homes and comfortably sit around a large dining table or
in a circular seating arrangement. We did put a cap of 17 in
our bylaws but never seemed to reach that number. When one drops
out, we wait until a replacement shows interest and currently we have 15.
I would also say that most of the 15 are very active and we do
have a rule about absences. As for non-participation, we try to give
everyone a "job" to keep them involved.
Wayne, There are legal limits to the number of investment club members you can have, but I doubt you would ever reach it. Check out www.sec.gov if you are really curious. Search "investment clubs." Our club currently has 8 members, and we wish we had more to share the load. Twelve is always a good number because you can still get one table in a restaurant. I would think that anything over 20 would be hard to manage. HOWEVER...I would rather be in a club of 5 or 6 people who are all pulling their weight, rather than a club of 20 where only 5 or 6 people are doing all the work. Beware of deadbeats. Set the rules and the expectations right up front. Good luck to you, Lynn Ostrem, President garbagecop@foxinternet.net Crow River Investment Club www.bivio.com/crowriver <<
There are legal limits to the number of investment club members you can have, but I doubt you would ever reach it. >> A slight correction here. There are no ***legal*** limits on the number of members.There are some circumstances which could necessitate a club's registering with the SEC. I consider the circumstances to be very rare, and not applicable to investment clubs which use the model NAIC agreement. You can read more about this at http://www.sec.gov/investor/pubs/invclub.htm. If you do go to that site, be sure to read the document very carefully, because it has been mischaracterized many times here, and on the various NAIC forums. There are many provisions in the article which negate the need for registration. For instance, the club's membership units must be considered 'securities' as defined by the SEC. Most club units would not be so defined. Even if a club has inactive members, the club does not automatically fall into the clutches of the SEC if those members retained their voting rights. If a club has 100 members or less, it automatically is excluded from the registration rules. However, having over 100 members does not automatically subject a club to SEC registration. I have seen many posts on these forums saying the IRS prohibits clubs with over 100 members. Not true at all. So, again, unless you are offering a free ride to your members to benefit from your investment expertise, you will not be subject to SEC requirements. Rip West Saint Paul, MN |
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