club_cafe: language for bylaws on withdrawing members

iras1 on

I don't think you need language like that. You don't want to give members the ability to string out the withdrawal process. Instead I would use language that states something like "the club will process all withdrawals within x days of the withdrawal valuation. Costs of processing the withdrawal will be charged to the member requesting the withdrawal" Members have up until x days to provide account info or else you submit the letter to the broker asking for certificates. End of story.

In a message dated 02/17/08 6:36:25 P.M. Eastern Standard Time, etana_finkler@bivio.com writes:

We want to clarify the procedure and language in the bylaws
on withdrawing members

We
want to allow for 1 month for them to give us an account
number, and if we don't get it, we say that we will
transfer the securities to them in certificates and deduct
the charge of the certificates from their withdrawal. Last
year it was REALLY SLOW getting account numbers from
withdrawing members, partly since we had never transferred
securities before.

This is what we've written so far:

"The Valuation Date for a withdrawing member is the NEXT
Valuation Date after:
a. the notice to withdraw is received AND
b. we have been given a TDAmeritrade taxable account number
and her account full name to receive the transferred
securities.

"Example: a member withdraws the day before the May meeting.
Her withdrawing Valuation Date is the Friday before the June
meeting, providing we have her brokerage account number. If
we have not received her account number by xxxxx we will
purchase stock certificates to transfer and deduct the
cost/s to the withdrawing partner"

thanks, Etana and Treasurer Carol

Delicious ideas to please the pickiest eaters. Watch the video on AOL Living.

Etana Finkler on

Ira and Gene,

You and Gene have just been fantastic with making our Tax
process understandable: both in clarity and in such fast
timeliness of response.... Will I be able to thank you in
person at InvestEd this year? I'll be there!

What do you suggest for the "x" in number of days in each of
the places below? I'm thinking 45 or 60 days for Treasurer
to process, and 30 days for them to send account number? Are
those too long?

If we use those longer times, would the Valuation Date
remain the Friday before the next meeting after they give
notice? If so, perhaps they should have 15 days in which to
send us their account number. Since it's in the bylaws, they
should have it ready at the time they withdraw anyway.

thanks, Etana

"the club will process all withdrawals within x days of the
withdrawal valuation. Costs of processing the withdrawal
will be charged to the member requesting the withdrawal"
Members have up until x days to provide account info or else
you submit the letter to the broker asking for certificates.

Etana Finkler on

All-

> What do you suggest for the "x" in number of days in each of
> the places below? I'm thinking 45 or 60 days for Treasurer
> to process, and 30 days for them to send account number? Are
> those too long?

Actually, we probably could do the withdrawal within 30
days, now that we have learned bivio... It really is all
pretty easy.

What numbers do you suggest?
thanks again,
Etana

Rip West on

Etana,

I recommend the language of the standard partnership agreement. To wit:

The partner withdrawing a part or all of the value of his capital account shall give notice of such intention in writing to the Secretary. Written notice shall be deemed to be received as of the first meeting of the partnership at which it is presented. If written notice is received between meetings it will be treated as received at the first following meeting.

In making payment, the value of the partnership as set forth in the valuation statement prepared for the first meeting following the meeting at which notice is received from a partner requesting a partial or full withdrawal, will be used to determine the value of the partner's account.

This means that, even if a member gives notice of withdrawal at a club meeting, there will be a month before the valuation of that member's account will be determined. My clubs always had the policy of paying off members with appreciated stocks, so the member would be instructed, at the time notice was given, to open an account with the club's broker. This gives that member at least a month to get it done. At the next meeting, the stocks to be used will be picked and the instructions to the broker should go out the day after the meeting. The standard agreement provides that the stock shall be transferred as of the date of the valuation to be used for determining the members value.

If the member hasn't opened the account as of the next meeting date, simply instruct the broker to issue certificates and use the withdrawal fee to assess the member for the charge. I don't think you even need special wording beyond that.

This is simple, and fair to all.

Rip West
Saint Paul, MN

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