Help!
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Help! So we became a club a few days ago with everyone contributing the same amount to start ($240). We have one more member who wants to join but our stocks have already had some gains. If he contributes the same $240 he will actually have a higher "valuation" than the existing members. I guess my question is how do I add a new member and keep him equal share with everyone else who just started? Patrick, The founding members each invested $240, which is now worth more (say $250) since your stocks have gone up in value. A new member joins and invests $240. That new member will have a *lower* ($240) valuation that everyone else's ($250). If you want that new member to have the same valuation, you need to date their $240 investment on the same date as the founding members. But why would you want to do that? What if a new member joins in a year? In that situation there is no way to have them be equal (in both units and dollars) to the rest. Members who join at different times *should* have different valuations (and different numbers of units) even if they've invested the same number of dollars. The whole point of unit accounting is to eliminate any need for members to be equal. You'll save your club a lot of unnecessary issues later if you dispel the notion right at the beginning that all members need to be equal. What does your partnership agreement say about members joining? In most clubs, new members join effective on an official monthly meeting date. So, having a member join "a few days later" isn't even possible. -Jim Thomas Why does it matter? What you are doing will bite you latter on. What happens when someone wants to join your club latter on but needs to plop down $1,000, $5,000 or $10,000. Bivio makes it so easy to have different amounts for everyone. My club has partners who own 2% and up to 22% of the value of the club and some contribute $25 and others up to $150 a month. Just make sure that everyone has equal say in voting. John -------------------------------------------------- From: "Patrick O'Donnell" <podonnell1@bivio.com> Sent: Wednesday, February 04, 2009 10:12 PM To: <club_cafe@bivio.com> Subject: club_cafe: Help! > So we became a club a few days ago with everyone > contributing the same amount to start ($240). We have one > more member who wants to join but our stocks have already > had some gains. If he contributes the same $240 he will > actually have a higher "valuation" than the existing > members. I guess my question is how do I add a new member > and keep him equal share with everyone else who just > started? Not really wanting to reopen the perpetual argument on equal voting vs. voting by ownership share, I have to take exception to your last statement. I think a strong argument can be made for proportional voting, especially when members have vastly different amounts of money at risk in the club. Nevertheless, what I would say is "Make sure your Partnership Agreement reflects how your club wants to conduct business, and that you act in accordance with its terms."
Ira Smilovitz
In a message dated 02/05/09 02:01:12 Eastern Standard Time, rice.j1969@att.net writes:
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