Does anyone have penalties for withdrawing?
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Does anyone have penalties for withdrawing? Greetings, I wanted to see if anyone has wording in their partnership agreement that penalizes members for withdrawing. I've heard that some clubs do, but most don't and just wanted some advice. Thank you in advance! Johnny Johnny, We pulled our partnership agreement from the better investing website. It has some language about withdrawing, but nothing that penalizes a member for it. That said, we did add in our own language that stated we could not add or remove members for our first year in existence (we've now been in existence for a year and 5 months) Ellen End Game Investments Ellen Shershow Pena Photography 415.690.0278 On Oct 27, 2010, at 6:24 PM, Johnny Duncan wrote:
Your information is correct. The original model partnership agreement included a penalty for withdrawing. In those days, the commissions on stock trades were substantial so they felt the need to have an economic disincentive to leave a club. However, the more recent thinking is to charge the leaving member only the cost of selling any securities necessary to raise cash to pay off the departing member. That can be minimized by transferring stock in which the club has a gain to the departing member instead. My philosophy is that I don't want someone to stay in the club solely because they don't want to incur a penalty. And it is unfair to the departing member for the remaining members to profit from the penalty. Jack Ranby, Treasurer Grants Partners Investment Club Johnny Duncan wrote: > Greetings, > > I wanted to see if anyone has wording in their partnership > agreement that penalizes members for withdrawing. I've > heard that some clubs do, but most don't and just wanted > some advice. > > Thank you in advance! > > Johnny The general consensus is that it is far more positive to stress, when someone joins your club, that it is a long term commitment. A new member should understand that they should plan to be a member for at least a year. It is disruptive to have members coming and going too often. Trying to keep people as members by assessing withdrawal penalties is probably going to be counterproductive. Once someone has decided they no longer want to participate, you probably don't want them as part of the group anyway. Life is going to happen and people may need some of the money they've invested in your partnership. Unless there is another problem, it doesn't seem right to penalize them to take out what belongs to them. -- Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio we have a 3% penility unless it is a death On Wed, Oct 27, 2010 at 9:24 PM, Johnny Duncan <duncanjohnny@bivio.com> wrote: Greetings, |
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