As a member of the club, you are liable for any issues related to incorrect partnership tax filings. You are also responsible for reporting and paying tax on your portion of any club income each year. In addition, you've made an investment in the club that you should want to make sure is being accounted for correctly.

The requirement of this paragraph, that the club perform an annual audit and that there be at least an annual report about the state of the club finances, will help you to know that club records are accurate and your interest is being properly accounted for.

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Disclaimer: statements are opinions expressed by bivio Customer Support and are not official statements from any government agency. These statements are not intended to replace professional legal or accounting advice. When in doubt, follow the advice of your lawyer or accountant who is familiar with your particular circumstances and the laws of your state.