Jerry,
 
I think the thing that most concerns me (and probably other neophytes) is the legal/tax issues and just what legal forms (partnership agreement?) and tax declarations have to be set up before you can actually start collecting and investing funds. 
 
Bernard Bruns
 
 Actually, this is the easier than one might think at first glance.  
 
First, a new club should establish a partnership agreement.    This agreement doesn't have to be fancy.    As a matter of fact, IRS Publication 541 - Partnerships states that the agreement can be oral or written.   I would, however, recommend that you create a written document that defines certain specifics such as the formation, management, membership entry and withdrawal from the club, and the accounting/recordkeeping of the club.    You'll find a recent discussion of many of these issues right here in Trez_Talk .  I'd also recommend Starting and Running a Profitable Investment Club: The Official Guide from the National Association of Investors Corporation (NAIC) by Thomas O'Hara, Kenneth S. Janke which you can ordered directly from http://www.bivio.com/hm/clubs.html
 
Secondly, before your new club opens a bank account or purchases any securities, you'll need to get a tax ID number (EIN) for your club.   This is the equivalent to a Social Security Number for your club.   To obtain an EIN you will need Form SS-4.   Simply contact the IRS or go to the IRS web site at http://www.irs.ustreas.gov/forms_pubs/forms.html to download Form SS-4.  Once you have the SS-4 Application for Employer Identification you will find that it provides all the additional information you will need.
 
Depending on which state that you decide to officially form your club in, you may also need to file a D.B.A. (Doing Business As), or similar registration, with the local county or state government.  This process simply establishes your partnership (investment club) and its name in a specific location.   Check with the Secretary of State, state licensing board, Department of Revenue, or other appropriate county or state regulatory agency to find out what type of filing is required, if any, in the state that you wish to form your partnership (investment club).   Generally, registering a partnership is relatively inexpensive.   In 1992, my club filed a partnership D.B.A. with the Missouri Secretary of State.  I believe it cost us $7.    
 
Another source of information regarding local filing requirements is your local NAIC Chapter.   You can find specifics and contact information at http://www.better-investing.org/regions/regions.html
 
Now, you're ready to open a bank/broker account and to start collecting and investing funds.   What's left to do?
 
Your treasurer will find everything he/she needs right here on bivio to do the accounting and bookkeeping for your club.   Then, at the end of each year, your treasurer will close the books of the club and file a Partnership Tax Return.  This return consists of Forms 1065, K-1, and other associated schedules.  This return is an informational return, as the club itself pays no tax.  As a partnership, all the income and expenses realized by your club during the year is allocated to the individual club members.   The club then must give each member a copy of their K-1 so that they can include their allocation of taxable items on their individual return.      
 
bivio's technical staff is in the midst of developing the software that will allow you to produce everything you need for your club's Federal Tax Return.    The goal is to have this tax software done and released before the end of next month.   And, like the accounting software built into bivio, the tax software will also be free to users.
 
Cheers,
 
Jerry
St. Louis, Missouri
Trez_Talk@bivio.com