Partnership Agreements- The treasurers' perspective (Accounts)
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Partnership Agreements- The treasurers' perspective (Accounts) Jerry,
I'm the treasurer of a new club
and we are in the process of writing our partnership agreement.
Specifically, as treasurer, what issues should I be most concerned
with?
Let's finish our discussion of the treasurers' perspective of
the partnership agreement by highlighting several of the smaller
issues.
With regard to the club checking or Bank
Account, many clubs will direct that the signatures of two partners
are required on each check issued by the club. As far as the Broker Account is
concerned, there are several standard provisions that should be included to
facilitate transactions with your broker. These are.....
"Any corporation or transfer agent called upon to transfer any
securities to or from the name of the partnership shall be entitled to rely on
instructions or assignments signed by any partner without inquiry as to the
authority of the person(s) signing such instructions or assignments, or as to
the validity of any transfer to or from the name of the
partnership."
" At the time of a transfer of securities, the
corporation or transfer agent is entitled to assume (1) that the partnership is
still in existence and (2) that this Agreement is in full force and effect and
has not been amended unless the corporation has received written notice to the
contrary. "
Without these provisions as part of your partnership
agreement, it is likely that your broker may require signatures of ALL club
members before transferring securities to or from the partnership, as in
the case of a member withdrawal where securities are transferred to the
withdrawing member. As you can imagine, it may be a rather daunting
task getting the signatures of all members in a short period of
time.
In most partnership agreements there is a provision that
states that Books of Account shall be kept and that these records, whether in computer form or
paper form, must be available and open to inspection by any partner at any time
. Keeping your club records on bivio makes this very
easy since members of your club may review your club records at any
time and as often as they want, without you, the treasurer, having
to do anything.
Also, the treasurer should give the club a full and complete
Annual Accounting of the
financial status of the club. It would be appropriate to do
this after closing the books for the year and in conjunction with a survey or
audit of the financial records by an audit committee
that is independent of the treasurer.
There you have it. There are many important articles in
a Partnership Agreement. As treasurer, you'll need to have an
understanding of each of them.
As always, feel free to send you questions, comments, and
suggestions to Trez_Talk.
Jerry
St.Louis, Missouri
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