This proposal is being written to set forth therules and policies of an investment club, which will henceforth be known as "The club" whose initial membership includes Hassan Karim, Calvin Smith, Claude Charles, Khyron, and Dana Clarke. The following issues should be taken into consideration before the establishment of "The club" as a legal entity:
1. The organizational status of "The club", including but not limited to the name of "The club" and the legal status of "The club" (ie. incorporation, general or limited partnership, or limited partnership association);
2. The objectives of "The club", including but not limited to the investment objectives of "The club" as a single entity, the achievement of individual objectives, and investment methodologies;
3. The procedures of "The club" in terms of membership, revocation or termination of memberships, size of "The club", and other rules and policies established to protect the former or current members from personal liability, as well as day-to-day management of "The club's" financial and other assets, and the selection of officers.
I propose that "The club" be organized as a Limited Partnership Association, which offers the advantage of limited liability to all partners. If, for some reason, "The club" cannot be organized as a L.P.A., the I propose that "The club" be organized as a Subchapter S corporation.
I propose the following objective for "The club":
To achieve a constant annual growth rate of no less than 10% on any investment "The club" enters into. Such investments shall include, but not be limited to mutual funds (aggressive growth, growth, growth & equity, long term debt, short term debt, high yield, and money market), individual equity and debt instruments (stocks and bonds, respectively), and Treasury securities.
I propose that any individual who submits themself for membership in "The club" have the goal of participating in a long term (5+ years) investment plan on a regular basis with the intention of allowing there assets to grow as part of the combined asset pool of the rest of the members of "The club".
I propose that "The club" incorporate into its overall investment plan any methodology which seeks to obtain a positive return on investment (ROI) for "The club" and that these methodologies include (but not be limited to) value investing (as laid forth by Benjamin Graham), growth investing (as practiced by Peter Lynch), and speculation (ie. investment in any short term endeavor which seeks maximum positive returns in a short period of time [ < 1 year ] provided the idea is approved by all members).
I propose that "The club's" officers be selected from the current membership provided that selection is made from members located within reasonable distance of the majority of other members.
I propose that the offices of President, Vice-president, Treasurer, and Secretary be created and that the person's selected to fill those offices be elected from the current memebership. The office shall be maintained for a term not to exceed one year, at which time the club membership will review each officers performance and select officers for the next year. Offices will be maintained until the member holding the position either (1) steps down, (2) terminates their membership, or (3) has their membership revoked. If an officer leaves office during the course of their term, an emergency meeting of the members will be called at which time the members will elect a member to fill the officer's duties for the remainder of the term.
I propose that the membership of "The club" not exceed 15 active members (members who contribute to the asset pool of "The club" on a monthly basis and thus have voting privileges) and not exceed 20 total members.
I propose that only active members may participate in the selection of officers, contribute to the asset pool of the club, withdraw their funds from club accounts, propose or vote on new investments, and obtain access to club financial records. Non-active members AND active members may participate in club meetings.
I propose that the members of "The club" meet during the second Sunday of every month at 12:00 p.m. for club meeting, at which time any active member may propose a new investment or perform their presentation of a new investment. Also during this time, voting on current issues of interest to the members of "The club" shall take place, as well as collection of funds from members to be directed into a club-approved investment or distribution of funds from club assets to any members.
I propose that any emergency meeting of the membership of "The club" be announced at least forty-eight (48) hours prior to the event. The person calling the the emergency meeting must be an officer and must report the meeting to the President, Vice-president, Treasurer, and Secretary. The Secretary will then be responsible for informing all members of the date, time, location, and purpose of the meeting. Any member who is unable to attend shall be informed by the President as soon as it is possible to contact that member.
I propose that any distributions (ie. dividend payouts or capital gains payouts) be approved unanimously by the active membership of "The club". Otherwise, all distributions shall be re-invested into "The club's" investment holdings.
I propose that any member has the right to terminate their membership at any time, provided they give the remaining members of "The club" at least one (1) week's prior notice.
I propose that any member shall have their membership revoked for any of, but not limited to, the following offenses:
I propose that any member whose membership is terminated or revoked by given their proceeds out of "The club's" assets. These proceeds shall be determined as a corresponding percentage of their contribution to the total invested principal of "The club".
I propose that each member of "The club" be required to present a new investment idea, whether it be an equity, debt, or mutual fund investment, to the membership of the club once every three months.The purpose of this provision is to require every member to understand, at a more advanced level, the implications of their investment decisions by conducting research into an investment, including feasibility, cost, and expected return, and presenting their findings to the body of "The club".
I propose that day-to-day management of "The club's" assets be handled by the Treasurer. This includes deposition of member funds into club accounts, withdrawl of member funds from club accounts, maintenance of club financial and tax records, and distribution of dividends or capital gains to individual members of the club.
This concludes my proposal for the formation of an investment club. Send comments to