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The constitution of the Threebrooks Investment club has been pasted here in its original word format. The intention is that it may serve as a starting point for potential investors, intersested in forming their own investment club. Along with the information on the proshare website (linked to on our links page) it will give one an idea of what is involved.
RULES OF THE CLUB
1. THE AFFAIRS OF THE CLUB
The affairs of the club shall be conducted in accordance with the letter
and spirit of the constitution laid down by the members. The constitution
may only be changed by agreement of not less than 75% of current members
of the club.
2. OFFICERS
The affairs of the club shall be managed by three officers - chairperson,
honorary secretary and honorary treasurer - who shall be elected by a simple
majority of members attending the annual general meeting of the club. These
officers shall resign at the following annual general meeting but shall
be eligible for re-election. If an officer should leave the club, die or
otherwise be unable to continue to carry out his/her duties, a replacement
may be elected at a subsequent ordinary meeting of members. Other officers
may be elected from time to time to assist the three main officers.
3. MEETINGS
a) In each year there shall be held 11 monthly meetings and one annual
general meeting, at which all members shall be entitled to be present and
to vote on all matters.
b) Dates and venues of meetings may be varied in accordance with a resolution supported by a simple majority of those attending a properly constituted meeting of the club. Such resolutions and all others must be carried at a meeting where there is a quorum comprising of more than half of the current membership.
c) All members shall be given at least 5 days notice of dates and venues of meetings.
d) A special general meeting may be convened by not less than three members for the purposes of resolving special items of club business subject to a written request being submitted to the secretary who will without undue delay then give at least 21 days notice to all members.
4. MEMBERSHIP
In accordance with the constitution the membership of the club shall
not exceed 20 persons at any time.
5. ELECTION OF NEW MEMBERS
a) The election of a new member is conditional upon there being no
objection from a member at the meeting at which the application is considered.
b) A prospective member must be proposed and seconded by two existing members at a monthly meeting of the club. Subject to acceptance by all members attending that meeting the name and address of the prospective member will be included in the minutes, which will be circulated to all members prior to the next monthly meeting.
c) The club reserves the right to refuse admission to any person without giving a reason.
d) On admission to the club, a new member will sign an agreement. The new member shall pay the initial lump-sum subscription (if applicable) and the first month's subscription. These sums will purchase for the new member a number of units calculated according to club rules and the unit value prevailing at the time of joining.
6. WITHDRAWAL OF MEMBERSHIP
a) A member shall cease to be a member of the club if he/she is in
contravention of Clause 15 of the constitution.
b) If a member should die or cease to be a member for any reason, the club shall pay to the member or to persons entitled by law an amount equal to the former member's share in the assets of the club as defined in Rule 11.
7. INITIAL LUMP-SUM SUBSCRIPTION
a) All members will pay a non refundable joining fee of £30.00
together with an initial monthly subscription which will rank on par with
monthly subscriptions in that it will purchase for that member an appropriate
number of units according to the unit value at the time of joining.
b) This fee may be varied at the club's annual general meeting or at a special general meeting.
8. SUBSCRIPTIONS
a) A subscription per calendar month shall be paid into the club's
bank/building society account by all members on or before the 1st day of
each month by means of a standing order from a bank, building society or
similar source.
b) Each member's subscription will purchase for that member an appropriate number of units according to the unit value declared at the monthly meeting preceding the date when the subscription was paid, subject to club brokerage if such should be in force at that time.
c) The treasurer shall notify members at their monthly meeting if any member is in arrears.
d) The monthly subscription and the level of the club brokerage may be varied at the club's annual general meeting or at a special general meeting.
9. CAPITAL ACCOUNT
a) The club's assets shall be valued monthly by the treasurer
and a report shall be presented at the next meeting. The value of investments
shall be based on 'middle' closing prices recorded in The Financial Times
or other reliable source of share price information.
b) The treasurer's monthly report shall include as a minimum: the current value of each of the club's investments together with a total value of such investments; a statement of unpaid accounts and cash in hand on the aforesaid day; the total value of the club's assets and the current unit value which shall be determined by dividing the total net asset value by the total number of units issued to members.
10. MEMBERS' ACCOUNTS
An account shall be kept for each member of the club showing: the total
investment made by each member by means of subscription, initial lump-sum
and/or additional purchases of units; the total of withdrawals made by
each member who has sold back units to the club; the total number of units
currently held by the member and the current value of his/her holding.
11. MEMBER LEAVING THE CLUB
a) Resignations of membership must be submitted in writing
to the chairperson, treasurer or secretary not less than seven days before
the monthly meeting at which the resignation is to take effect.
b) Members leaving the club, whether by resignation or as the result of termination of membership under Rule 6, shall sell back to the club their entire holding of units.
c) The amount to be paid to a member leaving the club shall be calculated by multiplying the total number of units held by the member by the unit value declared by the treasurer at the club meeting at which the resignation became effective, subject to deduction of club brokerage if such should be in force at that time and any legal fees incurred by the club in connection with the withdrawal of the member. Any surplus cash held to the member's credit would be added.
d) Payment to the member who has left the club shall be made as soon as possible and in any case within 90 days of the resignation becoming effective.
12. ADDITIONAL UNITS
The club may, at its discretion, allow individual members to purchase
additional units but it is implicitly understood that every member shall
have equal voting powers on all matters.
13. RUNNING COSTS
No member of the club shall be compensated for providing services to
the club. Expenses incurred in managing the club shall be recorded in the
club's cash account, which shall be funded from the club's subscription
and other income. The treasurer shall maintain a full and accurate record
of all expenditure to submit to the auditors annually.
14. BANKING
a) The club's bank/building society shall be determined
annually at the annual general meeting but may be changed by agreement
of a majority of members at a special general meeting called in accordance
with Rule 3.
b) All cheques drawn on the club's account(s) shall require any two of three authorised signatures. Where possible one of the signatories of cheques should be the chairperson. In the event of one authorised signatory being unavailable for an extended period, the officers of the club may authorise a further signatory for the period involved. All income shall be paid direct into the club's bank/building society account(s) except where members have approved an arrangement whereby their stockbroker retains funds from the sale of one or more investments pending the purchase of other investments.
c) The club's bank/building society shall be instructed not to grant any overdraft facilities to the club.
15. BROKERS
The club's brokers shall be instructed that
a) Only one or two named officers are authorised to buy or sell investments on behalf of the club.
b) No member is authorised to commit the club beyond the cash held by the club.
c) All cheques due to the club's account are to be made out to the club's name on non-transferable cheques.
16. COMMITMENTS
No club member shall make any commitment on behalf of the club or commit
club funds without written authorisation to do so.
17. AMENDMENTS OF RULES
The rules of the club may be amended or rescinded at a properly constituted
meeting of the club subject to agreement by at least 75% of members present.
18. MINUTES
Minutes of the club meetings shall be kept and shall be available for
inspection by any member of the club at any reasonable time.
19. DISPUTES
a) Any disputes as to the interpretation of these rules
shall be decided by the chairperson unless notice is properly served requesting
that the matter should be resolved by a special general meeting of club
members.
b) Any disputes relating to the valuation of a member's share in the assets of the club or his/her entitlement to that share shall be decided by a chartered accountant (to be appointed by the chairperson of the club) of at least seven years' standing whose certificate of decision shall be final. Fees incurred in obtaining this decision shall be paid by the party to the dispute against whom the decision is made or, in the case of this not being clear, the fees shall be shared between the club and the member or ex-member concerned.
20. WINDING UP
The club shall be wound up and all assets divided among members (after
payment of club expenses) in accordance with the number of units held by
each member if a resolution to that effect is passed by at least 75% of
the members at a special general meeting of the club.
21. TAX LIABILITY
Membership of the club implies acceptance of proportional tax liability
on trading profits made by the club in any tax year.
CONSTITUTION
of The Three Brooks Investment Club
This agreement is made this 18th day of April in the year of 2000 between the undersigned people as Founder members for the purpose of joint investment in stocks, shares, bonds, options, securities and investments of a like nature for their mutual benefit and interest.
1. The first principle of the club shall be that no member shall be deprived of his/her equitable share in the assets of the club.
2. Members of the club shall make regular contributions in such amounts and on such basis as is from time to time agreed or required by the rules.
3. Members shall be bound by the rules to be determined by members. Such rules may be varied by majority resolution at a properly convened general meeting but the rules shall not at any time contravene the principles of this constitution. The constitution cannot be altered without the agreement of 75% of the club for the time being.
4. The club shall deal solely with investments on behalf of its own members and shall neither deal on behalf of nor advise any persons other than its members in relation to investments of any kind. All its activities will be confined to the mutual benefit and interest of its members.
5. Club membership shall be restricted to a maximum of 20 people. New members shall only be admitted after being proposed and seconded by two existing members and there being no objection from any other member of the club.
6. No member shall assign, pledge, transfer, mortgage or sell any part of his/her interest in the club to another member or to anyone else except as permitted by the authorised procedure for selling back all or part of his/her interest to the club itself.
7. No member shall be compensated for services rendered to the club and no member shall bind or obligate the club or any member of the club to any matters outside the affairs of the club, and in respect of the club's affairs they shall only enter into agreements on the authority of a resolution properly passed by members.
8. The rules shall determine the procedure whereby a member may resign from the club and withdraw his/her equitable share of the club's assets but the maximum period to elapse between the date of resignation and the date of full repayment shall not exceed 90 days.
9. The club shall hold a general meeting once in every calendar year as its annual general meeting provided that every annual general meeting shall not be more than 15 months after the preceding annual general meeting. The club's first annual general meeting shall be within 15 months of its inauguration.
10. At each annual general meeting, the members shall elect a chairman, honorary treasurer and honorary secretary who will resign at the following annual general meeting but be subject to re-election. Members will also elect the club's auditors. If the auditors are members of the club they shall be at least two in number and shall not be executive officers of the club.
11. At each annual general meeting, a statement of account shall be given by the treasurer, together with the report of the auditors. The treasurer's report shall include a full record of the club's income and expenditure; a list of the club's assets together with its end-of-year valuation; also a capital account for each member showing his/her total contributions and withdrawals together with the current value of his/her holding.
12. Upon the death of any member the value of his/her equitable share in the club shall be paid to the executor of the estate in accordance with the club's rules for dealing with a member leaving the club.
13. The club's investments shall be registered through a nominee company provided by a reputable source such as a bank or stockbroker OR such investments shall be held in the names of trustees, of whom there shall be at least two, who will sign a Declaration of Trust and who shall be appointed by a resolution of a majority of club members.
14. The club shall open an account with a bank or building society and all club monies shall be paid into this account except in so far as monies from disposal of investments may be retained by the club's stockbroker pending reinvestment. At least two of the club's officers or other members nominated by the club for this purpose must sign all cheques and the bank/building society shall be instructed accordingly.
15. If any member should assign, charge or otherwise encumber his/her share in the club as prohibited by clause 6 of this agreement, he/she shall be expelled from the club. If any member shall become bankrupt, insane or otherwise incapable of taking part in the club's business, OR shall act in any manner inconsistent with the good faith observable between members, OR shall be guilty of any conduct which could injure the good name of the club, OR bring about its dissolution or fail to attend at least 25% of properly constituted meetings in any one financial year, it shall be lawful for other members to notify the offending member in writing that members shall consider his/her expulsion from the club. A member being issued with such a warning shall be given an opportunity to offer other members any explanation as he/she considers desirable.
16. A member shall be expelled if ALL other members present at a properly constituted meeting of the club support a resolution to that effect. A member who is expelled shall be notified in writing and shall have his/her equitable share of the club assets returned in accordance with the rules of the club.
IN WITNESS whereas the undersigned have set their hands
this 18th day of April in the year of 2000
NAME
SIGNATURE
WITNESSED BY