Downloadable tools

Partnership Agreement / Club Constitution

Investment clubs should have a written partnership agreement setting out the terms and conditions under which the club will operate. This agreement is the foundation of your club. It sets out the basic principles of the club, stating the reason the club was formed and the broad basis of its operations. Many investment clubs overseas also use the term Partnership Agreement, however sometimes this document may be referred to as the Club Constitution. Read further about the Partnership Agreement.

Agenda

View a pro forma agenda your club may wish to adopt for its regular meetings. Read more about the first investment club meeting and/or regular meetings

Keeping Account forms and instructions

The Unit Valuation accounting system is one method used by investment clubs to keep account.  A summary of the UVS appears on Valuing member holdings. The system depends upon the completion each month of four forms. This should become a simple and routine procedure; however they must be dealt with regularly and methodically. The four forms which provide the framework for the UVS are: Cash account, Members capital account, Investment record and the Monthly asset statement.

Share Appraisal form and instructions

The form is designed to help you assess the past performance, present value-for-money and future potential of a share. It sets out some of the factors you might want to take into account when researching potential investments.

Completing the form may help you to focus on some important factors when your club is considering making an investment. You might find some figures harder to track down than others; however the majority are readily available.

Taxation considerations

The taxation paper has been prepared by accounting firm Ernst & Young. It discusses in general terms the main tax issues that are relevant to an investment club where members are individual residents of Australia for tax purposes.  Some of the taxation implications of a member joining or leaving the club are covered in Investment clubs and tax.

The paper answers:

  • How is an investment club treated for tax purposes?
  • What does it mean to be treated as a partnership?
  • What is the treatment of income from investments made by investment clubs?
  • What is the tax treatment of the disposal of stock by investment clubs?
  • What happens when there is a change in the membership of an investment club holding stock on capital account?
  • Is the investment club membership itself a CGT asset?
  • Goods and Services Tax (GST)
  • Record Keeping
  • Compliance Obligations
  • Some useful tax questions and their answers

Download Taxation issues for investment clubs (PDF 79.0KB)

Disclaimers
Tax
a) The ASX cannot advise on individual circumstances. If you have any questions related to your personal tax liability, please consult a qualified tax adviser.  The comments are based on an investment club where members are individual residents of Australia for tax purposes.
Share appraisal form
a) the sole purpose of the Share Appraisal Form is to facilitate the presentation of factual information to assist investors in making their own assessments about investing in a company’s shares;
b) the information set out in the Share Appraisal Form is a guideline only, does not comprise an exhaustive set of criteria for assessing the performance of the company in question, should not be relied on as advice and does not purport to provide any recommendation or statement of opinion about financial products;
c) the Share Appraisal Form does not include all information that may be relevant to the investor in assessing the performance of the shares in question and there may be other factors that should be take into account by the investor before making any financial decisions;
d) investors should complete the Share Appraisal Form after having made the necessary enquiries and ASX does not accept any liability in connection with its contents;
e) investors should consider obtaining independent advice before making any financial decisions.
f) the Share Appraisal Form is a service that is provided by ASX free of charge.