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Capital Investment Fund Agreement

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					This Agreement Establishing a Capital Investment Fund provides for the pooling of
resources to invest in a project, person, business or institution. It lists essential
information including the names of the partners, the original contributions of the
partners, restrictions on partners, and procedures for admitting new partners or
withdrawing from the partnership. The document contains both standard clauses and
opportunities for the use of optional terms and conditions making it fully customizable to
fit the specific needs of the partners. This agreement should be used by a group of
partners establishing an investment fund.
                    Agreement Establishing a Capital Investment Fund

THIS AGREEMENT ESTABLISHING A CAPITAL INVESTMENT FUND (the “Agreement”)
made        _____________________         [Instructions:      Insert      date],      among
___________________________ [Instructions: Insert name and address for first partner]
(“Partner 1”), ___________________________ [Instructions: Insert name and address for
second partner] (“Partner 2”), ___________________________ [Instructions: Insert name
and address for third partner] (“Partner 3”), ___________________________ [Instructions:
Insert     name    and    address     for     fourth     partner]    (“Partner   4”),   and
___________________________ [Instructions: Insert name and address for fifth partner]
(“Partner 5”).

[Comment: User may edit this Agreement to reduce or increase the number of partners in
the capital investment fund]

1. Name and business. The parties hereby form a capital investment fund under the name of
   __________________ [Instructions: Insert name of investment fund] for the purpose of
   ____________________________________ [Instructions: Insert purpose for the fund].

2. Term. The partnership shall begin on __________________ [Instructions: Insert date], and
   shall continue until __________________ [Instructions: Insert date], and thereafter from
   year to year until terminated as hereinafter provided.

3. Capital. The partners have made the following original contributions to the capital of the
   partnership:

              Partner 1: $__________________

              Partner 2: $__________________

              Partner 3: $__________________

              Partner 4: $__________________

              Partner 5: $__________________

    [Comment:       Insert     the     original     contributions     of     each     partner.]

    The partners may make additional contributions to the capital of the partnership on the date
    of each regular meeting. At no time, however, may the capital account of any single partner
    exceed ____ (       ) [thirty-five (35)] [Comment: This number is an example and not
    provided for by law, but can be any number the user chooses] percent of the total capital
    accounts of all partners.

4. Executive secretary. Once every ____ (         ) [six (6)] [Comment: This number is not
    provided for by law, but can be any number the user chooses] months an Executive
    Secretary of the partnership shall be elected by the vote of partners who own a majority in
    amount of the total capital accounts of all partners. The Executive Secretary shall have
    physical possession of the books and records of the partnership, shall give such notices to the
    partners as may, from time to time, be required or deemed advisable, and shall perform the
    necessary ministerial functions of the partnership.

5. Meetings. Regular meetings of the partnership shall be held at least ____ ( ) [two (2)]
   [Comment: This number is not provided for by law, but can be any number the user
   chooses] times each year, or more often as determined by the partnership. Notice of the time
   and place of each regular meeting shall be given in writing by the Executive Secretary to
   each partner at least one week before such meeting. Special meetings may be called by the
   Executive Secretary on such notice as he may determine.

6. Capital accounts. An individual capital account shall be maintained for each partner. Each
   partner's capital account shall be determined and maintained throughout the term of the
   partnership in accordance with the requirements of Section 704(b) of the Internal Revenue
   Code of 1986, or its counterpart in any subsequently enacted Internal Revenue Code (the
   “Code”), and any of the Treasury Regulations (the “Regulations”) promulgated from time to
   time thereunder. Subject to the aforesaid, the capital account shall consist of his original
   capital contribution: (a) increased by his additional contributions to capital and by his share
   of partnership profits transferred to capital; (b) decreased by his share of partnership losses
   and by distributions to him in reduction of his capital; and (c) increased or decreased (as the
   case may be) on any valuation date for any increase or decrease in the net value of
   partnership assets. The net value of partnership assets shall be determined as of a date ____
   ( ) [five (5)] days prior to each regular meeting (or if such date is not a business day then the
   first business day immediately prior thereto), such date to be known as a valuation date.
   Adjustments to the capital accounts of each partner shall be made regularly as at the end of
   each valuation date on the basis of the ratios of the respective capital accounts on that date.

7. Profit and loss. The net profits or net losses of the partnership shall be allocated or charged to
   the partners, as of each valuation date, in the ratios of their respective capital accounts on that
   date. Any net balance of partnership profits not transferred to a partner's capital account may
   be withdrawn by such partner.

8. Books and records. Proper accounting records of all partnership business shall be kept and
   shall be open to inspection of any of the partners, or their designee or legal representative, at
   all reasonable times. The partnership shall maintain its accounting records, and shall report
   for income tax purposes, on the cash basis of accounting. At the end of each calendar year, a
   complete accounting of the affairs of the partnership shall be furnished to each partner,
   together with such appropriate information as may be required by each partner for the
   purpose of preparing his income tax return for that year.

9. Management. Each partner shall have a voice in the management of the partnership business.
   Except as otherwise provided in this Agreement, all decisions relating to the partnership
   business shall be made by a vote of partners who own a majority in amount of the total


© Copyright 2013 Docstoc Inc.                                                                       3
    capital accounts of all partners. No partner shall receive any compensation for services
    rendered to the partnership.

    [Comment: User may edit this section to reflect the desired management arrangement of
    the user]

10. Custody of securities. Securities and bonds owned by the partnership and registered in its
    name shall be in the primary custody of the Executive Secretary. Securities and bonds owned
    by the partnership but not registered in its name shall be kept in the custody of the brokerage
    firm through which they were purchased.

11. Restriction on partners. No partner, without the consent of all other partners, shall:

    A. Sell, assign, create a security interest in, or pledge his interest in the partnership;

    B. Borrow or lend money on behalf of the partnership, or purchase any security or bond
       except for cash in full;

    C. Assign, transfer, pledge, compromise, or release any claim of the partnership except for
       full payment, or arbitrate, or consent to the arbitration of any of its disputes or
       controversies;

    D. Use the name, credit, or property of the partnership for any purpose other than a proper
       partnership purpose; or

    E. Do not act detrimental to the partnership business or which would make it impossible to
       carry on that business.

12. Additional partners. With the unanimous consent of all partners, additional persons may be
    admitted as partners effective as of the date of a regular meeting of the partnership.

13. Withdrawal. Any partner may withdraw from the partnership upon giving written notice to
    all other partners, but such withdrawal shall not be effective until the first valuation date
    following the giving of such notice, unless an earlier effective date is established by
    agreement between the withdrawing partner and the other partners. Within ____ ( ) [fifteen
    (15)] [Comment: This number is not provided for by law, but can be any number the
    user chooses] days after the effective date of withdrawal, the other partners shall have the
    option to purchase the capital account of the withdrawing partner by paying the withdrawing
    partner in cash the amount of his capital account as of the effective date of withdrawal, less
    all necessary expenses, not exceeding ____ ( ) [two (2)] [Comment: This number is not
    provided for by law, but can be any number the user chooses] percent of the amount of
    such capital account, incurred in connection with such withdrawal. If the other partners do
    not exercise such option to purchase, the partnership shall be required to purchase, for cash,
    the interest of the withdrawing partner at the price established as of the applicable valuation
    date. If such interest is not purchased for any reason, the partnership shall be terminated and
    liquidated in accordance with the provisions of the “Liquidation” section of this Agreement.


© Copyright 2013 Docstoc Inc.                                                                     4
14. Death. The interest of a partner in the partnership shall be deemed to have been withdrawn
    on the first valuation date following his death. Within ____ ( ) [fifteen (15)] [Comment:
    This number is not provided for by law, but can be any number the user chooses] days
    after such withdrawal, the other partners shall have the option on behalf of the partnership or
    on their own proportionate behalf to purchase the capital account of the deceased partner by
    setting apart for the estate of the deceased partner in cash the amount of his capital account as
    of the effective date of withdrawal, less all necessary expenses, not exceeding ____ ( ) [five
    (5)] [Comment: This number is not provided for by law, but can be any number the user
    chooses] percent of the amount of such capital account, incurred in connection with such
    withdrawal. The cash so set apart shall be paid to the estate of the deceased partner as soon as
    a representative thereof is duly qualified. If the partnership or the other partners do not
    exercise such option to purchase, the partnership shall be terminated and liquidated in
    accordance           with         the        provisions         of       this        Agreement.

15. Continuation. If the capital account of a withdrawing or deceased partner is purchased
    pursuant to the exercise of an option to purchase due to withdrawal or death under this
    Agreement, the partnership business shall not terminate, but shall continue, as of the effective
    date of withdrawal, after an appropriate adjustment is made in the capital accounts of the
    remaining or surviving partners, as the case may be, in accordance with the provisions of this
    Agreement.

16. Liquidation. The partnership may be dissolved and terminated upon the vote or agreement of
    partners who own a majority in amount of the total capital accounts of all partners, and shall
    be dissolved and terminated upon the failure of the remaining or surviving partners to
    exercise an option to purchase granted under this Agreement and failure of the partnership to
    purchase such interest, as the case may be. Upon any such dissolution and termination, the
    partners shall promptly liquidate the affairs of the partnership by paying all debts and
    liabilities of the partnership and by distributing all remaining assets, in cash or in kind or
    partly in cash and partly in kind, to the partners or their representatives.

    The proceeds of such liquidation shall be applied in the following order of priority:

    A. to the payment of any debts and liabilities of the partnership;

    B. to the setting up of any reserve which the partners shall reasonably deem necessary to
       provide for any contingent or unforeseen liabilities or obligations of the partnership. At
       the expiration of such period of time as the partners shall deem advisable, the balance of
       such reserve remaining after the payment of such contingency shall be di
				
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Description: This Agreement Establishing a Capital Investment Fund provides for the pooling of resources to invest in a project, person, business or institution. It lists essential information including the names of the partners, the original contributions of the partners, restrictions on partners, and procedures for admitting new partners or withdrawing from the partnership. The document contains both standard clauses and opportunities for the use of optional terms and conditions making it fully customizable to fit the specific needs of the partners. This agreement should be used by a group of partners establishing an investment fund.
This document is also part of a package Essential Documents to Start a Business 86 Documents Included