How to create an investment Club
An investment Club is an association of natural persons (constituted legally as a community of goods) that gather a patrimony to manage it jointly and to learn the mechanisms of investment in stock exchange and the fundamentals of the economy.
From the above definition what I would like to emphasize is that the main goal of an investment club is not to earn money but to learn. The main goal of an investment Club is to train its partners in the financial markets. Therefore it is advisable that an investment club does not exceed the following limits:
-50 partners at the most.
-12,000 euros of managed patrimony.
Differences between a stock club and an investment club
There is No clear difference between the two. If we were to highlight some is that a stock Club is created under the figure of an association, which is not for profit and is usually more oriented to the university.
What advantages do you have when you belong to an investment Club?
Some of the advantages to be highlighted are the following:
-Obtain lower intermediation commissions. There are even stock exchange companies, as well as financial institutions that have exclusive rates for investment clubs depending on the volume of operations. They also tend to offer advisory services.
-it allows to diversify the risk.
-Courses, seminars or subscriptions can be accessed free of charge.
-You can register the Club in Madrid or Valencia bag, so that periodically you receive information about seminars, courses, etc.
Steps to create an investment club
The first thing is to find a group of people, who share their passion for the stock market, that they are clear that they do not join an investment Club to earn money and whose only goal is to share their knowledge and learn as much as possible.
As a general rule an investment club is instrumented as a community of goods with which, first of all we must constitute this community to obtain the C.I.F. with which we will be able to open accounts in a bank, company of Securities, etc.
The steps to form the community of goods would be as follows:
1. To raise the incorporation act of the investment Club, which shall be clearly expressed:
-which is a “community of goods “, according to article 392 of the Trade code
-The denomination of the Club
-The object of the Club
2. To elaborate the statutes that will serve to govern the Club, where it shall be noted:
-Relationship of the founding partners and their participation
-Election of the intermediary entity to which the deposit and administration of the securities to invest will be entrusted.
3. Submit to a delegation of finance the Bylaws and the Constitution act together with the forms 036 and 037 provided by the same.
Hacienda received the documentation and will facilitate the CIF of the indispensable investment club so that the club can carry out its activity.
As for the statutes there are many models. In this sense we must highlight the model provided by Bolsa Valencia. If we are going to register our club in the register of clubs that has this bag, we must adopt those statutes.
Governing bodies of an investment Club
There are several types of organ of Government based on the size of the Club. A basic flow chart would read as follows:
It is the supreme body of the club and all its members, make it up. You agree the investments and divestments, approves the accounts for the year and meets monthly. Go 2/3 of the members, or half if it is in second call, so they are valid.
The President, Treasurer and Secretary are the visible heads of each club. The statutes must set their mandates time so charges can be Rotary, which will allow the participation of all partners.
Functions of the President
It convenes and chairs the meetings of the Assembly. You must give approval to orders of purchase or sale agreed by the same that must attend to the financial intermediary. You can also, decisions of urgency together with the Treasurer. The President is the spokesman of the club and, in case of urgency, can unilaterally adopt a decision that protects the interests of its partners. You should always realize his performance at the first meeting after the fact.
Functions of the Treasurer
Leads accounting, controls on payments partners compliance and record entries and exits in the Cashbook. Also check the contributions of the partners become effective and notified how to evolve the investments that made the Club. By delegation from the President, it can transmit trading orders to the financial intermediary.
Functions of the Secretary
Sign the orders of purchase or sale agreed by the Assembly and takes the book of minutes of the meetings. In addition, it convenes meetings and takes note of the decisions taken on them, and even the interventions of each of the partners, if complicated discussions occur.
Choice of the financial intermediary
Once you have formed the community of goods and we have appointed representatives of the Club, we must choose the financial intermediary. We have two choices: we can work with a bench or box, or we can directly work with a member of the market, i.e. with a securities Agency.
What I recommend is to contact a regional of the autonomous region of residence box, especially if they are not very large, since these are often open to proposals such as sponsorships, negotiating commissions, advice, etc. Must not look both in regards to the commissions applied but the added services, i.e., if there is the possibility that staff of his Department of values involved in training seminars for partners, that there is a service of advice, etc.
If you are looking for is to have a low commissions then what we have to do is go to a member of market directly, since the banks and, apart from his Commission, affect the brokerage of the broker to work.
The most import both if we engaged contact with a Bank, box or values of society is the constant negotiation, not only at the time of opening the account, but a continuously.
Of operations taxation
There is no taxation for investment clubs. Gains and losses are taxed in the same way that individual investments for the purposes of the income tax, which will be distributed proportionately according to the participation that has each of the partners in the Club.