Investment Club
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Thread: Investment Club

  1. #1
    Junior Member
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    Mar 2017
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    Investment Club

    Hi! Has anyone out there started up an investment club in Canada? Me and my friends are trying to start one, and there just doesn't seem to be a lot of resources out there. If anyone has done it, I would love to talk you and get some tips and info.

    Question 1. Should we register our club with the CRA? And if so, how do we do that?

    Many thanks!


  2. #2
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    Canadian Money Saver Mag has a list of share Clubs. looks to be 30-40.

  3. #3
    Junior Member
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    Nov 2012
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    The Ottawa Shareclub

    Quote Originally Posted by Oldroe View Post
    Canadian Money Saver Mag has a list of share Clubs. looks to be 30-40.
    The Ottawa Shareclub (in the moneysaver mag list) is not a stock trading club. Its' members share financial knowledge through monthly presentations by members and outside speakers. It is geared for DIY investors(with or without an advisor) of all levels. They do however, for educational purpose only, run a "fantasy portfolio" that was "crowd sourced" by its own members. You can find information through the website "money4retirement.ca"

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  5. #4
    Senior Member
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    My tenant started one with his friends from university and some of their wives.

    I am not aware of any requirement to register with CRA but haven't researched it.

    A lot will depend on how the cash will be handled. Some clubs are setup where there is a club trading account that the work to buy/sell is rotated through the members. This will require a special brokerage account agreement ... though it seem brokerages have this ready to go. I saw a link for TDDI for a club account as well as found this at Questrade. http://www.questrade.com/account/acc...nvestment_club. Other clubs met to discuss then recommend buy/sell but as they don't want to deal with dues, a common brokerage account or liquidating a share for a member leaving/having a new member join - each member does the buying/selling in their own brokerage account.

    First step is to make sure the membership will meet CRA's requirements, in case of any questions. The info is available at http://www.cra-arc.gc.ca/E/pub/tp/ic...ic73-13-e.html

    Second step - which is *critical* before buying anything or setting up the brokerage account is to get an agreement signed by all the members. The agreement should spell out how ownership is divided, what happens if someone wants to quit whether there is a replacement available or not, what happens if a member is slow paying dues, what the meeting schedule is, for stuff that has to be reacted to quickly delegation of authority/how to call a special meeting, requirements to change/amend the agreement etc. It should cover all the situations that would happen over the life of the club. RBC Direct Investing has a sample one at www.rbcdirectinvesting.com/pdf/ad0009e.pdf

    Only after the agreements are in place as well as the members have discussed who does what, what the time frames are, what their responsibilities are should an account be opened the money put into it.

    Here's some other info.
    http://en.allexperts.com/q/Canadian-...tment-Club.htm


    Cheers


    PS

    As most of the club my tenant setup studied computing, they found it effective to setup an online projected site for minutes, calendar showing meetings, financial statements etc.

  6. #5
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    Mar 2017
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    Business Number?

    Hey all! Thanks for the replies. We have already signed a mutual agreement and have started the process of opening a brokerage account.

    The question I am running into is this -- we need to open a bank account in the name of the club in order to fund our brokerage account. In order to open a bank account in the name of the club, as far as I can tell, we need to form a partnership, and acquire a business number. I'm wondering if this is absolutely necessary, or if there's some way to get around this requirement. If not, that's fine, we can get a business number. Just wondering if we really need to.

  7. #6
    Senior Member
    Join Date
    Mar 2016
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    447
    No AFAIK you should not need a business number. Banks open accounts all the time for clubs. There is a format for this and most banks will have type of account for this, sometimes called a community account.
    The club will have to have a set of bylaws.
    The bank will require a list of the officers of the company and a copy of the bylaw that says which officers can sign. ( usually by title, not name, ie any two of pres, sec, treasurer)
    The minutes of the meeting setting out the bylaw and the signing officers and a lust of officers will have to be presented to the bank signed by the Secretary, then all signing officers will have to attend with id.
    The actual procedure may vary slightly depending on bank. Most will have their own forms.
    Expect to be frustrated. You will likely be dealing with a junior employee and it is time consuming.
    It would be set up like any club like a local ball team unless you want to be more formal with a partnership agreement in which case you can register a trade or business name, or just run under the names of the partners ie
    Jones, Smith, Givens, Jenkens, Frost, Mctavish and Doofus.


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