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Yacht Club Debenture


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#1 Lamps

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Posted 23 October 2009 - 10:45 AM

Hi, my club is located in Toronto and we are going to raise some funds by selling debentures to membership. I'm looking for a sample document to use to save time on the drafting of the paperwork. Anybody done this lately, and could you share your document(s)? Ideally an ontario based document but elsewhere in canada or the us would still give me something to use as a template.

pm me if you want to email me something. any other advice appreciated as well

thx in advance,

lamps

#2 Marie Laveau

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Posted 23 October 2009 - 12:36 PM

Try also Googling with search term "bond" which is the term the YC down here use

#3 DriverEd

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Posted 23 October 2009 - 04:49 PM

Probably doesn't apply to you, but our club is set up as a not for profit in the states and we sold bonds to the membership to finance a breakwater. IRS made us call all of the bonds and get a loan from a bank.

#4 Junkyard Dog

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Posted 23 October 2009 - 04:51 PM

Why not just hit the membership with an assessment?

#5 surf nazi

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Posted 23 October 2009 - 06:00 PM

Hi, my club is located in Toronto and we are going to raise some funds by selling debentures to membership. I'm looking for a sample document to use to save time on the drafting of the paperwork. Anybody done this lately, and could you share your document(s)? Ideally an ontario based document but elsewhere in canada or the us would still give me something to use as a template.

pm me if you want to email me something. any other advice appreciated as well

thx in advance,

lamps


So let me get this right. You're going to sell bonds to make money and are going to do this by getting some forms on Sailing Anarchy. While this may sound like an excellent plan to drunken retarded canucks, you may want to speak to an attorney familiar with these sorts of transactions before you start or you could just wait and speak to a criminal attorney after the mounties come and pick you up.

In case you're too drunk and retarded to recognize sarcasm, it is a seriously bad idea to sell negotiable instruments without complying with applicable laws. I will sat that a lot of yacht clubs used to do this and got away with it but it's a bad idea.

#6 John Ball

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Posted 23 October 2009 - 11:30 PM

We did this at the National YC (in Toronto) back in the 1980s to raise funds for the new club house and docks. Call the club manager for a contact.

John

#7 WHL

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Posted 24 October 2009 - 01:48 AM

Hi, my club is located in Toronto and we are going to raise some funds by selling debentures to membership. I'm looking for a sample document to use to save time on the drafting of the paperwork. Anybody done this lately, and could you share your document(s)? Ideally an ontario based document but elsewhere in canada or the us would still give me something to use as a template.

pm me if you want to email me something. any other advice appreciated as well

thx in advance,

lamps


So let me get this right. You're going to sell bonds to make money and are going to do this by getting some forms on Sailing Anarchy. While this may sound like an excellent plan to drunken retarded canucks, you may want to speak to an attorney familiar with these sorts of transactions before you start or you could just wait and speak to a criminal attorney after the mounties come and pick you up.

In case you're too drunk and retarded to recognize sarcasm, it is a seriously bad idea to sell negotiable instruments without complying with applicable laws. I will sat that a lot of yacht clubs used to do this and got away with it but it's a bad idea.


Gee thanks for stating the obvious about complying with applicable laws, but where does he suggest they are negotiable? Many YC's in other countries issue debentures. Some do so when you join. Frequently, there are terms which state that the club will "buy" back/repay you when you leave the club, some at the original face value, and some at the then current value for new members.

Actually it can be a good idea.

#8 jfdlaw

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Posted 24 October 2009 - 03:49 AM

Hi, my club is located in Toronto and we are going to raise some funds by selling debentures to membership. I'm looking for a sample document to use to save time on the drafting of the paperwork. Anybody done this lately, and could you share your document(s)? Ideally an ontario based document but elsewhere in canada or the us would still give me something to use as a template.

pm me if you want to email me something. any other advice appreciated as well

thx in advance,

lamps


So let me get this right. You're going to sell bonds to make money and are going to do this by getting some forms on Sailing Anarchy. While this may sound like an excellent plan to drunken retarded canucks, you may want to speak to an attorney familiar with these sorts of transactions before you start or you could just wait and speak to a criminal attorney after the mounties come and pick you up.

In case you're too drunk and retarded to recognize sarcasm, it is a seriously bad idea to sell negotiable instruments without complying with applicable laws. I will sat that a lot of yacht clubs used to do this and got away with it but it's a bad idea.


Gee thanks for stating the obvious about complying with applicable laws, but where does he suggest they are negotiable? Many YC's in other countries issue debentures. Some do so when you join. Frequently, there are terms which state that the club will "buy" back/repay you when you leave the club, some at the original face value, and some at the then current value for new members.

Actually it can be a good idea.


It can be a work, but you want to do it right. In the states you run into Securities laws, the same laws that govern "regular" or "commercial" bonds. We did it when we it wasn't practical to get a loan from a bank, but it cost us more than $5,000 in attorneys fees. We had to register the offering with the appropriate governmental agency.

We looked at it again a few years ago, but this time a commercial bank would extend us a loan. It was cheaper to just borrow it from a bank and avoid the attorneys fees and governmental scrutiny selling bonds. Plus when you borrow from members you find out how demanding they can be. Kind of like borrowing from your in laws, they always hold it over your head and demand special treatment.

Don't do this without a securities attorney to make sure you don't violate a bunch of laws.

#9 Gouvernail

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Posted 24 October 2009 - 04:10 AM

Down here in the US we are really good with that loaning money for buildings stuff.

I think it also has to do wirth sailing as I heard it is easiest to get a loan set up on a property if you mention something about using a red line.

#10 Laker

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Posted 24 October 2009 - 04:17 AM

Are not initiation fees a form of financial paper? You pay money. You join the club. You have a call on the assets of the club if it is dissolved. You cannot "sell" the initiation fee. There is certainly no problem with security regulators there.

You buy a debenture. You are given no indication of time valued return on the money. It may/may not be returned with/without interest as the club can afford. Not really a financial instrument in that it really holds no commercial value because no investor in their right mind would buy it, especially if the scope of the buyers was restricted to people attached to the club. It is not really a bond because you do not set a term of return on the paper and because it cannot be freely traded.

Issuing a guaranteed bond might be another problem........

#11 Lamps

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Posted 24 October 2009 - 02:32 PM

Why not just hit the membership with an assessment?


we could, but voluntary debenture sales allow for volutary funding, that way the funding isn't mandatory for each member. we have enough folks who support the initiative that we can raise the money without having an assessment

lamps

#12 Lamps

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Posted 24 October 2009 - 02:46 PM

Hi, my club is located in Toronto and we are going to raise some funds by selling debentures to membership. I'm looking for a sample document to use to save time on the drafting of the paperwork. Anybody done this lately, and could you share your document(s)? Ideally an ontario based document but elsewhere in canada or the us would still give me something to use as a template.

pm me if you want to email me something. any other advice appreciated as well

thx in advance,

lamps


So let me get this right. You're going to sell bonds to make money and are going to do this by getting some forms on Sailing Anarchy. While this may sound like an excellent plan to drunken retarded canucks, you may want to speak to an attorney familiar with these sorts of transactions before you start or you could just wait and speak to a criminal attorney after the mounties come and pick you up.

In case you're too drunk and retarded to recognize sarcasm, it is a seriously bad idea to sell negotiable instruments without complying with applicable laws. I will sat that a lot of yacht clubs used to do this and got away with it but it's a bad idea.


surf nazi is right - stupid canucks shouldn't worry their beer addled heads about fancy finance matters. Look at the cdn banking system for example - obviously we've got it all wrong, healthy banks owned by private citizens instead of govermnent bailed out banks with rotting balance sheets strewn with CMO'a and other crap - more saracsm but there's a little truth in every joke..

we'll of course have our resident securities lawyer's review the documents but a template will save volunteer time on drafting. the debentures will only bought by membership; they're not negotiable in the public forum

cheers,

Lamps

#13 class flag up

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Posted 24 October 2009 - 04:29 PM

i don't know canadian law, but if you were in the US, you'd need a lawyer to do the paperwork to ensure you're not running afoul of federal securities laws. in the US, instruments such as the type you want to use can be considered "securities" and would need to be registered with the state and federal government unless the document carefully spells out why they are exempt from registration.

i'm sure canada has similar requirements, so i would at least talk with a lawyer first before you cook up a homemade debenture document lest you run the risk of unknowingly breaking the securities laws

#14 Lamps

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Posted 24 October 2009 - 05:39 PM

i don't know canadian law, but if you were in the US, you'd need a lawyer to do the paperwork to ensure you're not running afoul of federal securities laws. in the US, instruments such as the type you want to use can be considered "securities" and would need to be registered with the state and federal government unless the document carefully spells out why they are exempt from registration.

i'm sure canada has similar requirements, so i would at least talk with a lawyer first before you cook up a homemade debenture document lest you run the risk of unknowingly breaking the securities laws


I think that hyou're right in that the key is to write it up so it exempts itself from the various regulations. Hoping to find a document that does that for ontario. Clubs here use this approach from time to time.

cheers,

Lamps

#15 Laker

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Posted 24 October 2009 - 09:18 PM

One of the reasons that everyone is not running to the lawyers is that in Canada we do not have one Securities and Exchance Commission, although it is being worked on. Each province cares for its own, and there are quite distinct differences across the provinces let alone from the US.

The old Vancouver Stock Exchange got a bad name for not restricting securities trading to the degree that the US does. It is a different system in that there is rigid regulation of things like banks, credit unions, stock brokers and such while it is very much caveat emptor on a sophisticated investor. A sophisticated investor is termed as someone investing over about $100,000 in a transaction. The idea is that if you don't do due diligence with that much at stake, you deserve what you get. On the other hand, the BC regulators should get tougher on fraud. I guess in the old mining days fraud was a capital crime.

Many of the friends, fools and family investments are done by standard forms and filings with a cursory glance by the lawyer if anything.

My experience with US companies is that you cannot sneeze without having to inform someone and have it passed by some bureaucrat. Just different ways of doing things.

#16 Lamps

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Posted 25 October 2009 - 01:53 PM

We did this at the National YC (in Toronto) back in the 1980s to raise funds for the new club house and docks. Call the club manager for a contact.

John

thanks, I sent them an email




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