8. What are the services provided to investors?
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Communication/correspondence: at what intervals will reports on
the condition, progress and location of your horse(s) be sent?
Who will be responsible and via what mode (written or oral
communication) will this information be disseminated?
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Perks: as you may be paying a premium, will you be provided with
special racetrack accommodations on race days? Will you be given
access to the stable area? Are you welcome to visit your horse?
Will you be supplied with some sort of income or other financial
statement for your tax purposes?
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Licenses: according to the Association of Racing Commissioners
International Model Rules, each person who has a five percent
(5%) or more ownership or beneficial interest in a horse is
required to be licensed. Names of owners of less than five
percent (5%) must be disclosed in an affidavit filed by the
partnership which also states that these persons are not
presently ineligible for licensing or suspended in any racing
jurisdiction.
9. What are the conditions for transfer of shares and
dissolution of the partnership?
Many partnerships require investors first offer their shares to the
existing partners; however, determining a transfer or sale value can
be difficult. On occasion, the partnership will employ an expert to
determine this issue, but it is far more common to disburse
partnership interests at public auction.
As an investor, you may know how long you are committed to
participate in the investment. If you are involved in a racing
partnership, what happens when the horse retires from racing? Is the
horse to be maintained for breeding purposes? Will it be sold
publicly or privately?
Other Options
You may also wish to explore forming your own partnership or seek a
consultant, trainer, or bloodstock agent to match you with other
interested investors. Be certain to discuss these issues with your
partners.
Clearly, this option is more time-consuming; however, the advantages
may outweigh the disadvantages. For example, common goals and
criteria can be established and a plan developed from the outset
with which each partner feels most comfortable.
