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Buachaill, Barrister
Category: Law
Satisfied Customers: 11061
Experience:  Barrister 17 years experience
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I am on the Management and Development Team of a small private

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I am on the Management and Development Team of a small private golf club which has been losing members over the past few years, as have most clubs owned by its members. I understand we are classes as an unincorporated association. We understand that such organisations cannot borrow money.
However one of our members (trustee) wants to provide a backing sum of £100k at 2% interest pa, the whole amount secured against the 48 acres the course sits on. We have just formed a new Management Team who are anxious to take up this member's generous offer. Can we accept this internal offer from one of our trustees who has been a member for more than 30 years
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1. Dear *****, in order to be able to draw down this loan, this individual trustee who is advancing the money must resign as trustee as otherwise the loan would fall foul of fiduciary rules governing trustees. However, once the trustee has resigned his position as trustee, then the loan may go ahead whereby the £100k is advanced against the land owned by the club. Here, the then trustees would be on one side of the loan agreement and would provide the lands as security for the loan. The member would be on the other side of the transaction and would advance the monies. I would recommend that you get a solicitor to draw up a Loan & Security Agreement for you all. This is to ensure that there are no subsequent difficulties arising from the loan and that there is no issue concerning its terms.
Buachaill, Barrister
Category: Law
Satisfied Customers: 11061
Experience: Barrister 17 years experience
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