How can one member of a club buy out another?
The whole subject of members "buying out" other members causes confusion for Treasurers. In the BetterInvesting accounting method, there is no such thing as "buying out" another member’s units. When a member withdraws, their units are liquidated for cash, shares of stock or some combination of the two. Any members who put in money at the same time, get units of their own. The club pays the withdrawing member and the other member(s) pays the club. Money does not pass directly between members.
In a withdrawal, units are cashed in at the value of the last valuation date. If another member deposits money on the same date, they will be buying new units at the same price at which the withdrawing member sold their units. If there are no fees being charged, a member making a payment, should get the same number of units. There is no requirement that anybody "buy out" the departing member. If the club has enough cash on hand the club can simply enter a Cash Withdrawal and pay off the departing member.
As such, ICLUBcentral does not endorse or support "buyouts" in our documentation, nor in our Club Accounting system. Our best recommendation is to keep things as simple as possible. If you collect extra money from members to raise cash to pay off a withdrawing member, enter that money as a regular payment on the date collected.
If this is not the date of the withdrawal, the members may acquire a different amount of units than the withdrawing member had. This simply reflects the fact that the unit value has changed. If the deposits are actually collected on the same date as the withdrawal, the unit price will still be the same. The members making the deposits will end up with the same amount of units, aside from the value of any withdrawal fee.