BIM24020 | Meaning of trade: mutual trading and members clubs: introduction: characteristics of a mutual trade

For a trade to be a mutual trade there must be:

• complete identity, as a class, between the contributors to the mutual surplus and the participators in it (see BIM24105); and

• arrangements which ensure that the surplus ultimately finds its way back to the contributors and no arrangements for it to go to anybody else (see BIM24110); and

• a reasonable relationship between the amount a person contributes to the surplus and the amount distributed to them on winding up (see BIM24115); and

• arrangements that entitle the contributors to the common fund to control it (see BIM24120).