Publish Date: 7 November 2022
Owning and investing in racehorses can be a very risky business, but it can be extremely lucrative for the few that succeed. Major races award substantial sums in prize money, and outstanding horses may remain valuable breeding stock long after their racing careers are over. However, owning a stable and running a horse racing business come at a high expense. That is why many are considering co-owning a racehorse.
Co-ownership is composed of two or more people. It is usually advised that co-ownership agreements be written to specify each owner’s duties and rights. Horse co-ownership agreements frequently provide that each co-owner is liable for the expense of insuring their individual part of the horse.
It could be valuable to consider these pointers if you’ve been considering how you might pull co-owning a horse. While the thought of doing business with a reputable company is always thrilling, taking the precautions necessary to guarantee your merry band of co-owners has trouble-free journeys in the future.
Choose the one in charge of your group. By all means, do things in a democratic way, through voting. It makes perfect sense to name a responsible individual among your friends to administer your co-ownership if you see the benefit in choosing one to share the bar tab. This is especially helpful when a large group of you are co-owning the property. When it comes to ensuring that your recently acquired racehorse is well taken care of, it is helpful to maintain your co-ownership impartial and objective by appointing a family member or one of your closest friends to make management choices.
Think about establishing a partnership or limited liability company (LLC). The word “responsibility” may always be used to deduce co-ownership elements. Keeping this in mind, you might consider creating an LLC or a partnership to make your co-ownership as formal as feasible. In addition to keeping your obligations clear and in writing, starting a business or partnership gives you a way to insulate yourself from liability in the case of any unanticipated unfortunate circumstances.
Involve your trainer in the Co-ownership. Involving your trainer in decision-making will improve your operation of a racehorse co-ownership arrangement more than anything else. Trainer-managed arrangements, in which your trainer is in control of managing training and maintenance choices, are common in co-ownership agreements. This is undoubtedly more appealing to inexperienced or less experienced co-owners and offers a perfect approach for new owners to efficiently handle their tasks at a beginner’s pace.
Regarding legality and registration, joint ownerships might include as few as two partners. Whether there are six or twelve co-owners, racehorses with co-ownership tend to run under names chosen by all members before registration. Naturally, any choice to jointly own a racehorse starts with an expectation that ownership costs would be distributed evenly. But there are other factors to think about than how to divide the expense. Beyond the initial investment, there are undoubtedly ongoing expenses, particularly those related to maintenance and training. Although the group may readily meet to discuss these issues, it is good to think about putting everything in writing. How much would it cost to prepare and keep your horse for a race.