LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

QLD Long Distance Partnership Agreement but I Can't Travel - Options?

Discussion in 'Commercial Law Forum' started by d9ngle, 18 March 2015.

  1. d9ngle

    d9ngle Member

    Joined:
    18 March 2015
    Messages:
    2
    Likes Received:
    0
    We want to start a crowd-funding campaign for our startup but I'm not personally located in Australia, while my partner who handles manufacturing and distribution is over there. He handles the payments as well.

    How should I approach this partnership agreement given that I can't physically be present, and he's the one who's handling the bank account?

    I want to be able to authorizes to the bank account or Paypal withdrawals in the most possible convenient way , any solution?
     
  2. Sarah J

    Sarah J Well-Known Member

    Joined:
    16 July 2014
    Messages:
    1,314
    Likes Received:
    243
    Hi d9ngle,

    There are many start-ups where one of the co-founders are overseas.

    I don't exactly understand your concern here. Is the money being transferred (by crowd investors) into an Australian bank account? If so, is that currently accessed by both yourself and your partner?

    Are you concerned that your partner may improperly withdraw these funds or change the account so that you are unable to access the funding? If this is an account, you can set it up so that major withdrawals ($X at one time; or $X over Y period of time) require the consent of both partners. You will then need to negotiate with the bank as to what will constitute "consent". Withdrawals below that threshold can be made by either partner separately. But you and your partner should agree on an accounting method.

    Is this startup set up as a partnership or a company?
     
  3. d9ngle

    d9ngle Member

    Joined:
    18 March 2015
    Messages:
    2
    Likes Received:
    0
    Hi Sarah, Thanks for you reply

    Yes the money is being transferred into an Australian bank account (and PayPal account too) under the name and control of my partner.

    You're correct, that's exactly what I'm concerned about.

    Still, if the bank account is fully in his name, can we setup the withdrawal limit you're talking about?

    It's neither partnership nor a company yet, that's what I was hoping to find out here, easiest and cheapest way to make our partnership legal. For example if we can operate with my partner's bank account using a simple withdrawal "consent" letter then we don't really need to pay for more expensive solutions.
     
  4. Sarah J

    Sarah J Well-Known Member

    Joined:
    16 July 2014
    Messages:
    1,314
    Likes Received:
    243
    Why not set up a joint bank account with some sort of authorisation restriction where the money would be deposited into? And while the relationship with the partner is still good, transfer the money from his account to the joint account.

    If not, is the account under his name separate from his personal account? The cheapest way to make your partnership legal is to enter into a partnership agreement. There are very different legal (and personal) consequences for setting up a partnership or a corporation. You should take a look at the differences between the two, discuss with your partner, and figure out if you need to enter into a partnership agreement or set up a company (with article constitution and shareholders' agreement).
     
    Ivy likes this.

Share This Page

Loading...