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Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 42629
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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Im in a partnership with my husband and want to limit

Customer Question

Im in a partnership with my husband and want to limit exposure to liability and my husband doesn't want his affairs public. What is the best business structure for us?
We offer a bespoke lobbying service that crafts and implements strategies for various interest groups and organisations.
Submitted: 1 year ago.
Category: Australia Law
Expert:  Leon replied 1 year ago.

Good Afternoon

My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advise but a guide to assist you.

Are you in partnership or are you considering going into partnership?

If you are in partnership, have you been splitting all profits 50/50 so far? If you are not certain you need to speak to your accountant. Is there a partnership agreement?

Customer: replied 1 year ago.
we have operated a successful professional and personal partnership for many years. Yes, we are married so funds are shared between us.
Expert:  Leon replied 1 year ago.

Good Afternoon

If you are in a 50/50 partnership then you are both exposed to the full debt.

So you are sole traders I take it and not in a company structure?

Customer: replied 1 year ago.
no, we are in a partnership and the moment? Is it best to stay that way or should we change to a LLC Limited liability company?
Expert:  Leon replied 1 year ago.

Are you in Australia or the US?

Customer: replied 1 year ago.
australiaI also don't want my husband bringing in any further shareholder without my consent ? is there any thing i can do to prevent this?
Expert:  Leon replied 1 year ago.

Good Afternoon

As a partnership he cannot bring in new partners unless you both agree.

If you set up a company then the business will have to be sold to the company or cease and start again. You will need to set up a detailed constitution that says without 100% of the shareholders agreeing there would not be any new shares sold.

If you do not want to be liable for any debts you do not become a director and you do not sign any guarantees.

This though gives your husband free reign on how he runs the company as he is the Director

It does separate your personal assets though and they are not at risk.

Customer: replied 1 year ago.
ok and what company type would be better? Proprietary or public?
Expert:  Leon replied 1 year ago.

Good Afternoon

For you it would be a private company Pty Ltd. You cannot have a public company unless you wish to float on the stock exchange and you need alot to get that done.

I hope this makes sense and is of assistance. If there is nothing further

thank you for using my services.

If I have missed anything, or you have any further questions please let me know

If there is anything else in the future please do not hesitate to ask.

Please do not forget to leave positive feedback.

Regards

Leon

Customer: replied 1 year ago.
great. So, if we set up a Pty Ltd company, does this means we can keep our affairs private?
Expert:  Leon replied 1 year ago.

Good Afternoon

What do you mean exactly by private?

Customer: replied 1 year ago.
sorry, i mean if we want to limit our exposure to liability is Pty Ltd the best option?
Expert:  Leon replied 1 year ago.

Yes you can limit your liabilities provided you do not sign personal guarantees for the company. 'If you sign personal guarantees then you will be exposed.

Customer: replied 1 year ago.
ok, also we were recently approached by a company wanting to do business with us and the managing director said he would sign a contract on their company's behalf for consultant lobbying services to the value of $1million but he didn't consult the rest of the board members as they had given instruction to the managing director to not do business with us.do we have the right to discuss what we can offer to the company before we agree andwould the contract be binding on the company if we choose not to do business with them ?
Expert:  Leon replied 1 year ago.

Good Afternoon

If the company doe not wish to speak with you they do not have to

If they are happy to hear from you and you put a proposal to them then you can.

I would be careful though because if you disclose too much you do not want them stealing your ideas. You should look at getting some confidentiality agreements signed by all the people that will be present.

Customer: replied 1 year ago.
Hello, i have another question. I am looking at setting up a Pty Ltd company with my husband. The question is nowWhat is the liability of the members? Is it better to be company limited by shares or limited by guarantee ?
Customer: replied 1 year ago.
My husband wants to limit exposure to liability
Expert:  Leon replied 1 year ago.

Good Morning

He will get that as the company is limited liability. But if he signs a personal guarantee then if the company cannot pay he will be liable for the whole of the debt.

Most banks will want a personal guarantee