Have Australian Law Questions? Ask a Lawyer Now.
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?
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?
Are you in Australia or the US?
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.
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.
What do you mean exactly by private?
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.
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.
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