QLD Transferring Money from Business Bank Account?

[Buddy80]

What happens to the money in a business bank account?

My business partner transferred all the money from business account into her personal account.

There is only the two of us in the business.

I left because of personal reasons. We don't have a contract drawn up on what happens if one decides to leave.

Is she allowed legally to withdraw the business money under commercial law?

 

[Rob Legat - SBPL]

This depends if you were actually a partnership. In Queensland this is governed by the Partnership Act 1891. It defines a partnership as being "the relation which subsists between persons carrying on a business in common with a view to profit."

Section 42 deals with the rights of partners to the "application of partnership property". This says every partner is entitled to have the property of the partnership (which includes the bank account):
- Applied towards the partnership's debts and liabilities;
- Then in payment to the business of what may be owed to it; and then
- Have any surplus applied to whatever is owed to the partners respectively.

You may apply to the court for an order winding up the business and affairs of the partnership firm.

Essentially this will mean an order that she pays you your fair share of the bank account proceeds after all the debts are covered.

 

[Buddy80]

Thank you Rob.

So now the latest is that my now ex business partner has completely closed the business account without my knowledge & transferred everything to her new business acc.

I am owed money still from a catering invoice for over $3000.

How can she legally do this?

What should I do now?...

P.S. She has remained in the business & gone as a sole operator.

 

[Rob Legat - SBPL]

She can't legally. However, if she has sole signatory ability on the bank account, it's quite easy to do in practical terms. I suggest you engage a litigation lawyer immediately to make contact with her and demand proper distribution of the partnership assets.

 

[Buddy80]

My ex business partner text messaged me an hour ago stating that she is honest & will be fair with what I'm entitled to.

I'm thinking if she is so honest & fair, the business account would have remained open so as to be transparent. Also who is she to take ownership of our business account and tell me what I am entitled to?

We were in a Partnership. Two people. Also there is the stock, etc., at the cafe that has been purchased & paid for, which she is now using for catering, etc., that I won't be paid for.

Feb 15 - the day I left, she transferred all money into her own personal account, before completely closing it today.