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    2 Replies Latest reply on Jun 5, 2008 10:50 AM by Lighthouse24

    Assignment of Contract payments

    disk24 Newbie

      My partner and I have a contract that we would like to assign all funds to a bank account. I would like to know how we can set this up so that we both have to approve all transactions regarding the money and payments received. Just so that he or I can't remove funds from the account without the others knowledge.

      Is this possible for a bank to set up and how do I do it?

        • Re: Assignment of Contract payments
          Bridge Navigator

          Talk to your bank. You should be able to set it up for dual signature authority.


          You always run the risk of a teller releasing funds to just one of you at the window regardless of what the account says. You also might want to consider shutting down any access to any electronic banking functions as these can usually be set up by any account holder.


          When you say all funds, are you talking about your operating account or some other type of company money? If it is not money that is used on a regular basis, you could look to set up an escrow account. A bank will charge for this service but it will ensure that no money is released without both of you agreeing to it. This set-up would not be practical for your operating account.



          It sounds like there might be some trust issues between you and you partner which you might also want to address. Is this a new business, or has it been ongoing for some time?
          • Re: Assignment of Contract payments
            Lighthouse24 Ranger

            As indicated above, yes, it's possible. Some banks will not issue debit cards or allow electronic transfers from dual signature commerical accounts (so you lose a lot of convenience), while others require you to waive the dual signature restriction if you want those features (which defeats the purpose). A "compromise" option, if available, is to allow checks, debits, and transfers by one person up to a certain dollar limit, but require checks with both signatures for amounts above that. The point is, there are several options, so shop around for the arrangement you need. There are certain industries that often bring very different people into business partnerships (live music, import/export), and it's common for partners to want to protect their financial interests in this way. Explain your business and your objectives, and a good commercial banker should be able to find the ideal product for you.

            In any case, be sure that all checks printed for the account are dual signature checks, and state that both signatures are always required on the check (or required for amounts over whatever you decide). Also read the signature form that shows what the bank is agreeing to be bound by, and ask your bank officer "what if" questions to be sure you're creating the functionality and protection you need.

            Hope this helps. Best wishes.