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[US] - Legal Document Needed for New Investor

Discussion in 'Business & Tax Advice' started by sumer720, Mar 26, 2015.

  1. sumer720

    sumer720 Newbie

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    Hi, I currently have a company that I've built from the ground up about a year ago. It's a local retail store in my city and just last week I've got an investor who is ready to invest lots of money into my business and to expand it. I've only business for about a year so I need some advice on what I should be looking out for now that I'll be sharing ownership of this company. Me and this investor will be 50/50 in my company. I want to get a legal document made that one, of course, says i'll be sharing ownership of my company on the guarantee that this investor will provide as much funds as the company needs. And I have a few other contingents I want to add as well.

    What other things should I consider added in the document or just things i should Look out for now that my company will be shared with this investor (who will mostly be silent, providing me the funds to expand as we both feel would be best)

    Any advice would be appreciated.
     
  2. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Dude - get a consultation from an attorney in your area. Odds are the first hour would be free anyway and if you have any amount of money on the line at all it makes less than zero sense to do this without legal counsel.

    Call around and find one that deals in contract law and you'll be sleeping much better at night than if you did this without one in your pocket.
     
    • Thanks Thanks x 1
  3. fxphil

    fxphil Senior Member

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    You need to do a few things including the free consultation. You will want to identify in the contract the split, the payment, mandatory prenup from SO of your biz partner, identifying each other's rolls and responsibilities. You will need a non compete agreements in the event the contract is broken or you buy one another out. You will need to identify a mediator in the event you have an argument and need mediation. Depending on what your business is you can do a license agreement or franchise (expensive) to get around him actually having control of your business but allowing them to use your name under restrictions. One more important thing is that YOU MUST make it so he can not dilute shares, sell them or create them without complete board (your signature) support. You will need the consultation to identify everything these are just a few. :)
     
    Last edited: Mar 26, 2015
  4. jpy295

    jpy295 BANNED BANNED

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    why are you asking this on a public forum? You need to consult a lawyer man...
     
  5. neu009

    neu009 Senior Member

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    Legal doc? did you maybe try an attorney?
    Honestly you mentioned a lot of money being involved etc. so why don't you invest some money here? Initial consultations are often cheap or free to determine whether to it is worthwhile to continue.
    good luck