• Investment agreement for a startup business

Hello Sir,

I would like to know the procedure for investment agreement, I have a plan to invest 24 lakh in one start up company (company already registered in Bangalore), total value of the company is expecting to be 8 crore.  

Agreement in 100 Rupee stamp duty paper is valid or need to be registered.  please let me know the details

Regards
Riju
Asked 10 days ago in Business Law from Oman
You can submit the document for adjudication to collector of stamps in Bangalore to determine proper stamp duty payable 

2) it is not necessary to register investment agreement 
Ajay Sethi
Advocate, Mumbai
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Hi
You can make an agreement with all the terms and conditions of your dealby ttaking care of your interests and needs.
It is not necessary this agreement has to be registered,but for the safety purpose you can Regis ter .the stamp duty will be minimal based on the amount mentioned
Thresiamma G. Mathew
Advocate, Mumbai
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Your query lacks relevant details to reply it properly.
Mere investment without structure of profit and loss is not a business venture.
You can though to protect your interest buy shares of the company with the investment money and become its director to ensure return.
Another option is money lending which is not legal unless you have money lending license.
Devajyoti Barman
Advocate, Kolkata
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1. You shall have to make lot of legal groundwork for making an investment of Rs.25 lakhs in a start up company.

2. Are you limiting your involvement with the Company as an investor only or will have a say in its management also.

3. You shall have to make a detailed agreement specifying all the clauses required i.e. profit sharing, authority in decision making, authority to examine the documents/records, no change of management without your written consent, assured return, procedure to withdraw the invested amount etc.

4. it will be prudent on your part to get the said agreement registered to avoid any future legal problem in this regard.
Krishna Kishore Ganguly
Advocate, Kolkata
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Whether you are an investor looking to put money into a startup, or an entrepreneur attempting to bring finances into your project, it is critical that you understand the terms and conditions of any investment.

 While legal advice is of paramount importance to ensure that any contract of investment is above board, you still need to know what is being asked of you so that you can decide whether such stipulations are acceptable or not.

 Furthermore, showing that you have knowledge of such things will generate more confidence in you as an investor or a startup businessperson during negotiations.

A common request from an investor is for a stock option – essentially a percentage of available shares in return for investment.

Most investors will ask for a share in a company as standard. Depending on the amount, this could be anything from 1% to a majority stake of 51% or over, but this depends entirely on how much is being invested against the value of the company overall.

Any agreement to be made in this regard may be vetted by an expert lawyer before signing it and have a legal opinion before hand including the need for registering the deed.

T Kalaiselvan
Advocate, Vellore
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