• 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 7 years ago in Business Law

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8 Answers

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
94695 Answers
7528 Consultations

5.0 on 5.0

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
1642 Answers
212 Consultations

5.0 on 5.0

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
22816 Answers
488 Consultations

5.0 on 5.0

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
27219 Answers
726 Consultations

5.0 on 5.0

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
84896 Answers
2191 Consultations

5.0 on 5.0

electronic signatures are legally binding in India

2)digital signatures have to adhere to strict standards to be seen as enforceable.

3)Parties can use any form of electronic signature to create valid contracts and documents of any kind

4)The Information Technology Act, 2000 specifically confirms that contracts cannot be denied enforce ability merely because they are concluded electronically.

5) docu sign would be valid in india

Ajay Sethi
Advocate, Mumbai
94695 Answers
7528 Consultations

5.0 on 5.0

1. The validity of such digital signatures have not yet been established by enactment of Law.

2. Digitisation is still in preliminary stage in India for which it will be prudent on your part to get the said agreement executed and registered before the registrar by signing by hand.

Krishna Kishore Ganguly
Advocate, Kolkata
27219 Answers
726 Consultations

5.0 on 5.0

Electronic signatures, or eSignatures, are a broad category of methods for signing a document. A digital signature is a type of electronic signature that uses a specific technical implementation. Digital signature providers like DocuSign follow the PKI (Public Key Infrastructure) protocol.

Docu Sign electronic signatures are valid and legally binding around the world. In fact, they are more enforceable than traditional handwritten signatures.

Under Indian law, a written signature is not necessarily required for a valid contract - contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or in a physical paper document. The Information Technology Act, 2000 specifically confirms that contracts cannot be denied enforce-ability merely because they are concluded electronically. To prove a valid contract, parties sometimes have to present evidence in court. Leading digital transaction management solutions can provide electronic records that are admissible in evidence under Section 65B of the Evidence Act, 1872, to support the existence, authenticity and valid acceptance of a contract.

T Kalaiselvan
Advocate, Vellore
84896 Answers
2191 Consultations

5.0 on 5.0

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