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MShore Law
MShore Law, Attorney
Category: Business Law
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Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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I borrowed a loan of xx,xxx amount from a friend which i signed

Customer Question

I borrowed a loan of 60,000 amount from a friend which i signed a notarized letter that she will get half profits from the business entity, plus her 60,000 loan payed back in 18 months.

all i wanted was the money, not business partner. i let a friend sign contract to start up the business instead and he runs the show, but i have shares in the business.

i have been paying the loan shark back, told her i gambled out the money an i have no business but she wants to take me to court, she found out i still have a business but its under a friends name. can she sue the business for shares? i am willing to pay my debt back, and have been but she wants more because i have a business and i signed a paper saying she will have part profit from it.

how much liability is my business in?
Submitted: 3 years ago.
Category: Business Law
Expert:  Richard replied 3 years ago.

Good evening. Based on your narrative, she gets half the profits from the business, not half the business. She has no ownership and she does not get to interfere with the business. So, if she is interfering with your business, you should seek a restraining order against her.

 

The other approach you might want to investigate is whether this loan is usurious. The usury laws are very complex and beyond the scopy of this JA forum, but I would recommend you find a NY lawyer versed in usury law to determine if perhaps you have recourse through this route. In general, New York has a pretty straightforward usury law on its books at this time. The general usury limit is set at 16% in New York. This is imposed on all personal, consumer loans. In New York, if a personal loan agreement is crafted that includes an interest rate over and above the usury rate of 16%, there are two possible recourses. First, in many instances, when a personal loan has an interest rate above and beyond the usury cap, the loan agreement itself will be determined to be illegal and voided. On the other hand, there are instances in which a personal loan agreement with impermissible interest will be reformed to lower the interest rate to an appropriate level. The loan agreement will remain otherwise the same and enforceable.

There are also criminal statutes on the book governing usury violations in certain circumstances. In order to prosecuted under New York criminal law for usury, or loan sharking as it is more commonly known, there really does need to be a pattern of lending to individuals or consumers in violation of the law. In addition, Federal RICO statutes have been used to prosecute people in New York for serious violation of the usury statutes, for serious cases of loan sharking. Federal prosecutions occur in New York in instances in which a person loan agreement has been entered into that calls for the consumer to pay interest in the amount of twice the usury limit in the state, or in amount of 32% or more.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 3 years ago.
Relist: Inaccurate answer.


i borrowed from a friend 60,000 i told her i am trying to get into a business franchise and i was needing that required amount.



she only gave me the money under the following circumstances which we sign a contract she created which was notarized at a local bank



-she would be payed 1000 dollars every month from the business until the business is sold or bankrupt.



-the 60,000 would be charged 15 percent intrest and will be payed back in 18 months



-and she has half ownership of the business, and annual profits get half of the earnings.



After talking over and agreeing to the requirments of getting the money i signed the paper which i have a copy of and she gave me a check for the 60,000.



all i asked was for the money, i did not want any business partnership with the loan shark.



so i still used the money and bought over the franchise but i let my half brother sign the business paperwork as president, and legally through the S corporation my half brother established i have 95 percent shares of he business.



now i just told the loan shark i gambled out the money and i wasnt able to get into business anymore, i agreed to pay her back and have been on a regular basis. i am not trying to rip her off in any way.



if she gets a lawyer and trys to sue me for business profits, because i do have a business persoanlly i run everything



, but legally its under my half brothers name and social, but i have shares in the corporation. can she get any money, is my business in jeapordy?
Customer: replied 3 years ago.
Relist: Inaccurate answer.
Inaccurate answer. i borrowed from a friend 60,000 i told her i am trying to get into a business franchise and i was needing that required amount. she only gave me the money under the following circumstances which we sign a contract she created which was notarized at a local bank -she would be payed 1000 dollars every month from the business until the business is sold or bankrupt. -the 60,000 would be charged 15 percent intrest and will be payed back in 18 months -and she has half ownership of the business, and annual profits get half of the earnings. After talking over and agreeing to the requirments of getting the money i signed the paper which i have a copy of and she gave me a check for the 60,000. all i asked was for the money, i did not want any business partnership with the loan shark. so i still used the money and bought over the franchise but i let my half brother sign the business paperwork as president, and legally through the S corporation my half brother established i have 95 percent shares of he business. now i just told the loan shark i gambled out the money and i wasnt able to get into business anymore, i agreed to pay her back and have been on a regular basis. i am not trying to rip her off in any way. if she gets a lawyer and trys to sue me for business profits, because i do have a business persoanlly i run everything , but legally its under my half brothers name and social, but i have shares in the corporation. can she get any money, is my business in jeapordy?
Expert:  MShore Law replied 3 years ago.
Hello, it appears the other Expert has moved on. I am happy to assist you further. Please reply me when you return to continue.

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