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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 91798
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Hi, I was asking to invest in a new business venture with

Resolved Question:

Hi, I was asking to invest in a new business venture ( restaurant) with someone, is there a particular form I can use. I really want to invest $ 5000.00 to start up the business but I'll ask a 15 %or 20 % of every profit for a certain period. so I do not want to do it verbally, I'd like to have a legal form that I can make the person sign before I issue the money.

 

regards,

Francklin

 

regards, Francklin

Submitted: 2 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 2 years ago.
You have to have a written contract, since this type of agreement is not enforceable without a written agreement pursuant to the statute of frauds. You can do this in multiple ways. First, you can put this in the company operating agreement if you want to be a member/shareholder in the business. Second, you can do this as a loan agreement with repayment to be 15%-25% of the profits for your specified period of time by having them sign a promissory note.

Here is a Sample Promissory Note and in the repayment terms you would specify the percentage of the profits and the specified amount of time you will collect those profits.

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Customer: replied 2 years ago.
is there any standard form to my situatrion as oppose to chose some provisions from the promissory note sample?
Expert:  Law Educator, Esq. replied 2 years ago.
No, and quite frankly these agreements are typically drafted by local attorneys based on the specific nature of each deal and you want them drafted by an attorney locally so that you can insure the note is enforceable in court in case they breach that agreement. The sample provided was just so you could get an idea what a promissory note would look like and perhaps get it started before finalizing it with a local attorney.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 91798
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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