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we are a new start up company and have an investor willing

Customer Question
to invest. we want...
we are a new start up company and have an investor willing to invest. we want to offer them 20% of the gross profits and they want no involvement in the company. how do we write the investment contract?
Submitted: 5 years ago.Category: Business Law
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Answered in 10 minutes by:
6/1/2012
Business Lawyer: Dimitry K., Esq., Attorney replied 5 years ago
Dimitry K., Esq.
Category: Business Law
Satisfied Customers: 41,221
Experience: Run my own successful business/contract law practice.
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Thank you for your question.

There are two ways of writing the contract that would accomplish your goals. The first way would work is if you are a partnership. In a partnership you can designate each partner as either a "general" or a "limited" partner. A general partner (there can be several) can make legal decisions for the entity and steer it. A "limited" partner only provides funds, but does not otherwise participate in day-to-day decisions. That may be an easy way to accomplish what you are seeking.

An another approach may be to simply take on the debt on behalf of the company, and write in the contract that what the parties agreed to is that for the sum of (whatever amount provided), the parties hereby agree to provide start-up or investment capital and become creditors for the company.

Good luck.
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Customer reply replied 5 years ago
can you help us write the agreement?
Customer reply replied 5 years ago
we are a startup company and have an investor who wants 20% gross and no control or involvement in the company. we need help writing the agreement
Business Lawyer: Dimitry K., Esq., Attorney replied 5 years ago
My apologies but we cannot write the agreement for you, Robert. That would violate the terms of service for JustAnswer, as that would likely be considered actual representation.

I am sorry.
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