draft for loan funding to existing sole propritorship firm with fixed returns
2 months ago
draft for loan funding to existing sole propritorship firm with fixed returns
What type of legal agreement would hold Legal standing in The Indin courts for a person making investment in a running Sole proprietorship Firm Having GST number etc in the Entity of Sole Propritorship . Example
Terms are
The money has to be repayed in 24 months time frame
The money would have a fixed Income of say 5%% of the invested Amount irrespective of profit or loss.
Now the question is
As the money given for business whether interest can be asked or royalty or in what form? As taking interest cannot be paid to individual without lending licence .
The invester does not want to cover the risk of losses as he gave the investment to the business as it was profitabl business and sole proprietor was having assets in his name .
Now which form of agreement would give security of his principal amount along with his fixed income monthly /quarterly ?
Promisary note OR Businness Loan agreement or friendly agreement or Mou OR Promisary Note or Hundi ?
A.1) It depends on what type of business the proprietor company is having.
2) The business should be of some physical commodities like paper distributorship, onions etc. like it should not be off the market commodities like shares finance or further investments as the business should be physically visible to you.
3) Fixed income of 5% interest is not applicable in any courts maximum what you can ask for the interest is 24% per annum.
4) If you want such higher interest or something of that sort, it should be a sleeping partner agreement and your role as an investor in it in order to get fixed income.
5) In your case all the investment funds should be transferred from the investors account to the other persons current account of the proprietor and in the account which you are transferred. The amount of investment from the same account refund cheque should also be accepted along with the promissory note
Consulting with a lawyer is a wise decision when preparing legal documents, especially for financial matters such as loan agreements. A lawyer can ensure that the draft is legally sound, complies with relevant regulations, and protects your interests.
A personal loan agreement is a written contract between two parties, generally a borrower and a lender. It outlines how much money is being borrowed, the repayment schedule and what should be done if there's a dispute over paying it back. A business loan agreement typically includes a promissory note stating the amount you agree to borrow and the term and interest rate at which you must pay the money back. The promissory note is essentially your promise to pay back the funds you borrow from others. Although a promissory note is legally enforceable, it is less formal than a loan agreement and is suitable where smaller sums of money are involved.
Regarding surity and stay of execution
Recovering Loan given to a Friend
Credit card payment
Joint account Chaque with minor signature only
Cheque and pronote
