Investment in small business sole trader

Dear Sir,
Unless you have blank postdated cheque or undated cheque then only there is some possibility of Recovery of such amount. If you file Money Recovery Suit on the basis of MoU it may go for years together and execution for recovery of the amount is also difficult.

Dear Client,
A person can extend his or her hand to help a needy person either through money or in kind. But in case such help is extended by lending money, a standalone MOU/Agreement between the parties shall not protect the interest of the lender unless it is supported by collateral security from the borrower, like a promissory note, or a post-dated cheque, or any other movable or immovable assets of equivalent amount, i.e, principal plus agreed interest, so that in case of default or failure to pay the borrowed money, the lender can recover the outstanding amount from the borrower by processing the collateral security. But private lending is impermissible under the law because, in India, moneylenders are governed by the Moneylenders Act, 1957, in different states. Any individual/organization engaged in a money lending business must hold a license from the appropriate authority, such as the RBI or the State Legislature. A money lending license is usually granted by the Revenue Department of the respective state government in compliance with the provisions of the Money Lenders Act and the state-specific rules. If any person or a group of persons is involved in trading of money lending or any other financial transaction without any license or permission of the concerned regulatory authority, then he/they may be booked under the Prevention of Money Laundering Act, 2002 (PMLA) which was enacted to fight against the criminal offense of legalizing the income/profits from an illegal source, once reported to the vigilance cell. The offender can face imprisonment for not less than three years, extending up to seven years. So, considering the potential risk and legal consequences, private lending is not recommended as it is impermissible under the law.