Legal Question in Business Law in New York

investor/business owner agreement

I need an example or standard agreement of an Investor / Business Owner Agreement. We are starting a retail business and have completed a business plan that has been reviewed by an interested investor ready to go to the next step. We are interested in knowing the basic components of such an agreement such as terms of return on investment including time frame, access to the capital investment (ie. joint account, etc.), investor limits in business decision making, termination, terms of contract satisfaction and other questions we haven't thought of yet.

Thank you.


Asked on 5/25/05, 11:30 am

1 Answer from Attorneys
William Frenkel Frenkel Sukhman LLP

Re: investor/business owner agreement

If you are soliciting/accepting capital from outsiders (persons not currently occupying management positions in your company or the founding shareholders), you will need to comply with the federal and state securities regimes. Due to its complexity and a wealth of civil and criminal penalties for non-compliance, this area of law has no parallel to "home dentistry" and you should strongly consider having legal representation. In fact, most responsible investors would demand that you (as the issuer) be represented by a securities attorney.

Essentially, you would be looking at one of several types of "private placements," meaning that the transaction would not be deemed a "public offering of securities" and no registration would be necessary with SEC or state authorities, depending on the amount of investment, number of investors, residence of investors, type of solicitation/advertising, etc.

This reply is in the nature of general information, is not legal advice and should not be relied on as such.

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Answered on 5/25/05, 2:17 pm


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