Legal Question in Business Law in India

I am planning to invest amount "X" in private business

(it is partnership business and registered, it is not a private limited).

I will not own or involve in business but I will be expecting remuneration Y% of "X" per month for period of agreement(3-5 years).

After the agreement period is completed, I should be returned complete "X" amount.

How can I secure my money X?

1. Apartment from agreement on bond paper,

any additional securities required?

Please provide list of all.

2. Promissory Note is applicable here?

(as it is not loan, it is investment in business)

3. Post dated check can be collected?

Is it legal to collect the 3 years ahead post dated checks?

Any other solution?

Please guide me to secure my amount and ways to get it back in case of default.

Asked on 8/27/13, 2:36 am

2 Answers from Attorneys

dear Sir ..........

ur logic doesnt fit one one side you saying u will be getting remuneration means u will be showed as employee on the other side you will be making an investment in same company not possible legaly.........

for any details contact me at [email protected]

Read more
Answered on 8/27/13, 2:42 am

Fca Prashant Chavan Expert Edge LLP


Dear Sir / Madam,

You will be a deemed fixed term investment partner in the firm. Getting a fixed nominal salary in lieu of interest is perfectly valid. You can sign an Agreement on Rs. 100/- Stamp paper with the partners and insist that the firm gives you 36 PDC's for the fixed nominal salary per month and one more PDC for the repayment of the principal amount you invested in the firm. Although a risky proposition, it still remains a workable win-win solution.


Read more
Answered on 8/27/13, 3:16 am

Related Questions & Answers

More Business Law questions and answers in India