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What Is a Business Investment Agreement?
A business investment agreement is between an investor and the partner or director. This agreement signifies the partnership between the two parties who will work with each other. If one of the parties fails to commit to the agreements in the contract, it is considered a breach of contract.
How to Write a Business Investment Agreement?
When two parties decide to work with each other, they may need a business investment agreement to set rules and terms while working. If you want to be guided in writing small business investment contract or a business partnership investment contract of your business, hopefully, these steps can guide you.
1. Basic Information
The first step is to include the date of the agreement. After that add the names and addresses of both parties involved. If companies are involved, write down the companies' names and locations.
2. Articles of the Agreement
In this section, the articles are the terms discussed and put into the paper. The articles are written one at a time. Mostly what is inside the articles are the finances, how the company will use the investments, and how much will be the return of investment to the investor from his investments. You should also add what will happen to the investment contract if the company dissolves or falls into bankruptcy. You should talk to your lawyer about the document. According to Ryan Caldbeck of Forbes, "You may not care about all of your lawyer's points, but you should understand them."
3. Reporting and Control
Include if the investor has control over the rights in the company. Sometimes, companies give rights to investors to manage the company. In small businesses, investors have rights over the management of the business. Your simple business plan and investment contract should particularly write the reports to be read by the investors.
4. Payments in the Contract
Most of the time, there is a difference between a company with another company in this section. This will depend on how much is received in the investments.
If there are any, include the deliverables. Add the specific dates of when the deliverables will be delivered to your company.
Spell out the validity of the agreement. How will both parties terminate the contract? What are the grounds for the agreement contract? This section specifies how the agreement between the parties can end and how the two parties can terminate the agreement early.
Never accept investments from an irresponsible person even if the investments are at a good price.
8. List down Company Contacts
This part has the name, title, address, telephone number, fax number, email address, and preferred contact for both companies.
9. Choice of Law
Different states have different laws, so the partners should agree on which authority has the complete right in the agreement.
Both parties should sign the contract, together with two other witnesses. These witnesses should also sign a simple contract. After the signing, each respective party should have their own copies.