Nishant Chaudhary (CEO, Founder) 23 June 2014

Accpeting investment from friends

Hi,

I am sorry if the category to post this is wrong but here goes.

5 of my friends and I are thinking about starting a software company. I will be the only one who will be working at the office , we will hire some employees. Total investment from their side is to be about 12 Lakhs So here's my question (I tried to find the answer online and even contacted few lawyers locally but no one had an answer) :-

All of them are employees of different companies and one of them is a govt employee. What is the best way to legally accept money from them so I can start working. I am okay with setting up a Pvt Ltd and making them shareholders, or showing the money as a loan. Can someone please guide me what I should do?

Thanks

Reply Follow

4 Replies

VIRAJ KADAM (Advocate Supreme Court of India) 23 June 2014

Dear friend

Your friends can always invest in your business without any fear. Just because they are working there is no bar from investing in a venture. Yes, there would be some restrictions from them becoming Directors in the company.

Regards

VIRAJ KADAM

Advocate, Supreme Court of India

virajkadam@gmail.com

1 Like

Rangee (Lawyer) 26 June 2014

Hi,

Government servant cannot invest in business with out prior consent and permission from government.

with regards other friends you may float pvt ltd company make them share holders or go partnership firm and make them sleeping partners.

Rangee

Regards

Rangee034@gmail.com

Rangee (Lawyer) 26 June 2014

Hi,

Government servant cannot invest in business with out prior consent and permission from government.

with regards other friends you may float pvt ltd company make them share holders or go for partnership firm and make them sleeping partners.

Rangee

Regards

Rangee034@gmail.com

Nishant Chaudhary (CEO, Founder) 27 June 2014

Hi,

Thanks for the reply, can you tell me if there is any other way of expecting investments legally than creating a Pvt Ltd Company? I have a service tax number as a proprietor.