you have to engage a local lawyer to protect your interests . dont part with your hard earned money unless legalities are clear
In LLP protecting interest of a Partner
Sir, I am base at Vadodara, Gujarat. Recently I got an offer from one of my friend toenetr into LLP. They are engaged in metal industry for more than 4 decades. They have got a job work in a company for 5yrs contract. They want me to join as a Financer in this partnership. * Contract is balloted to my friend's metal company based on their credentials and experience in this field. Contract is already signed and my friend is an authorised signatory to deal with company and communication address is his office address. * He said we will form a new LLP and we will get a new pan card and open a new account and we will give this account details to company for payment. ( he agreed to me one of the signing authority) Now my query is * Company don't even know me and this is our own mutual arrangement for carry out the contract. Suppose after six months my friend changes his mind and tell company to change payment account, then how I can protect my interest and Investment. Please answer my query as soon as possible. Regrds, Vikas
Asked 10 years ago in Business Law
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10 Answers
Do not join as a financer unless the partnership deed and other relevant documents are perused by your lawyer and he gives a finding as to the compliance of the legal framework.
Thank you all for your response. I would like to ask if you are in my position what you people will do or take authority to protect your interest. @ Mr. Ashish , They are ready to form a LLP with me, it's not an issue with them. My fear is that after 1 yr or so, if they change their mind and instruct company to make payment in another account, what I can do to prevent such situation from arising ?
Asked 10 years ago
if your partners want to misappropriate funds they will find ways of doing it . in case they do so you can file case of cheating , criminal breach of trust against them . you must insist on accounts being audited . all payments / receipts by cheques only . get all agreement vetted by lawyer
You must enter into a contract with them which specifies in no uncertain terms the rights and duties of you and the other partners as your rights in the event of a financial misdemeanor will be governed by such contract. This is what I will do.
After considering all expert's advice I have decided to go ahead with the partnership. We have made the draft of the partnership deed and we are going to register it. There are certain financial arrangement and understanding between us that we prefer not to mention in Partnership deed but do separate MOU for that. Now my query is 1) Is MOU legally binding in case of dispute between the Partners and do we need to register it ? ( or can we notarized it and it is legally valid ) 2) if MOU is not legally binding then can we opt for Agreement along with partnership deed and register it ? ( is it feasible ) Since I am the financier , I want each and every understanding in writing and to be legally valid. Please spare your some of your precious time and help me. Regards, Vikas
Asked 10 years ago
vikas when you are spending lakhs of rupees in investing in the project it is better you consult a local lawyer pay his consultation charges and then decide your next course of action. it is better you mention all the clauses in partnership deed itself .
an MoU is NOT designed to be legally binding. An MoU or as it is also called, a Letter of Intent or Heads of Agreement, are usually designed to note down the pertinent commercial terms for further review and are Subject to Contract. The idea is that they are some comfort to the parties as to what the main commercial agreement is going to be before the parties have got to the formal contract stage
The enforceability of the document will depend upon the exact language of the same. Labeling a document "MOU". "letter agreement", "letter of intent" will not, in and of itself, make a document binding or non binding.
Have you not engaged a lawyer for the purposes of drafting and registration? If you have engaged one then has he not answered these queries?
Whether or not a MOU is legally binding has to be decided with reference to the legal terminology incorporated therein and not the nomenclature of the document.
Consult a lawyer personally by paying his consultancy charges to get a clear picture.
I have already hired a lawyer an He has prepared the raw draft. he said me that notarized MOU is legally valid to which I have some doubts so I checked it online and got mixed information. That's why I seek your expert advice.
Asked 10 years ago
we have already advised you at length . your lawyer must have said MOU is binding based on clauses incorporated in it .
We have already advised you sufficiently. Go along with the advice of your lawyer now.
Thanks a ton for your help and guidence
Asked 10 years ago
thanks for your appreciation
Thank you for your appreciation.