Any business organisation or working entity needs the right investors to put in capital into the business. The contract which is made between a parent company and an investor who invests money into the company is known as an investment contract. Any investment contract is used to describe the various conditions based on which the contract is signed mutually between the parties. Such contracts are legal documents and the violation of their terms can lead to legal implications. One must be careful about the drafting of these contracts as these are formally drafted documents and no mistakes are acceptable. For your convenience, we have a set of points which shall be useful in the framing of an investment contract.
- A formal tone must be used for framing any investment contract.
- The first part or section of an investment contract must be used to give the date of commencement of the contract. This is the date when the contract becomes legally viable. The termination date of length of the contract must also be mentioned.
- The second part of an investment contract must be used to give the details of the company and the investor. These details must include their names, titles, addresses, contract numbers, fax numbers and email Ids.
- It is important to mention the amount which is invested by the investor clearly and the various other details of investment.
- The most important part of any investment contract is the part which has the legal terms and conditions or promises and covenants. This part must be framed carefully in point wise manner. It must be noted that each term of the contract must be well detailed.
- The last part of an investment contract must be reserved for the signatures of the involved parties and for that of the witnesses.