Legal Question in Business Law in India

M a professional Chef n have a financer who wants to finance me to open a small cafe with a capital of xyz amount. Initially (verbally) it was decided that we both will be a 50/50 partners with my soul management knowledge n its finance,but later she(financer) came down with a 40/60 ration,which I agreed as she is financing but than I have no legal obligation on the loss factor at the year ending P/L table.

We got a good place and finalized to go ahead with the deal. she beening the financer she make the rented agreement in her name with the shop owner which I did approve.Initially she was to float the xyz capital to help us run the business smoothly,but things did not start the way I expected,whenever I ask the money for initial operational purchases she arranges in bits n pieces,but then to I have started as per the money supplied by her.Now the bottom line is when I m asking her to make our partnership contract she is not ready saying that she first need me to completely give her my further plan only then she will proceed with the agreement.I m in a fix, as I have worked on the project n started n still have no legal paper in my hand as to how n where do I stand, as I feel the ball is in her court and I cannot do anything.Please help me and advice how can this be sorted out with mutual consent,as right now I have not got a single penny as my fixed remuneration and the Cafe has picked up,so may be she has a advantage point.kindly guide me with a solution..Thanks...Chef Kothari


Asked on 1/31/15, 1:53 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

31.01,2015

Dear Chef Kothari,

If your financier is taking all the business risks herself, you should concentrate working on the "taste buds" of your valued customers visiting the cafe, making it amply evident to them that you are the key person behind the success of the eatery business. Since your finacier partner has made the rent agreement with the shop owner in her name, she obviously has a vantage retaining control over the business and remains responsible for payments to the landlord / shop owner, culinary, cutlery, grocery, provisions and all other day to day business expenses. You should tell her that if she is serious about having you as her business partner, she should bring in more role clarity by registering a partnership deed, else you have no other choice but to ask her to simply pay and settle your dues till date for the efforts that you have put in the success of the business so far, and without wasting any more time, start your own eatery venture, since you are just wailing your time.

Regards,

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Answered on 1/31/15, 2:47 am


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