Legal Question in Business Law in California

Re: Investment or Loan or Asset Purchase Agreement?

Quite simply, it depends on what your intentions are. If you want to make him (or the business) a loan, then its repayable and may be unsecured or secured by something, including the business. If you mean to offer a cash infusion in return for a portion of ownership in the business, that's a slightly different transaction. It appears that you are getting a small percentage of ownership, which has its own set of concerns (e.g. you have no control and how do you get out later if you want to). You would be well advised to have a local attorney look over the transaction for you, especially since you mention it is with a friend. Not setting forth your expectations on each side clearly is how friendships can be damaged down the road.

Re: Investment or Loan or Asset Purchase Agreement?

One that prevents you from being scammed, which is what most of these kinds of offers are about. Creating an enforceable agreement is not difficult for an experienced attorney, as long as the business is genuine. You should have him or the company either pay your lawyer fees to create one, or pay your lawyer to review one they prepare. Feel free to contact me if interested in doing so.

Re: Investment or Loan or Asset Purchase Agreement?

I agree with Ms. Cowin. Additionally, there are tax consequences to taking an ownership interest. Your best bet is to contact an attorney knowledgeable in tax law to determine the best way to proceed. Feel free to contact me and I will do what I can to help.