Legal Question in Business Law in India

My brother has a business of authorised stockist like, ITC, NESTLE etc. It is proprietorship concern. He has a bank loan of Rs.40,00000/- to run the business. Now two person want to join his business by infusing a capital of Rs.50,00000/- of which 40,00000/- to make good the Bank Loan and extra 10,00000/- as fresh capital for joining the business. Pl advise regarding the modalities of infusing this 50,00000/- and other conditions to safe guard the interest of my brother in the business.

Asked on 3/06/10, 4:45 am

1 Answer from Attorneys

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Hi,

the best way under such situation would be to convert the proprietorship concern into a partner ship concern/ LLP-Limited liability Partnership or a pvt or limited company. Partnership Deed under partnerships and MOA /AOA would give sufficient security to the interest of your brother in his business.

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Answered on 3/16/10, 1:26 am

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