What to do if I invested into a friend’s business a few months ago and now ge has stopped paying me on my investment?
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What to do if I invested into a friend’s business a few months ago and now ge has stopped paying me on my investment?
We also have a written contract. Can I sue for the money I invested?
Asked on August 12, 2012 under Business Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you have a written contract specifying the terms of the investment and what the friend had to pay you, you can sue to enforce those terms and recover any amounts due you under the contract.
In the absence of a written contract, what you could recover would depend on whether this was an equity investment (i.e. you were given a piece of the business and its profit) or a loan (in which case you're entitled to repayment of the loan or any interest)--the two things are very different, and your rights (and the money you could recover) in the two situations are distinct. It is therefore impossible to answer the question in the abstract, without knowing what kind of an investment it was.
You should consult with an attorney. He or she can review the contract and advise you as to your rights under it; if the contract does not answer the question, he or she can evaluate the entire situation and how you made the investment, for what purpose, and advise you as to your rights and remedies.
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