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Directors offered stake in the company in return of loan is this valid
30-Mar-2023 (In Corporate Law)
A loan of Rs. 15 lakhs is given to a private limited company director for a period of 1 year. Company directors (two brothers) had offered a stake in the company instead of interest, with a personal guarantee to return the principle at the end of maturity. Apart from that, for the services offered to build an application, an additional % equity is agreed. In both the cases, equity % is agreed instead of Interest % or consulting fee. How should the termsheet be created for this? Is this voidable contract under Indian law?
The term sheet will be a comprehensive document and you can seek professional assistance from a lawyer or CA. A detailed analysis can be provided upon consultation.
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