668+ Lawyers are online 
Remedy in case investor of restaurant wants to recover money
12-Oct-2023 (In Startup Law)
Hi Im a 100% investor in a restaurant under a partnership firm, The co founders have taken money and shut the operation in 120 days and they are saying its a loss .How do i recover my money . No bank account opened,no GST paid, no books . As per clause , if they leave the business they have to pay me full principal with 10 % interest. They claim its a loss and they are not leaving . They are asking more capital for running the show
Dear client,
Kindly refer to your above query. At the outset, based on your query I assume that you have executed an Investment Agreement with the firm. Further, from your query it is not clear whether you infused your capital as newly inducted partner or you provided the capital as a loan to other partners; it is also not clear whether the partnership firm is registered or not.
If there is investment agreement then you can claim and recover the amount through the Investment Agreement. Hope you have mentioned certain milestones for the previous partners in the firm and you have an indemnity clause in your investment agreement. As you mentioned that there are no books of accounts, bank accounts and GST, and they started demand more money, then it may amount to misappropriation of the capital provided that you had not been involved in any utilization of the capital infused by you. You may claim your remedy and recovery before the court of law. You may first send a notice and asking the details of previous expenses.
If you have arbitration clause in your agreement subject to which you infused the capital then you can invoke arbitration; if the said is absence in the agreement then you can approach to the court of law as last resort.
Best regards,
Disclaimer: As to matters of law, I limit my response to the laws of India and the laws/rules/regulations of the state under whose jurisdiction the subject matters falls. Further, my response is limited to the facts presented by the client and laws in existence on the date of this response and at no subsequent time. This response is delivered to you in connection with the query raised/posted, and may not be utilized or quoted by you for any other purpose or relied upon by any other person or entity without prior consent. Further, this response does not create any attorney client relationship.
Kindly refer to your above query. At the outset, based on your query I assume that you have executed an Investment Agreement with the firm. Further, from your query it is not clear whether you infused your capital as newly inducted partner or you provided the capital as a loan to other partners; it is also not clear whether the partnership firm is registered or not.
If there is investment agreement then you can claim and recover the amount through the Investment Agreement. Hope you have mentioned certain milestones for the previous partners in the firm and you have an indemnity clause in your investment agreement. As you mentioned that there are no books of accounts, bank accounts and GST, and they started demand more money, then it may amount to misappropriation of the capital provided that you had not been involved in any utilization of the capital infused by you. You may claim your remedy and recovery before the court of law. You may first send a notice and asking the details of previous expenses.
If you have arbitration clause in your agreement subject to which you infused the capital then you can invoke arbitration; if the said is absence in the agreement then you can approach to the court of law as last resort.
Best regards,
Disclaimer: As to matters of law, I limit my response to the laws of India and the laws/rules/regulations of the state under whose jurisdiction the subject matters falls. Further, my response is limited to the facts presented by the client and laws in existence on the date of this response and at no subsequent time. This response is delivered to you in connection with the query raised/posted, and may not be utilized or quoted by you for any other purpose or relied upon by any other person or entity without prior consent. Further, this response does not create any attorney client relationship.
Helpful?
24+
24+
Adv. Sangeet Sindan
Bangalore | 25+ Answers
CONTACT NOW
Since it is a partnership, the partnership deed will determine your rights. Since books and bank account were not maintained, your partners may not be able to successfully prove that it was a loss and you may have a good chance to recover your money with interest. So do share the partnership deed so that you can understand your rights under the law.
Helpful?
25+
25+
Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
Connect with top Startup lawyers for your specific legal issue
No Comments! Be the first one to comment.
"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."
