The Law and Your Business

Securing Capital

What are the legal considerations in getting contributions from others?

If you're borrowing money, you're retaining full ownership of the company. Once the loans are repaid, you have no further obligations to the lenders. If you have investors, on the other hand, you're giving them a slice of the pie. You don't have to repay what they put into the business, but you'll have to share the profits with them.

The decision to bring others into the business can limit the legal structures available to you. Under the law, investors who are actively involved in the business ( active investors) generally have a different status from investors who are putting up money but not taking part in how the business is run on a day-to-day basis ( passive investors).

>>What are some ways of securing capital?
>>How about using my home equity to get funds?
>>What are the legal considerations in getting loans from family and friends?
>>What is a promissory note?
>>What are some legal considerations in loans from financial institutions?
>>What about my spouse’s assets?
>>Are government loans available?
>>What about help for women and minorities?
>>What are the legal considerations in getting contributions from others?
>>Legally, what’s the difference between active investors and passive investors?
>>What if I want to have “passive" co-owners?


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State/Local Laws That Affect New Businesses | Home-based Businesses

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