Knowing how to make an investment contract is important knowledge for a business owner, it is going to talk about investment and make agreements with people that will run the business with him. Don’t be scared, you can learn about how to make a simple contract for investment here, and furthermore, we are also going to show a simple investment contract template for you to use. Let’s check it out!
What to Input On Simple Investment Contract
First thing first, you need to know what elements need to be input on your contract document. You need to make sure that no important information that is related to your business agreement is left behind. Here are the elements that you need to put on your simple investment contract:
The basic information will be about all the basic details of both parties participated in the agreement. This will include the name and addresses of each party and the contract number. There shall be no mistakes here to make sure all parties are responsible for the agreement.
Details of Investment Agreement
Write down all particles of agreement on the investment contract. This will include information on shares ownership, the amount of investment that the investor provides, the form of how the investment agreement works, and also the time and deadline the investment will be transferred. The process of investment transfer can also be informed on the simple investment contract but it isn’t a must.
The Expected ROI
The detail of when and how your investor will receive their Return of Investment (ROI) should also be stated on a simple investment contract template. The contract should also mention the condition that will be taken if any worst case happens during the period of the agreement. If this information is not stated, both parties will be unaware of any possible risks and that may lead to disadvantageous to any party participated.
Explanation of Reporting and Control
You also should explain the detail of the rights that participating parties have within the company or the project. Through this way, the hierarchy and bureaucracy of the company and investment agreement will be clear on how the company management will run after the investment contract signed.
Sign of The Contract
Every party that is participating in the investment contract must sign the contract in the presence of two witnesses. After that, the investment contract copies should be given to each party so they will have their own record on the agreement.
Simple Investment Contract Template
This investment contract (“Contract”) is made between:
Hereafter will be known as “First Party”.
Hereafter will be known as “Second Party”.
The investment contract is signed on [date]. Whereas the First Party and Second party agree to the following conditions:
- The Second Party will contribute [amount of money] to the First Party’s business. The First Party will be required to share specific information with The Second Party that is relevant to the investment agreement.
- The First Party will be required to present updates, benchmarks, and other data that are relevant to the investment to The Second Party on the following date:
- [Date], [explanation of progress]
- The money provided by The Second Party will be used for the following aspects: [aspects]. Any additional aspects must be discussed and approved by The Second Party before the funding can be allocated.
- For the investment, The Second Party will be in control of the following aspects: [aspects]. The fund will be transferred to [receiving bank account details]
- This investment contract is valid and legally binding from [date] to [date], or until The Second Party receives ROI of [amount]. In order of any violation of the contract within the period, [terms of termination]
This investment contract shall be enforced according to the laws of [Any party’s original state] and the regulation shall follow the laws of the said state.
(First Party’s Signature)
(Second Party’s Signature)