There can be a lot of “what ifs” when it comes to investing, where an investor agreement comes into play. How many shares does each investor have? How are dividends distributed? Who is running the business? These are just a few of the questions that need to be answered. If there are disagreements between investors along the way, you can use an investor agreement to resolve them. This document can also offer a more equitable distribution of power, so that if you are a minority shareholder, you can use an investor agreement to protect your best interests. Other names for this document: Shareholders` Pact, Investment Agreement Start with a formal investment agreement by drafting an opening statement. This section should specify the purpose of the agreement and the parties involved in the transaction. Here, you write down the full name of the company and the investor and indicate the address of both parties. Also write the date the agreement was written. The opening statement is generally referred to as “This investment agreement that was concluded on (insertion date) between (insert the full name of each party) ” according to your investment agreement. Information on the parties involved is needed to make the agreement more valid. There is no doubt that a successful and developing business attracts investors, and having investors is a great thing for a company.
That is why it is essential to meet their expectations. According to an Article by Accion, one of the most important things that professional investors look for in a company is a clear investment structure, and part of it includes a proper investment contract. Therefore, before you make an investment transaction, you need a well-written investment agreement. What is it, what is such a document and why is it important? Find out all about this business agreement by reading this article. In a business environment, the investment relates to the acquisition or acquisition of an asset or element of a business for the purpose of earning revenue. Financially, the investment involves the purchase of bonds, shares or real estate. There are two main reasons why each type of business contract needs a signature to know the parties involved and to establish that both parties have read, understood and agreed on the content of the agreement.