What to do if I invested into a friend’s business a few months ago and now ge has stopped paying me on my investment?

UPDATED: Aug 12, 2012

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What to do if I invested into a friend’s business a few months ago and now ge has stopped paying me on my investment?

We also have a written contract. Can I sue for the money I invested?

Asked on August 12, 2012 under Business Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you have a written contract specifying the terms of the investment and what the friend had to pay you, you can sue to enforce  those terms and recover any amounts due you under the contract.

In the absence of a written contract, what you could recover would depend on whether this was an equity investment (i.e. you were given a piece of the business and its profit) or a loan (in which case you're entitled to repayment of the loan or any interest)--the two things are very different, and your rights (and the money you could recover) in the two situations are distinct. It is therefore impossible to answer the question in the abstract, without knowing what kind of an investment it was.

You should consult with an attorney. He or she can review the contract and advise you as to your rights under it; if the contract does not answer the question, he or she can evaluate the entire situation and how you made the investment, for what purpose, and advise you as to your rights and remedies.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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