Legal agreements

[Tom760]

I've wondered for a while how legal agreements work. Today I was browsing a business startup book that called a legal agreement a "meeting of the minds" between two parties.

Can most anything reasonable be drafted up into a binding legal agreement?

I'm investigating information for starting up a business and wonder if an investment arrangement would work with some described profit sharing agreement instead of stock.

[akula]

I've wondered for a while how legal agreements work. Today I was browsing a business startup book that called a legal agreement a "meeting of the minds" between two parties.

Can most anything reasonable be drafted up into a binding legal agreement?

I'm investigating information for starting up a business and wonder if an investment arrangement would work with some described profit sharing agreement instead of stock.

hi, i'm a lawyer
yes, most things can be drafted into a binding agreement..provided that the parties have the capacity to authority/contract..plus a few other caveats

ummmm...no, profit sharing is largely disused as a feature for startup finance. the reason is that investors risk their capital for the purpose of capital gains on the sale of their shares...and without neither share ownership or a creditor status, the investors don't really have any enforceable rights against the company....as failure to pay a profit share might not be considered "debt" in the legal sense of the word

basically, without being a creditor or a shareholder, the investor has no rights. and likewise, a profit sharing contract most probably does not accrue the rights of neither a creditor or a shareholder.

[Tom760]

Thanks for replying. That's a bummer though as far as what you said with the profit sharing agreement. I guess it's looking like a C Corp with stocks is maybe the way to go for me.

Do you know if it would be doable to have an agreement about allowing stock to be bought back under certain conditions?

I'm thinking rather than trying to convince an investor about what I feel the stock would be worth, it might be easier / quicker to come up with conservative numbers. Then maybe I could get them to agree to something such as "X% of the stock can be purchased back by the company for a certain high price if done so within a specified time frame".

[akula]

ummmm...no.
look, to solve your problem you need convertible note
that's probably the best option..
pls search forum, look online for "venturehacks convertible" or ask me for clarification
cheerie o

Do you know if it would be doable to have an agreement about allowing stock to be bought back under certain conditions?