Investment agreement (small company)
An investor putting money into a small company: amount and instrument, valuation or conversion, use of funds, investor rights and the conditions before money moves.
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Not yet reviewed by a lawyer. Check every line before it is signed.
How the paper begins
With Dastavo's sample details; the people and places are fictional. The words in blue are the ones you fill in.
INVESTMENT AGREEMENT
This Investment Agreement is made at Amarnagar on 12 October 2026 between Amar Spices Private Limited, a company within the meaning of the Companies Act, 2013 (CIN U00000PB2019PTC000000), having its registered office at Plot No. 21, Industrial Area, Amarnagar, Punjab, acting through its director Meera Sharma wife of Shri Kabir Sharma, aged about 41 years, resident of House No. 7, Basant Vihar, Amarnagar, Tehsil and District Amarnagar, Punjab (the "Company"); Gurdev Singh son of Shri Karnail Singh, aged about 48 years, resident of House No. 88, Model Town, Amarnagar, Tehsil and District Amarnagar, Punjab (the "Investor"); and Kabir Sharma son of Shri Dev Sharma, aged about 44 years, resident of House No. 7, Basant Vihar, Amarnagar, Tehsil …
WHEREAS the Company needs funds for the purposes set out below, and the Investor has agreed to invest in the Company on the terms of this agreement;
NOW THE PARTIES AGREE as follows:
1.That the Investor shall invest ₹15,00,000 (Rupees Fifteen Lakh only) in the Company (the "Investment"), and the Company shall issue to the Investor 1500 compulsorily convertible preference shares (the "Securities") of face value ₹10 each, at an issue price of ₹1,000 each, which values the Company at ₹1,50,00,000 (Rupees One Crore Fifty Lakh only) before the Investment.
The rest of the paper is in Dastavo.
What to bring
Papers to bring
- The company's certificate of incorporation, memorandum and articles, and its latest audited accounts
- The board and shareholders' resolutions for the issue (a special resolution for a private placement), and a registered valuer's report where the law needs one
- The investor's PAN, identity and address proof and bank details; for a company or LLP investor, its board resolution or authority letter
- For an investor living outside India: passport, overseas address proof and the bank's papers for the money sent from abroad
- For convertible notes: the company's startup recognition certificate
- Two witnesses, each with an identity proof
Where to go
Signed by a director for the company, the investor and the founder, if any, before two witnesses, usually on e-Stamp paper of the value the state fixes for an agreement. The company itself files the share issue (offer letter and return of allotment) with the Registrar of Companies.
Fee
The agreement's e-Stamp duty follows the state's schedule for agreements. The stamp duty on issuing the shares is a separate payment by the company (for demat shares it is collected through the depository); ask the company's adviser.
Good to know
- Pay only from the investor's own bank account by bank transfer or cheque, never in cash; the company must allot within 60 days of receiving the money or refund it with interest as the Companies Act requires.
- Convertible notes can be issued only by a startup recognised by the government, and only for the minimum amount the rules fix for each investor in one tranche.
- For an investor outside India, the company also reports the investment to the RBI through its bank within the time the FEMA rules set.
- The agreement promises no return; the investor should take independent tax and legal advice.
Papers and fees can change. Check with the office before you go. Guidance only, not yet reviewed by a lawyer.
Stamp paper
Deeds and agreements carry stamp duty that depends on the state, the document and its value; some must be registered with the Sub-Registrar. Check the current duty and registration rules before printing on stamp paper.