The most common question after a failed private investment is “can I get my money back?” The answer usually depends on documents signed — or not signed — before the money moved. Drawing on the disputes covered in our news section, here is the checklist we give clients.
Before you invest
- Define the relationship. Is this equity, a loan, a profit-share, or funds held on your behalf? Say so expressly.
- State the purpose of the funds and any restrictions on their use.
- Set reporting duties: monthly management accounts, bank statements and an annual reconciliation.
- Agree exit mechanics: put and call options, buy-back pricing and timelines.
- Add fiduciary and safeguard clauses where you want the option of criminal remedies for misuse.
- Take security where appropriate: guarantees, pledged shares or post-dated instruments drafted correctly.
- Choose your forum: onshore courts, DIFC, ADGM or arbitration.
After you invest
- Keep every transfer receipt and match it to the agreement.
- Record profit distributions — they can show the transaction was an investment.
- Raise concerns in writing early, and request a formal accounting before relationships break down.
Clear documentation is the difference between a recoverable claim and an expensive argument about what was intended.
V Legal’s M&A Legal Lab and Startup Legal Suite cover these documents end to end. Speak to us before you sign.
This article is general information, not legal advice. Every matter depends on its facts — contact us for advice on your situation.
