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BUSINESS IDEA
Dear Sir/Madam.
Thank you for your service.
We have opened a (PTY) LTD. We wish to start a distribution business of household items. We have no money. We are dead scared of taking a Bank loan.
We would like to approach people to lend us money. We wish to pay them back when the business gets strong. In return for their support we would like to share half of our net profit with them for as long as the company is in business. We would provide a solid agreement.
Is this legal?
Thank you for you help.
Regards
n
Sure it is legal. Maybe do some more research on “Angel investors”, etc..
The question you should ask yourself though, is whether your business is worth it to invest in for any potential investor. Unless you have some exceptional skills or strong foothold into your particular industry, which would justify some form of financial support for your business, I don’t see how simply registering a proprietary limited company, should qualify for an investment.
In other words, if I have money to invest, what should stop me from starting this business on my own – and subsequently owning 100% of the business?
My advise, start small, secure your market and grow your business. Once you have something to show, your will be in a much stronger position to acquire some funding at a later stage.