How to formalize an investor's entry into the company?

How to formalize an investor's entry into the company. So, you have agreed with an investor that they will come into your company. Accordingly, you need to clarify the amount of investment you will receive, the share in the company you are giving in exchange for that investment, the rights and obligations of the investor, and the rights and obligations of the company and any co-founders. This way you will have a preliminary agreement, the so-called term sheet, in which you can agree on all these terms even before the main agreement is signed. In addition, in the process of signing the investment agreement, you may be sharing certain information.

So you can protect yourself by signing an NDA, the so-called non-disclosure agreement, which will be signed both by the investor and by you, since the investor may also share certain confidential information with you. Non-disclosure agreements can be either one-way or mutual, when both parties share certain confidential information. After that you, of course, move on to the main stage, signing the investment agreement, in which you set out the amount of investment you receive, in exchange for which you transfer a share in the company; you set out the rights and obligations of the parties, as well as the mechanisms for returning the investment.

After you have signed this agreement, you will need to make changes in the database of the Ministry of Justice, or of another authorized body if your company is registered in other jurisdictions. After registration, you may need additional documents, for example, obtaining the consent of a spouse or spouses to the alienation of a share. These may also be agreements waiving the pre-emptive right of purchase. In addition, you will also need to amend the company's founding documents.