Advice on forming a company and investing in it

[nino54]

I wish to invest into a start up business as an "angel". The person is willing to set up a limited company with me and invest on level terms but he will driving the business forward from home and keep the stock on his premises too.
How should I go about it in terms of company capital, shares and shareholders agreement ?
I have never invested as an "Angel" before. I am willing to try as the initial injection of capital will be small but I fear that if I leave him to run things he could misappropriate the funds, rund down the company and leave to set up and run another business.
In other words: what safeguards could be put there to stop this (hypothetical) scenario from occurring ?
I treasure your advice
Thanks
Nino54

 

[nino54]

Just reproposing my message to your attention.
It does not seem to have produced a reply. I hope I have not posted it to the wrong part forum.
regards

 

[jim_price]

What are you trying to achieve? Do you want your investment to qualify for EIS?

A shareholders' agreement can offer significant legal protection, particularly in respect of company expenditure and non-compete/non-solicitation clauses, but ultitmately you would need to have the appetite to litigate.

You should speak with a professional adviser and discuss all relevant circumstances so that you can get some meaningful advice in context.

 

[David Griffiths]

but I fear that if I leave him to run things he could misappropriate the funds, rund down the company

There is one word of advice about investing with somebody that you think might misappropriate funds, and run the company down.

Don't