Skip to main content

Gave $ to a friend as an investment to open a business. The money has been spent, but not on the business. Can I get it back?

Newburyport, MA |

I gave the money 6 months ago thinking she was close to opening but the business is not open and no anticipated open date. I have asked for receipts on how the money has been spent but have not received anything yet. We do have a signed agreement specifying the money is for the business.

Attorney Answers 8

  1. How much money is involved? Was the money loaned to the business or did you obtain an ownership interest in the business? You should discuss this with an attorney. You likely want her to provide you with an accounting as to what she did with the money. Depending on the circumstances, you may want her to enter into a written agreement spelling out your rights or, if she did in fact misapply the money, perhaps bring suit against her.

    My responding to your question does not create an attorney-client relationship. If you want to contact me, please call me at 617-426-7400 or email me at

  2. Since you have a signed agreement in place, consult an attorney to better understand the terms of the agreement and your rights under the agreement to determine whether there has been any breach of contract, and it sounds like there very well may be. It is hard to answer your question without knowing the terms of your agreement. Best of luck.

    The above is NOT legal advice, and is NOT intended to be legal advice. No Attorney-Client relationship is created through the above answer.

  3. The path of least resistance to getting your money back would be if the money was a loan with a specific payback date, irrespective of whether the money was used for the business. Because we don't have that information here, it is impossible to answer your question. The best thing is for you to do is consult with an attorney. If it's for a smaller amount, you can try small claims.

    This information is not intended to be legal advice and does not create an attorney-client privilege or relationship between Anjali Gupta Stevenson Law Office, LLC and the reader. This information is for general purposes.

  4. Sue

    henry lebensbaum esq 300 Brickstone Sq Ste 201 andover, ma -- (978) 749-3606.
    Criminal Law (all courts), Drunk Driving, Drugs, Violence, Sex Offenses, theft, SORB, Divorce Child Custody Alimony Child Support & Modification, Contempts & Paternity Juveniles Domestic Violence & Restraining Orders, Business Law, Personal Injury, Guardianship, Conservatorship & Estate Administration & Legal Malpractice. For these & other areas, contact me. Email sent may be copied intercepted or held by computers.

    Criminal Law (all misdemeanor & felonies in District and Superior Courts), Drunk Driving and Drug arrests, Sex Offenses, SORB, Crimes involving Violence or Theft, Domestic (Divorce, Child Custody, Alimony and Child Support) and Family Law (Modification, Contempts & Paternity), Juvenile Law, Domestic Violence and Restraining Orders, Business Law, Personal Injury claims, Probate Law (Guardianships, Conservatorships & Estate Administration) and Legal Malpractice. For these and other areas, contact me. NOTE: This preceding message DOES NOT create an attorney-client relationship. It is not a protected or confidential communication. The statements made herein are not to be interpreted as representations or warranties of any kind. No reliance should be placed on the statements made herein. It is recommended that the recipient(s) should undertake their own research to reach their own opinion. The writer does not accept professional responsibility on this matter. TO CREATE an attorney-client relationship REQUIRES a signed retainer/fee agreement along with a retainer fee that must be received by my office.

  5. You may not be the only person with such a complaint with this so-called business owner. Get an attorney to review your documents so that they can advise you further.

    You should also file a complaint with the Massachusetts Securities Division:

    The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.

  6. Since this is a friend you may not have a contract involved which is unfortunately too common. I hope you documented the payment at least by lending the money by check and writing in the memo loan so there is at least a record of it. From what you posted sounds like you have a pretty straight forward breach of contract case and will need to consult a lawyer about filing suit. Also might want to consider pursuing a civil theft claim which could entitle you to treble damages. Sounds like he just took the money and ran.

  7. Have an attorney look at the agreement. This isn't something that can be handled just by posting here. Starting a business often takes a lot longer than 6 months. However, consult an attorney to discuss the specifics of your situation.

  8. At least you avoided the trap of giving money to an acquaintance without a written agreement. Nonetheless, what that agreement specifies will determine the extent of your rights.

    The first thing I would suggest is that you write to your "friend" asking for the stutus of the business plan. If your documentation provides that the funds advanced are to be spent on the start up, you have the right to the receipts. Its hard to specify all of your other rights and remedies without reviewing the agreement between the two of you.

    In the absence of an answer to a written request, sent certified mail with a return receipt, you should seek counsel as suggested by other attorneys. Presumably the sum of money involved justifies counsel. Be sure to keep a copy of the letter which you send.

Criminal defense topics

Top tips from attorneys

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics