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Victor (Manager)     26 June 2025

Payment to co director for a business and agreement

Dear experts

While dealing on a Business with one of the reputed co in Hyderabad ,the selection of vendorship is almost done but the Director is seeking miscalleneous expenses as an additional investment in which they need to spend to provide the Business .These are needed in unorganised sector for which the accounts and books cant be obtained due lack of system and other reasons, which is very common in any Business in our Country.  Ofcourse the execution of the agreed business doesnot have any undue favour, will have to be be done on quality and merit basis along with other competitors.

Now how to get an agreement for the said  expenses which cannot be shown in Master SErvice agreement of said business. Some local advocates are suggesting is that some equivalent amount agreement to be made for some other work in order to secure this transaction and obligation thereof.

or whats the best way to deal in this situation.

 

Thanks in advance.

 

 



 4 Replies

T. Kalaiselvan, Advocate (Advocate)     27 June 2025

Unless the related account and the connected papers are perused, no concrete opinion can be rendered based on your incomplete and unasuming details. 

You may better discuss with an experienced lawyer and also obtain a second opinion if you are not satisfied with the opinion rendered by the previous advocate and proceed as suggested

Dr. J C Vashista (Advocate )     27 June 2025

1,. Business transaction shall not be obliged by experts on this platform and same has to be consulted through a lawyer. 

2. Show related documents to your company secretary / CA / lawyer for proper appreciation and professional advise. 

R.K Nanda (Advocate)     27 June 2025

Consult your company secretary for advice. 

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     28 June 2025

When dealing with additional expenses not covered under the Master Service Agreement (MSA), consider these options:

 Potential Approaches 1. *Separate Agreement*: Create a separate agreement outlining the specific expenses, payment terms, and obligations. This can help maintain transparency and clarity.

2. *Amend the MSA*: Negotiate with the Director to include these expenses within the MSA, ensuring clear terms and conditions.

3. *Memorandum of Understanding (MOU)*: Draft an MOU outlining the understanding between parties regarding these expenses, without making it a binding contract. 


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