In practical purposes, this isn't really going to happen. If you really wanted to be on the up and up about it, OP can just tell the guy that he's closing the venture to pursue other projects.
Presumably, he can use the business model knowledge to get a new domain, start a real company, and redo the same business model on his own.
It sounds like the US guy is really going to push him around. Sue him? How is he going to serve the papers in India? With no contract? Really don't think lawyer would take that case.
If it comes down to a bunch of IM's sent, well then it'll be case of "was this an equity investment, or was it a loan". If the OP paid him back, a strong argument could be made that it was a loan.
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In practical purposes, this isn't really going to happen. If you really wanted to be on the up and up about it, OP can just tell the guy that he's closing the venture to pursue other projects.
Presumably, he can use the business model knowledge to get a new domain, start a real company, and redo the same business model on his own.
It sounds like the US guy is really going to push him around. Sue him? How is he going to serve the papers in India? With no contract? Really don't think lawyer would take that case.
If it comes down to a bunch of IM's sent, well then it'll be case of "was this an equity investment, or was it a loan". If the OP paid him back, a strong argument could be made that it was a loan.