alter a check?

I have a friend that wants me to take over an existing ebay store he has but has no time to run. He sent me a check to fund it for 5000.00. The store has a little pre-existing debt, no big deal, but on the check in the footnote he wrote loan for (name of store). When I asked him about this, he said it was not a loan, that we would be partners, with several people listing in the store and we would have to work something out on the listing and final value fees charged by ebay. It is a digital camera store so the fees could be substantial. I told him I wouldn't endorse or cash the check if it said loan on it, so I wouldn't be liable for a loan, he said mark that part out and put it in the bank.
Somewhere I remember hearing something about "altering an instrument" being illegal. Right or wrong?

You can mark it out but to avoid a dispute later, have him put this all in writing--ie that it is not a loan etc. He can just write up a quick letter.

I have a friend that wants me to take over an existing ebay store he has but has no time to run. He sent me a check to fund it for 5000.00. The store has a little pre-existing debt, no big deal, but on the check in the footnote he wrote loan for (name of store). When I asked him about this, he said it was not a loan, that we would be partners, with several people listing in the store and we would have to work something out on the listing and final value fees charged by ebay. It is a digital camera store so the fees could be substantial. I told him I wouldn't endorse or cash the check if it said loan on it, so I wouldn't be liable for a loan, he said mark that part out and put it in the bank.
Somewhere I remember hearing something about "altering an instrument" being illegal. Right or wrong?

Granted the original post was Nov, 2006, but I would like to present my thoughts on this item. Also, your post begs a lot of unanswered questions but space limitations have to be considered. As far as altering the check, don't do it. Get your friend to issue a new check. If altering a check that works in your favor (as in this case), you may have problems (changing the memo from a loan to a gift or marking it out). Altering a check that favors the issuer should not be a problem (changing a gift to a loan that has to be paid back).

How you handle the check depends upon a lot of things. Some of which are:

Who is the check made payable to? The check should be made payable to the store.
It the store an LLC?
What are the ownership/partnership arrangements?
Who is the legal owner of the store?

I think the real question is 'What is the purpose of the $5000?". If it's not a loan, then it's an investment or a gift. This is an existing business. Why does it need a loan? Little debt should mean some cash in the bank (maybe not a lot). If it isn't a loan, why put loan on the memo? It sounds like it's a $5000 investment. Should void the check (if it's a personal check) and rewrite it, otherwise a notarized, detailed letter stating the purpose of the $5000.

Will you eventually own the business? Or will you be the on-site manager of the business? Sounds like you'll be the on-site manager. If you will own the business, then I would think that $5000 loan would be better. If it becomes really successful, pay off the loan and have no further obligations.