Legal Requirements and Compliances For a Fintech Startup in India - Enterslice

What is Fintech?

#Fintech is a blend of two terms- #Finance and Technology. Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. Fintech leverages the use of technology to enhance or automate financial services and processes.

Services provided by different types of online finance companies include-
• Payment services
• Lending resources from #P2P;
• Retail banking services;
• Personal Consulting services for finance and savings.

There are certain legal requirements and #compliances which should be fulfilled by the #FintechStartup in India.

The first step for a fintech startup is to determine the business structure. As a Fintech Startup, you can opt for business structure like-

• #OPC
• #LLP-
• Private Limited Company.

Then GST Registration is also essential.
An online finance business or a fintech startup should register for GST and get #GSTN for the business.

Coming onto Contracts and Agreements.
One should get certain legal documents to start a fintech #startup. An advocate can help you draft customized legal documents as per your business requirement. Some of the contracts and agreements includes

• Co-Founders Agreement;
• IP Licensing Agreement;
• Website user policy;
• Privacy policy;
• Terms of use for mobile users;
• Product development agreement;
• Vendor agreement;
• Employment agreement.

Then comes #IntellectualPropertyRegistration.

Intellectual Properties protection such as Copyright, Patent, Trademark and Design should be obtained. It will help in protecting your brand, website, mobile app etc. By registration, you will possess the right to seek remedy in case of #IPRinfringement.

Licensing is another major requirement.
Licensing and regulation will depend upon the type of service provided by the Fintech Startup.

In case of payment services, they require registering with the Reserve Bank of India.
In case of retail service providers, license is required for retail fintech to perform lending services and depositing services for #MSMEs.
For financial management and investment, Fintech should be registered as #NBFCs as prescribed by the Reserve Bank.

Moving on, a technology based company would want to have their presence on the internet therefore, it is a must to have a domain name and a fully developed website. If you are a small start-up, then consider setting up a mobile app.

Fintech companies operate on the internet therefore, they must comply with the directions set out in the Information Technology Act 2000[1]. These companies rely on the individuals’ personal data therefore, to prevent legal complications, they are required to follow specified data security requirements.

Corporate bodies should get permission from the information provider to disclose any personal confidential data. Further, they must maintain security control structures and follow information security protocols. Certifications like IS, ISO and are included.

With the advent of Fintech players, traditional financial market has been disrupted greatly. As they use modern technologies for providing financial services, their objective of financial inclusion is targeted. So if you are planning to start a fintech startup in India, then you should be aware of these information. In case of any query related to this topic, you may comment below.

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