Reducing legal risks with a smart approach, Law firm Veat provides legal advice for building successful financial platform services.
Article posted in 2024-11-21 18:11:09 | VEAT
Law firm Veat received a request from startup A (hereinafter referred to as the “customer”) preparing a money lending platform to review whether registration as a money broker is required under the Money Lending Business Act when operating the platform.
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「Act on Registration of Money Lending Business and Protection of Financial Service Users」(hereinafter referred to as the “Money Lending Business Act”) Article 2 (Definitions) The meanings of the terms used in this Act are as follows. 1. “Money Lending” means engaging in the business of money lending (including the lending of money through bills of exchange discounts, security interests, or other similar methods). This is referred to as “money lending” hereinafter. |
Law firm Veat determined that there was a possibility of being considered a money broker in the case where the platform connects money lenders and prospective borrowers and plays a substantial role in concluding lending contracts. Accordingly, Veat confirmed whether the customer's service went beyond the simple provision of information to perform actual money brokering activities and reviewed the scope of money lending and money brokering as defined in Article 2 of the Money Lending Business Act to review the necessity of money broker registration.
The customer also intended to provide advertising services and provide information about lending companies. Law firm Veat thoroughly analyzed the possibility of such activities being considered money brokering and whether money broker registration would be required.
Furthermore, Veat explained in detail the capital requirements, qualifications of the management, and registration procedures that the customer must satisfy if money broker registration is required and provided legal advice to facilitate their implementation.
Legal Issues to Note Regarding Money Lending and Money Lending Information Services
Advertising restrictions must be strictly adhered to when engaging in money lending and providing money lending information. Even if simply providing information, a verification process must be established to ensure reliability if the information is inaccurate.
Also, if false or exaggerated expressions are included in lending advertisements, or if inappropriate expressions are used to entice consumers, the 「Act on Fair Promotion」(hereinafter referred to as the “Advertising Act”) may apply. Therefore, it is recommended to seek assistance from legal professionals familiar with relevant laws when considering a money lending business.
Law firm Veat provides specialized legal advice for IT and startups, supporting a wide range of legal issues from startup's initial business ideas to legal structure design and review of relevant laws. In particular, Veat has a deep understanding of the complex legal issues of technology-based businesses and financial services and provides practical solutions to contribute to the customer's business success.
Recognizing this expertise, Law firm Veat was selected as a "Notable Firm" in the 'Fintech Financial Services/Technology-Based Startups Advice' category by the international evaluation agency THE LEGAL 500. This demonstrates that Veat has established itself as a trusted legal advisory firm in the field.
Furthermore, Law firm Veat provides legal advice related to Fintech Financial Services to minimize legal risks and provide professional and practical support to meet the legal requirements optimized for each customer's business model.
If you require legal review and advice regarding financial services, please feel free to contact Law firm Veat.
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