Know your legal right/ Divorce in India

Know your legal right/ Divorce in India

Between any couple divorce appears to be the most traumatic occurrences of their lives. However, it can be a costly affair in India if divorce is contested by any of the parties. Even couples who agree for mutual divorce have to show to court that they have been separated a year before the filing of the divorce petition. In India dovorce is considered to be a personal matter as rules of divorce are connected with one’s religion like Hindus, Buddhists, Sikh, and Jains is governed by Hindu Marriage Act, 1955. Muslims by dissolution of muslim marriages act, 1939, Parsis by the Parsi marriage and Divorce Act, 1936, and Christians by Indian Divorce Act, 1956. 

The spouse can initiate to send legal notice before ending their relationship.

There are different grounds on which divorce is granted, here our expert legal team helps you understand different topes of Divorce petitions and help in understanding the divorce process in India.  

Types of Divorce Petitions

Divorce with Mutual Consent

When both spouses agree to a divorce, then it is considered a Mutual Divorce. However, as per the Act, a couple should at least be separated for over a year and the same is to be proved before the Hon’ble Court. Ofte, even when either of the spouses is reluctant to the mutual divorce, agrees to a mutual divorce because it is relatively inexpensive, time saving and not as traumatic as a contested divorce. Matters such  as child’s custody, maintenance and property rights could be agreed mutually through an Agreement.

There are three aspects regarding which a husband and wife have to reach a consensus.

First is Maintenance decided by a wife. For this no law has stated the minimum or maximum limit of support. It could be any figure or no figure. 

Second is of Custody of a child, it takes maximum time in court to decide the custody of a child. It takes much longer when it is without mutual consent. Child custody in a mutual consent could be shared, joint or excessive depending upon the understanding of the spouses. 

Third one is the Property, the spouses must decide who will get which part or how much of the property. Thus includes both movable and immovable property. Even bank accounts could also be shared amongst the two. It is not necessary for it to be fair, so long as it is agreed to by both parties.

Once the first motion of the Divorce is filed, before filing of the second motion of divorce, there is a timing minimum of 6 months. However, waiver application could be moved before the Hon’ble court and its total courts jurisdiction on its allowance. As per section 13B of Hindu Marriage Act, 1955 and section 28 of special marriage act, 1954, the couple should be living separately for at least one year before divorce proceedings can begin. Living separately does not mean that they are living in different locations, it’s just mean that couple have to prove that there is no relationship between two as husband and wife i.e. having no physical relationship etc.

Divorce without Mutual Consent

In case of a contested Divrce following could be the grounds on which Petition can be filed-

Cruelty

Cruelty could be physical or mental cruelty. If any of the spouses has an apprehension or a reason to believe that he/she has been a victim to cruelty then it would be a sufficient ground to file for Divorce.

Adultery

If the husband has maintained illegal or consesunal intercource with a third woman, the wife is free to file for Divorce. However, it is no longer considered as a crime after the Supreme Court Recent judgement.

Desertion

If one spouse is deserting the other spouse without a reasonable cause (cruelty for eg) then there is  a reason for Divorce. There should be a proper reason to prove that. As per the act, dissertation should have lasted for at least two consecutive years.

Conversion

If any spouse converts his/her religion then divorce could be filed.

Mental disorder/unsoundness of mind

If any spouse becomes of unsound mind then divorce can be granted by either of the spouses.

Renunciation of the world

If any spouse has renounced the world then spse can take divorce.

BIAT Legal LLP over the years has become expert in handling Family and Matrimonial Litigations. 

Trademark Renewal Process In India

trademark renew in india

The Trademark Renewal can be defined as a process of restoration of all terms ,conditions , rights and security which a trademark provides to the business or a company.

  • RENEWAL TIME PERIOD OF TRADEMARK –

The trademark has a validity time period of 10 years and later on the company or business need to renew the registration without wasting time.

The organisation should register within 6 months before expiration after 06 months of the expiration or within one year of expiration.

  • RESTORATION OF TRADEMARK AFTER BEING REMOVED FROM REGISTER –

A Trademark can be restored even after being removed from the register .the process involves filing TM -10 and TM-13 forms along with the prescribed fee within one year of the trademark expiry.

  • DIFFERENCE BETWEEN TRADEMARK REGISTRATION AND TRADEMARK RENEWAL –

The Trademark registration leads to protection of the brand name and its right to use from any misuse.The trademark renewal on the other hand leads to the extension of the protection of the product brand and its rights for the next 10 years.

  • CONSEQUENCES FOR NON RENEWAL OF TRADEMARK WITHIN TIME LIMIT –

In case the renewal is not being applied within the specified time frame ,the trademark gets removed from the register immediately.One should remember that the maximum time to apply for the renewal of a trademark is 12 months after the expiry of the trademark registration.

  • TRADEMARK BEING REMOVED ON BASIS OF NON USE –

When a trademark is not being used for the period of consecutive 05 years from the registration date or not used for a period of 03 months before date of application for removal ,thereafter it can be removed .

  • TRADEMARK OWNER BEING INITIATED ABOUT RENEWAL OF TRADEMARK –

The trademark owner is always initiated about the trademark renewal and it is done through IP India.An electronically generated notice is being sent from the trademark automation system and is delivered to the owners address through the registered post.

  • TRADEMARK RENEWAL NOT DONE IN DUE TIME AND OTHER COMPANY REGISTERS THE SAME –

In case the trademark renewal is not done by the owner in a specified time frame after the expiration , it goes available in the public domain and anyone can apply for the registration and the previous owner has no right to stop the registration since he does not have the rights of that particular trademark.

  • ANYONE ELSE APPLY FOR RENEWAL ON PLACE OF TRADEMARK OWNER –

In case , the owner is not available to apply for trademark renewal , the renewal can be done through his /her authorized agent , administrator ,managing trustee etc. 

  • OBJECTION BEING RAISED DURING TRADEMARK RENEWAL –

During the renewal of trademark when an objection is being raised , a letter of query is being sent to the applicant.There after the renewal process remains pending till a response from the applicant is not being received. 

  • CAN A TRADEMARK CLASS CHANGE DURING RENEWAL – 

No , a trademark class once registered cannot be changed by the entity or there cannot be any modification once after the registration.

LIMITED LIABILITY PARTNERSHIP COMPANY [LLP] FORMATION IN INDIA

LIMITED LIABILITY PARTNERSHIP COMPANY [LLP]

The LLP stands for limited liability partnership which can be defined as a corporate entity registered under the limited liability partnership act ,2008.

It can also be defined as a hybrid form of partnership that enjoys limited liabilities and also includes features of a company.One should note that the compliances for a company are applicable to limited liability partnership.

  • BUSINESS WHERE LLP NEED APPROVAL FOR REGULATORY AUTHORITIES –

There are certain business activities where the limited liability partnership companies need prior authority of regulatory authorities before the beginning and usch business activities are venture capital ,banking , stock exchange ,merchant banking ,architecture , chit fund ,reconstruction , NBFC ,mutual fund etc.

All the activities marked above need the prior approval for concerned authorities and bodies before starting the business as per terms and conditions of the companies act ,2013.

  • FOREIGNER CAN BECOME A PARTNER IN LLP –

According to new companies act ,2013 , the foreigner can also become a partner in the limited liability company keeping in mind that there should be at least one member or partner in the company who is an indian citizen and resident of India in the previous calendar year.

  • CONVERSION OF PARTNERSHIP FIRM INTO LLP –

A partnership firm can be easily converted into the limited liability partnership firm according to rules defined below –

A form 17 is needed to be filed along with the form 2 for the conversion of the partnership firm into the limited liability partnership company.

One should note that an existing partnership firm by complying with the provisions of clause 58 and schedule 2 of Limited liability partnership act can be easily converted into a limited liability partnership company.

  • MINIMUM PARTNERS REQUIRED TO FORM LLP –

As per the Limited Liability Partnership act,2008, The minimum partners required to incorporate a limited liability partnership firm is two and there is no limit for the maximum number of partners.

  • A FOREIGN LLP CAN ESTABLISH BUSINESS IN INDIA –

According to the new companies act,2013 a foreign limited liability partnership company can easily establish a business in India.The process involves filing of form 27 with the ROC.

The form includes various details such as foreign LLP incorporation , two authorized representatives ,designated partners for compliances under the act.

  • ADVANTAGES OF FORMING LIMITED LIABILITY PARTNERSHIP COMPANY –

The advantages of forming limited liability partnership companies are defined below –

1] FEATURES OF PARTNERSHIP AND COMPANIES –

The basic and foremost advantage is that LLP includes features of both partnership firm as well as the company.Therefore both the types of feature are available here.

2] INCORPORATION COST INVOLVED –

  The cost involved in the incorporation of the limited liability partnership company is very low.

3] MINIMUM TWO AND MAXIMUM PARTNERS EXEMPT –

 In LLP there is no limit for the maximum number of the partners and minimum required partners for the incorporation is two.

4] AUDIT NOT MANDATORY –

 There is no mandatory audit to be done in LLP unless the turnover exceeds Rs. 40 lac. And the capital contribution exceeds rs.25 lac.

5]MAINTAIN ONLY ACCOUNT BOOKS-

 There are very few records to be maintained i,e only the books of account are needed to be maintained.

6] LIMITED LIABILITY OF PARTNERS –

 In the case of LLP , the partners’ liability is limited to his shares and therefore the personal assets of  every partner is safe and secured.

Decoding the benefits of registering a Business

Decoding the benefits of registering a Business

There are lots of benefits which are there of registering a business in India and they are as follows-

  1. It gives you a structure- By forming a new company, it gives you a better structure of business, like suppose if you want to open a one man company then you can go for One person company formation, or if there are Partners in your company then you must opt for a Partnership Firm and by forming a company, it helps in smoothly running of a firm.
  2. Without structure there is no order in the company and therefore it affects the profit margin of the company. Therefore when we talk about business then we must focus on how must give a properly organized structure to your business idea.
  3. By opting for a registration of company, it gives a separate entity to your business, as you get certificate of incorporation which can be called as a Birth Certificate of your newly formed company.
  4. There is perpetual existence of a company, like when we open a startup , then everyone one only wants to make money but also they want to establish a legacy. When a business is registered it gives a separate entity. If and when the owner of the business dies the business can continue to exist. Its ownership can be transferred to another Director, or it can lie dormant.
  5. Registered business are more trustworthy, basically unregistered business is worthless as before doing any business, anyone wants to have safe business and they do not want to lose in their services, therefore registered business are termed as more understandable as compared to the unregistered one.
  6. Limited liability partnership is probably the most overused terms when it comes to “ benefits of Business Registration”, however people are still fuzzy about its meaning. So Limited Liability means that a company is a separate legal entity and it has to bear its own losses.

Conclusion

When it comes to business registration, there are many but when we talk about its benefits, there we lack, I hope that through this blog we have enlightened you with the understanding of what the benefit actually means.

What Is Trademark Rectification ?

What Is Trademark Rectification ?

What is Trademark Rectification?

Trademark rectification is needed when there is a need for any kind of alteration, change, modification or rectification in the registered mark or in the register of trademarks, or rectification of the trademark register by such aggrieved party.

Trademark rectification rights in India is governed by chapter VII of the trademark Act, 1999. Under section 57 of the Trademarks Act, any person who is aggrieved by the entry in the trademark register can file for trademark rectification before the registrar of trademarks. However, in certain cases consequences can be cancellation of trademark registration.

Who can file Trademark Rectification?

  1. It can be filed by the owner of the trademark itself, or
  2. It may also be filed by the party or entity being aggrieved by such entry.

Common grounds for filing Trademark rectification in India

  1. Due to latest knowledge or advancement
  2. Due to non-use of registered trademark for over 5 years by the registered owner.
  3. Due to non-renewal of the original or previous registration of the trademark.
  4. In cases where inclusion of addition of certain more classes of goods or services to the business gamut of the registered trademark.
  5. Conditions which are beyond any more grounds stipulated in section 9 and 11 of the Indian Trademark Act, 1999.
  6. The certain omission of any entry eg, a disclaimer, condition or limitation.
  7. Where the registration is obtained by misrepresentation of facts, similar to an earlier mark registered and lacks sufficient cause for registration.
  8. Cases where mark was wrongly remaining on the register and causing or likely to cause confusion.
  9. When the renewal fee has not been paid.

Procedure for Trademark Rectification In India

Procedure for Trademark rectification in India includes following hings-

In cases where trademark registry has marked the trademark application as Formality check or send back to EDP, therefore in this case option of rectification and of being is being given and it requires to be resubmitted. In such cases, rectification deed is required to be prepared to address all the concerns of the trademark examiner-

  • TM-O form is required to be filled in order to file trademark rectification.
  • Make sure that your trademark rectification application is a clear and crisp statement of grounds related to the application.
  • You must support your arguments with strong evidence to support rectification of the specified trademark.

We have immense and diversified experience in handling Trademark rectification cases and shall suggest more professional ways to avoid trademark rectification. 

Vinubhai Haribhai Malaviya and Ors. vs State of Gujarat

Vinubhai Haribhai Malaviya and Ors. vs State of Gujarat

A recent judgement of the Supreme Court of India on criminal law passed by the quorum of justices Rohinton F nariman, Surya Kant and Ramasubramanium. The judgement holds that a power exercised by the magistrate under section 156(3) of the Cr.Pc. is post cognizance. 

The question arises by the Supreme court that once Chargesheet is filed by the police after doing proper investigation, then whether Magistrate has the power to pass an order to the police officials for further investigation under section 173(8)  and if so then upto what stage of criminal proceedings? 

Different views were given by different judges which also creates doubt in the judicial minds. Then after a near exhaustive survey of the conflicting decisions, the Bench in malviya held in favour of the view that a magistrate has power to direct further investigation by an investigating agency post cognizance on a police report right up to the stage of framing of charge that interpreted section 173(8) crpc restrictively. This view was acceptable as it was undoubtedly redounds in the interest of justice. 

It is pertinent to note that the Bench in malviya was concerned only with the question whether post cognizance a Magistrate could direct further investigation under section 173(8). Whether a magistrate exercising power unders section 156(3) was acting pre cognizance or post cognizance was not at all the issue in this case.

Thus it is undoubtedly correct that section 156(3)  and 173(8) operate at a different stages of investigation like section 156(3) operates at pre cognizance stage whereas 173(8) operates at the post cognizance stage as it is intended to supplement a completed investigation.

It is pertinent to note here that the power of magistrate under section 173(8) is not derived from his power unders section 156(3) but is a distinct and independent power. 

This proposition regarding the meaning of “taking cognizance” has been often repeated in many apex court judgment. Had the bench of Malviya been cognizant of this well established proposition of law, it is doubtful if it would have arrived at the unfortunate finding in paragraph 26 of the judgement.

The power unders section 156(3) can only be exercised at pre cognizance stage was an erroneous finding in law”.

Judgement

Therefore it was held in the case that a three judge bench of the Supreme Court Of India virtually overruled a 43 year old precedent and held that magistrate can invoke power under section 156(3) of the code of criminal procedure even at the post cognizance stage. The Bench headed by Justice RF nariman held that this judgement was rendered without advertising to the definition of “Investigation” in section 2(h) of the crpc. It was observed that the finding in the law in the said judgement that the power under section 156(3) crpc can only be exercised at the pre cognizance stage is erroneous.

TRADE LICENSE

TRADE LICENSE

When any organization, an individual firm is planning to start its business operations at small or large scale it needs a license to carry on the business activities and that license is termed as Trade License.

It is mandatory for the organization , firm or business entities to have a license for commencement of any type of business .A company or business enterprise should obtain the license within 15 days from the commencement of the business or 03 months prior starting the business.

The state government together with the municipal corporation of the area regulates the licensing process. There are different mechanisms of charging the application fees and some pay annually while others make it as per the annual turnover.

Therefore an applicant shall be at least 18 years of age , should have a clean and right image in the society and free from any type of criminal activities or no case of criminal activities under his name.

  • CATEGORIES OF TRADE LICENSE –

A] CATOGORY 1

This category includes mostly business of consumable items and eating places

B] CATOGORY 2 – 

These categories include licenses to those businesses which are mainly engaged in industries , workshops , flour mills etc.

 C] CATEGORY 3 –

For business related to firewood , charcoal etc. the above category is being provided

  • DOCUMENTATION REQUIRED FOR TRADE LICENSE –

There  are various documentation being required in order to get the license of the trade license which are being highlighted below –

1] The bills of the place where business or operation will be carried

2] Agreement of the rent or lease 

3] Receipt of municipal taxes 

4] Certificate of the registration of shop as per the act 

5] Applicant Id proofs

6] Copy of blueprint of the premises or workplace

7] Pan card details of the applicant 

8] If the business is managed by some other person irrespective of the owner therefore provide ID proof , photo , Address detail of the manager 

9] Non objection certificate from the fire department 

  • MINIMUM REQUIREMENTS FOR OBTAINING TRADE LICENSE – 

A]  AGE CONDITION – 

It is mandatory for an individual or applicant applying for the license to be 18 years of age.

B] LEGALITY – 

The company or applicant applying for the license should have business activities legal and valid in the eyes of law.

C] CRIMINAL CASE – 

The applicant should have no criminal background and carry on a clean image in society.

  • TRADE LICENSE RENEWAL – 

A trade license is not a one time license only and shall be renewed on time to time basis.

In some states and cities , it is compulsory to pay a certain amount of annual fees in order to renew the trade license.

The renewal is done between 1st January to 31st march of every year.The renewal application should be made at least 30 days before from the expiry time so that it shall be done in time.

In case of delay , there is a late fees fine of 50 % of the total trade license fees incurred.There are certain documents to be submitted with the application for trade license renewal :

1] Copy of the original license 

2] Tax payment receipt 

3] previous year challans of fees being paid

  • DENIAL OF THE TRADE LICENSE APPLICATION – 

Sometimes the application applied by the applicant for trade license purpose gets rejected , under such circumstances one can make appeal in the to the standard committee or file a petition to them with the relevant documents together with the copy of letter of denial so that the matter can again be considered for approval of trade license

How to use Copyrighted Content?

How to use Copyrighted Content?

Copyrighted content is a content on which owner has the exclusive right over the work. To need this protection, one has to undergo with the copyright registration Process. It is regulated by the Copyright Act, 1957. Copyright Registration grants the right to the creators of Literary, Artistic, Dramatic and Musical and the producers of cinematographic films and sound recording. 

How to identify the owner of the copyrighted Product?

As we all know that copyright protection is only given to those people who have made or created original work of their own. It is therefore always advisable for every person who is willing to copyright their product is to always take expert advice regarding their product who can help them in a better way.

How to use Copyrighted Content?

Now you must be thinking that whether you require the permission to use Copyrighted content or not. Then let us inform you that you may come across either of the cases-

  • There are basically two instances of using a copyrighted content- when prior permission is required to use a copyrighted content.
  • When no permission is required.
  1. Cases where no Permission is required-
  • If the copyrighted content is already in the public domain, then anyone can use it without any prior permission. Public domain means that the owner has not taken copyright protection from the Registry, therefore it is open for everyone to use the Copyrighted content.
  • Whenever work is released under open License, For example, creative commons, then that work can be used by anyone, as long as you comply with the terms of their copyright License.
  • There is no need to get permission from the owner of the work if that work falls under the category of fair use. It may be a tricky business, therefore it is always advisable to take some expert advice on these issues. 

     2. Cases when permission is required-

  •   We all are creating copyrightable  content knowingly or unknowingly. For eg. by writing an email, blogs, clicking a selfie etc. finding a copyright owner may become a tricky business. Now let’s take a look, what needs to be at the time of finding the copyright owner.
  1. Whether the creator of the work is alive or not, to use their product it is mandatory to take their permission before using the copyrighted content.
  2. If the creator of the copyright has already assigned or transfer the wok to someone else like a record label, publisher or created work as a part of their job, then you need to contact the entity. You could always contact the licensing department to seek permission.
  3. There are certain organizations, to which the creator of the work can subscribe to get royalties on their work. These organizations are known as Performing Rights Organization (PRO) and Reproduction Rights Organizations (RRO). PROs deal with the publicly related work on the national level, such s music. RROs deal with the work such as technical, medical and cultural work on the national and international level.
  4. If the author of the work dies then it is automatically transferred to the legal heir of the creator. But it is not easy to track down the family members of the author.
  5. Here are orphan works are also available in the market, whose rights holder cant be determined and it seems impractical to establish the inheritance rights in these cases. Or the rightful owner was never aware of the rights of the copyrighted work. 

Conclusion

So for the next time, if you intent to use copyrighted work, then you must go through the guidelines which are provided above to reach the copyright owner. For any assistance regarding copyright work. Kindly contact BIAT Legal.

What is loan against Bonds?

What is loan against Bonds

A Bond is a fixed income instrument that is given to a borrower by an investor. 

Bond is like a loan which you take from an investor. For eg. if you buy a Bond from a company, then you have that amount to the company, and like any other loans you earn an interest on your investment.

What are the documents required for loan against shares?

For an Individual borrower

  • PAN Card
  • Aadhar card
  • One Cancelled cheque/ Bank Statement

For a Company Borrower

  • MOA/AOA
  • List of Directors
  • Shareholding pattern
  • Board Resolution
  • PAN Card and address proof of the company & Director
  • Cancelled Cheque/ Bank statement

FAQs

  • What is loan against securities?

Loan against securities is available in the form of an overdraft facility which is pledged against securities like shares, units and bonds. Loan against shares/bonds/Mutual Funds 8is basically a loan where you pledge the securities you have invested in as collateral against the loan amount. A loan against securities is the best way to make your investment work harder and smarter than you.

Loan against securities have following features and benefits-

  1. It has High Loan Value as it is up to 10 crores.
  2. Dedicated relationship manager is available 24/7 to assist you with all your request.
  3. Nil part payment and foreclosure allows you to repay the loan at your convenience, as and when it’s feasible for you.
  4. Online account management is there, as you can manage your account from anywhere. Easy documentation is there as it does not require any financial document to avail ona against securities.
  • What is loan against Shares?

Loan against shares enables you to borrow funds against listed securities such as shares, Mutual funds, insurance and bonds to meet your current financial needs. 

Its Features and Benefits

  1. It has High Loan Value as it is up to 10 crores.
    1. Dedicated relationship manager is available 24/7 to assist you with all your      request.
    2. Nil part payment and foreclosure allows you to repay the loan at your convenience, as and when it’s feasible for you.
  • What is the interest rate for loan against asset?

Where a borrower pledges an asset as a collateral. With this type of loan, the borrower gts access to a high loan amount at affordable interest rates. A borrower can avail upto 80% of the asset value. Some of the common type of loan against asset includes-

  1. Loan against commercial and residential property.
  2. Loan against cars
  3. Loan against investments such as fixed deposits.
  4. Loan against securities like mutual funds, shares, bonds, insurance policies.
  5. Loan against valuables such as gold.
  6. Loan against investment such as Fixed deposits.
  7. Loan against valuables such as gold.
  8. Loan against Land.
  9. Loan against future payments such as the rent of commercial properties.
  • What is a secured Loan?

A secured loan is a type of loan in which a borrower pledges an asset such as car, property, equity, etc against that loan. The loan amount made available to the borrower is usually based on the value of the collateral.

Types of secured Loan

  1. Real estate, including any financial equity earned since purchasing the residence.
  2. Bank account such as savings accounts and fixed deposits.
  3. Commercial and residential property
  4. Private vehicles.
  5. Stocks, mutual funds, or bond investments.
  6. Insurance policies, including the insurance
  7. Precious metals, high end collectibles, and other valuables.

PEER TO PEER [P2P] LENDING LICENSE

peer to peer lending license

The Peer to Peer lending can be defined as a mode of business where a platform in digital form is provided to an individual or an entity for raising loans or fund at certain interest rates and is needed to be paid back as per the specified terms and conditions.The interest rates are either set by the lending organization or after mutual discussion between the borrower and lender etc.

In India ,the Peer to Peer[P2P] lending business has been extended to 5 billion dollar as per the reports being concerned.Therefore the entrepreneurs and startups business can easily avail loans from this platform without much documentation.

In such  lending there is no involvement of any financial institutions and banks and the lenders are free to choose the borrowers whichever they want to give loans. This form of lending money is getting very famous among investors as they get a higher rate of return through the Peer to Peer[ P2P] lending business.

The Peer to peer lending companies are being regulated through Reserve Bank of India [RBI]and therefore reserve bank of India reserves  power for providing lending license to the applicant.

  • TYPES OF PEER TO PEER LENDING MODEL –

There are namely 03 types of model being defined below ;

A] CONSUMER LENDING –

The consumer loans involve small personal loans taken by the individual for purchase of car , bike , marriage expenses , home repairs , Repayment of credit card etc.

B] SMALL BUSINESS [SME] LENDING –

The loans provided to small businesses for various purposes such as asset finance , working capital , business to be extended etc .

C] PROPERTY LENDING –

Under this lending ,the applicant borrows loan for purchase of property ,commercial ,refurbishing of house etc .

In india one needs to fulfil certain conditions in order apply for the peer to peer lending license-

1] A company should be registered 

2]The applicant shall have adequate amount of capital structure 

3] The applicant company shall have technological , managerial , 

4] A pure motive to serve the public and its interest 

5] a proper business layout and plan 

6] The board of directors shall fulfill all terms and conditions of RBI

  • PROCEDURE TO OBTAIN THE LENDING LICENSE –

Any company being registered as private or public limited company can apply for the license with the reserve bank of India.They need to fulfill the conditions below –

1] The applicant company must be registered as a private or public company under the eyes of law and have an objective of doing financial financing of money.

2] The Minimum net owned fund should be Rs.2 crore .

3] There should be efficient information technology system i.e mobile application for the workflow 

4] The online application form is available at the RBI website. 

5] The hard copy of the application together with required documents to be submitted to the office of the reserve bank of india.

6] After doing detailed and vigilant verification of the application and documents attached with it , the RBI provides the license certificate to the applicant company .

  • MERITS AND DEMERITS OF PEER TO PEER LENDING PLATFORM –

There are various merits and demerits of peer lending platform for both borrowers and lenders and these are highlighted below –

FOR BORROWERS :

A] MERITS –

1]  The first and foremost benefit is the amount of loan received is either at fixed rate of interest or low interest rate as compared to other financial institutions .

2] The documentation is very simple and easy as compared to documents required while taking loan from financial institutions 

3] The fees and other charges required are low as compared to banking institutions

B] DEMERITS – 

1] There is high use of information technology and there is a lack of security as documents can be leaked or information can be wrongly utilized.

2] The amount of loan provided is less as compared to the financial institutions.

FOR LENDERS :

A] MERITS –

1]  The return of the investor is higher as compared to the risk taken 

2] The investor is happier as he has diversification and more places available to invest his capital and earn more.

3] In peer to peer lending ,the lenders communicates with the borrower directly to finalize the deal

B] DEMERITS –

1]The risk factors involved here are higher and uncertain as compared to the banking financial institutions

2] The returns are lower in comparison to public traded index fund

3] The future possibilities are uncertain and unrealistic and it’s too early to make future opinions of this type of industry