Legal 101 for fintech start-ups.

14th January 2022

The financial technology (fintech) industry is a space that’s constantly evolving – uncovering new ways to use tech to simplify financials for consumers and businesses.

The industry is booming and showing no signs of slowing down, with thousands of new start-ups emerging every year.

Often, fintech start-ups focus their efforts and limited resources on their idea and securing funding. However, they’ll often underestimate or overlook the legal aspects of getting a business off the ground. That’s where having a trusted lawyer can help. Read on to find out some key legal considerations for fintech start-ups.

Asset protection

You’ve got all the ingredients to be the next big fintech company. But unless you have the legal protections in place for your assets at the beginning, your business could be vulnerable. After all, the last thing you want is for a copycat to come in – either in Australia or overseas – and take your ideas without you having anything you can do to stop them.

It’s also an important protection against litigation. A lawyer can sit down with you and help you understand what sort of asset protections would be best for your start-up. Having asset protection means that if your business is sued, your assets – such as your home, buildings and equipment – will be protected as best as possible.

Business structure

In the early stages of a start-up, almost everything may be done by the founder or co-founders. But as your company gets funding for growth, you’ll need an established business structure to ensure it’s got a solid foundation. This is all-important to get right from the outset, as it can be costly and difficult to change later down the track.

We can guide you through this process. We’ll help you understand how your business structure can affect your business’:

  • Legal and operational risk
  • Legal costs
  • Tax obligations
  • Asset protection.

Partnership or shareholder agreements

Funding is critical to get fintech start-ups off the ground. When you enter into any sort of partnership or stakeholder agreement, a lawyer ensures things are done by the book, including with dispute resolution mechanisms in your contracts. This can provide you with peace of mind, knowing you can enter into these arrangements while still protecting your company.

A word to the wise: never try to draft these legal agreements yourself. Tempting as it may be to download a template or make your own attempts, it can be a recipe for disaster and end up wasting a lot of your precious time and money because you will be using a document that takes no account of your own legal circumstances.

Your start-up’s intellectual property (IP) is everything. It’s what you’ll build your business on, so it makes sense to make sure it’s protected. Having a lawyer guide you through what you need to consider and what’s relevant to your business will help you get things right from the get-go.

As your team grows, we can ensure your company owns any IP that your contractors or employees create in their roles. This gives you ownership of the work your team members produce, which means that if they leave, that IP doesn’t leave with them. If you have any invention, design or trademark, a lawyer can walk you through your registration options. This can become valuable for your business if you look to sell or bring on investors. We can also insulate your IP and assets against future third-party claims.

Setting up fintech start-ups for success

At Lakis & Knight, we have extensive experience working with start-ups. We understand the challenges you’re facing, such as working with minimal capital. That’s why we offer affordable alternatives that keep you in the driver’s seat, including fixed-priced projects to provide you with transparency and financial certainty.

We offer our 1-hour no-obligation discovery consultations, where we’ll come meet you, ideally face-to-face.

During this time, we’ll get to know more about your business and work out what your needs may be. Paired with our fixed-fee options, you’ll have full transparency about what you’re getting for your money and a lawyer who genuinely cares about your success.

To get started, get in contact with us today.