Legal Question in Business Law in India

Hi There,

I am developing an online B2B ( Business to Business ) portal ( our location is India) where suppliers and importers will join from global locations. To enhance trust and facilitate transactions, we are thinking to act as a mediator when buyer pays money to the seller. This means buyer won't pay money direct to the seller but to us. Once buyer receives their desired goods, we will then release payment to the seller. Keeping in mind supplier and buyers can reside in different countries, we are planning to offer only international wire transfer as a payment option. This is how it will work

1 ) Buyer and seller decide T&C

2) Buyer deposits payment to "Our account" via wire transfer

3) We will notify the seller that payment has been received so that will ship the products

4) Buyer confirms that they have received the products

5) We will then release the payment that we are holding from the buyer to supplier via wire transfer

In case of any disputes in the transaction, we will act as a mediator and try to resolve the disputes.

Is that possible for us to act like this? Are there any legal requirements? Will our bank in which we have account raise any questions when they see payments from many countries?

Regards,

Chetan


Asked on 12/16/11, 9:57 pm

2 Answers from Attorneys
Jayesh Desai Jayesh Desai

You will need permission from RBI to deal in Foreign Currency - as you will be transacting in multiple currency, in addition to this you may need a declaration (in case of imports) that the Importer (Indian Party) has the license / permit to import the same or it falls within OGL or otherwise there exists no restriction in import of such items. You also need to specify venue of Arbitration & Rule also need to be framed in advance.

It is a very complex issue and you shall need a proper legal advice in this regard, it is not possible to advise via e-portal every aspect. You may consult some appropriate lawyer.

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Answered on 12/16/11, 11:43 pm

Mr Jayesh is absolutely right. There are many aspects which needs to be looked into like RBI Regulations, Safeguard of each party's interest. Legalities and properly drafted legal documents to be signed between the parties.

Consult the legal experts in detail and move further.

Regards

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Answered on 12/16/11, 11:48 pm


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