Case Studies
[Venture Capital Firm] 3 Reasons Why a Legal Expert Should Review Investment Contracts
Law firm Veat performed investment contract review at the request of a bio-medical pharmaceutical company (hereinafter referred to as "client"). The client requested a thorough review of the contract during the investment attraction process and asked to adjust clauses written from the investor's perspective to be more favorable to the company receiving the investment. In particular, they requested Law firm Veat's investment lawyers to assist in adding penalty clauses, maximizing the client's interests. Law firm Veat meticulously analyzed the investment contract according to the client's request, and proceeded with risk review, addition and adjustment of penalty clauses, and clause modification centered on the company receiving the investment as key points. Investment contracts often contain clauses that can impose excessive burdens on the company receiving the investment. In particular, clauses that strengthen the investor's authority, excessively intervene in the management of the company receiving investment, and impose unfair conditional obligations can significantly impact business operations. Law firm Veat, specializing in investment, reviewed investment contracts, identified clauses that could act unfavorably to the client, and thoroughly explained these risks to the client. The client wanted to add penalty clauses to the investment contract. Penalty clauses are clauses that stipulate liability in the event of contract breach, and there is a high probability that these clauses will act unfavorably to the company receiving the investment. Therefore, Law firm Veat's investment lawyers reviewed the necessity of penalty clauses in the investment contract and carefully designed the penalty clauses to allow the client to gain a favorable position in negotiations with the investor. Investment contracts are often written from the investor's perspective, so they can contain unfavorable clauses to the company receiving the investment. Investment lawyers reviewed the clauses in the contract and modified and restructured them to act favorably to the client. For example, we advised on negotiating clauses related to the investor's voting rights and management rights, and clauses related to the return of investment capital, in a direction favorable to the company receiving investment. Investment contracts: Legal documents that can determine a company’s future An investment contract goes beyond a simple monetary agreement between an investor and the company receiving investment; it can stipulate operating policies, decision-making structures, and even solutions for disputes. Therefore, the clauses in an investment contract can significantly impact a company’s future growth direction and strategic operating plans. These investment contracts reflect complex and sophisticated legal logic, and failure to clearly understand and adjust them can act as unforeseen risks to a company’s future. In particular, contracts written on favorable terms for investors can significantly restrict a company’s receiving investment management rights, financial stability, and growth potential. For this reason, we strongly recommend seeking the assistance of a legal professional during the investment contract drafting and review stages. Legal expert consultation not only confirms that the clauses in the contract align with the company’s interests and strategy but also eliminates unfavorable factors to ensure stable business operations, playing a crucial role in that regard. Law firm Veat is highly regarded both domestically and internationally in the investment and M&A fields, based on its expertise and experience accumulated through numerous successful cases, and this achievement demonstrates a differentiated competitiveness even in precise tasks such as investment contract review. In particular, Law firm Veat holds a unique position in startup investment consulting, deeply understanding the special business models and industrial characteristics of startups, and providing customized legal services throughout the entire process, from initial investment to large-scale funding stages. Furthermore, Law firm Veat ranked among the top 10 domestically in terms of transaction volume, advising on 39 M&A transactions with a total value of approximately $119 million, as counted by Bloomberg in the cumulative M&A league table for the third quarter of the year. This wealth of experience and success stories have established Law firm Veat as a trusted legal partner in investment contract and investment consulting areas. As investment contracts are crucial documents that determine a company’s future, support from investment lawyers who have reviewed various investment scenarios can significantly contribute to a company’s long-term success. If you need help with investment contracts or investment legal consulting, please feel free to contact Law firm Veat. You can also find a case study of this case on the Law firm Veat blog below. - [Investment Firm] 3 Reasons Why a Legal Expert Should Review Your Investment Contract Thank you. Law firm Veat
[IT Law firm] Law firm Veat’s clear resolution case seen through software development contract termination cases
Law firm Veat received a request from a digital healthcare company (hereinafter "customer") to review the possibility of paying service fees upon termination of a development contract due to business suspension. The customer operated a business based on innovative technology in the digital healthcare field and was conducting a project through a software development contract. However, due to internal and external factors, the sustainability of the project became uncertain, and the customer was faced with the situation of considering contract termination. In this regard, the customer inquired about whether the software development contract could be terminated and whether there was an obligation to pay the remaining service fees after termination, and the scope thereof. Law firm Veat meticulously analyzed the development contract entered into by the customer. It reviewed the termination clause and payment clause specified in the contract, as well as the conditions applicable upon mid-term termination, to determine whether contract rescission (termination based on a termination cause specified in the contract) and statutory rescission (termination based on the Civil Law and related laws) were possible. Furthermore, Veat analyzed similar precedents to review the evaluation of completed deliverables and the obligation to pay for unfinished deliverables, which are key issues in software development contracts. In particular, it explained to the customer that, based on Supreme Court decisions, the obligation to pay the remaining service fees in a mid-term terminated contract may vary depending on the fault of the contractor and the special provisions in the contract. Why is a software development contract necessary? Software development projects are essential tasks in the IT industry, but there are cases where projects are suspended or contracts are terminated due to unforeseen circumstances. In this process, the legality of contract termination and the obligation to pay are a significant financial and operational burden on companies. To guarantee the success of the project and a stable legal relationship, a software development contract is an essential document. By clearly defining the rights and obligations between the developer and the client, the direction of the project can be established and unnecessary disputes can be prevented. Let’s examine the important elements and points to consider when concluding a software development contract. First, clearly setting the scope and objectives of the project is important. Specifically defining the purpose, functionality, and technical specifications of the software to be developed in the contract reduces discrepancies in expectations between the parties and prevents misunderstandings. In particular, to avoid conflicts due to requests for additional features or changes in the middle of the project, the initial scope should be clearly defined, and the procedure for handling additional requests should be included in the contract. Next, the development period and schedule should be clearly defined. The development schedule enables efficient time management for the project and prevents increased costs due to delays. The contract should specify the start and completion dates of development, and include measures to address delays or agreed procedures. Provisions for extensions in anticipation of unforeseen circumstances are important elements for ensuring the stability of project management. Also, the assignment of patent rights and other intellectual property rights must be clearly defined. Since software development has the nature of a creation, the contract must clearly define whether the copyright or patent rights for the deliverables are assigned to the client or remain with the developer. It is important to specify details such as the utilization rights for source code and development documents, and whether open-source is used. Payment terms should also be transparently organized. Payment terms and payment schedules are core elements of the contract, and failure to define them clearly can lead to financial disputes. For example, it is effective to specify payment procedures such as dividing payments into down payment, interim payment, and final payment, or setting payment conditions after the completion of specific development stages. Confidentiality and data protection provisions are also important. In the software development process, the client often provides or shares sensitive information. Accordingly, a confidentiality obligation should be established, and the confidentiality period and liability in the event of information leakage should be specified. This can protect the company’s important data and know-how. Finally, it is necessary to establish a dispute resolution procedure in advance. If unforeseen circumstances such as contract violations, schedule delays, or quality issues arise, clearly defining methods for resolving them in the contract can resolve disputes amicably. It is possible to save time and money by specifying which method to use, such as adjustment, mediation, or litigation, and specifying the jurisdiction or arbitration institution. However, each provision plays an important role in the process of concluding such a contract, so each provision must meet the legal requirements and be designed to protect the project in practice. In particular, software development contracts, with their technical characteristics and legal complexities, carry a risk of overlooking important issues or encountering problems if not reviewed by a professional. Therefore, it is desirable to conclude a software development contract with the help of a legal professional. Law firm Veat specializing in software and IT/new technology Law firm Veat has a deep understanding of legal issues in the IT field, such as software development, and is helping startups and IT companies by resolving various legal issues they may face. The lawyers of IT law firm Veat are positioned with experts in IT law, such as computer science and developers, and based on a deep understanding of technology, they quickly and accurately analyze complex problems faced by IT companies. They also possess leading expertise in legal issues related to cutting-edge technologies such as personal information protection, blockchain, and virtual assets. If you are concerned about software development contract termination or other IT legal issues, please contact Law firm Veat. The following is a case study of our services, which you can also confirm on the Law firm Veat blog. - [IT Law Firm] Solving Case with Software Development Contract Termination - Veat's Clear Solution Thank you. Law firm Veat
[IT Litigation] Software License Agreements: Guidelines to Check Before Execution
In the modern business environment, software has become an indispensable element. However, because users formally agree to the terms during the software usage process, they often overlook the importance of software license agreements. A software license agreement is an important contract that defines more than just usage rights for companies or individuals using software. It establishes the legal obligations and rights. In this column, we will explain the concept and importance of software usage permission agreements, and things to note when entering into a contract. What is a Software License Agreement? A software license agreement is a legal contract in which the software owner grants a specific user the right to use the software. The key point is that only the right to use is granted, not ownership of the software. Software is a copyrighted work protected by copyright law. Accordingly, a software license agreement is a form of copyright permission agreement, and users are granted the right to use only within the scope specified in the contract. Why is a Software Usage Permission Agreement Important? A software license agreement can specifically define the obligations and rights of both parties by clearly defining the scope of software use. Through the contract, the copyright holder can efficiently manage their copyright by including provisions such as granting exclusive usage rights or restricting modification and distribution of specific functions. In addition, the permitted region, usage period, and commercial/non-commercial usage purpose can be clearly defined. If the scope of use is not clear, there is a high probability of disputes between the software copyright holder and the user. A software usage permission agreement is an important tool to prevent such disputes and to make users aware of the clear scope of use. Things to Note When Entering into a Software License Agreement When entering into a software license agreement, you must clearly define the software usage rights and be sure to check whether the contract includes exclusive usage rights. Also, secondary rights such as modification and redistribution are often restricted, so you should also check whether you are granted these rights. It is also necessary to include a clause clearly defining the responsible party in the event of a dispute due to a breach of contract. Law firm Veat, Your Best Partner for Software Contracts Law firm Veat has lawyers with a deep understanding and extensive experience in the IT and software industries and provides legal review and consultation on various software-related contracts, including supply contracts, technology transfer contracts, and software license agreements. In particular, Law firm Veat is certified as an IT specialist lawyer by the Korea Bar Association, including Baek Seung-cheol, partner lawyer, IT specialist lawyer and former developer, proficient in both technology and law, and active as an open source software license specialist education instructor, An Il-woon, partner lawyer, and Choi Seong-ho, representative lawyer, who graduated from Seoul National University’s Department of Computer Science and provides legal advice optimized for IT, are all composed of specialized experts in the IT field. Law firm Veat, which has collaborated with a diverse range of clients from startups to large corporations and successfully resolved various legal issues such as software license agreements and copyright disputes, is providing practical legal advice based on practical experience to help protect the rights of our clients. If you need legal advice on software license agreements and copyright issues, please feel free to contact Law firm Veat. Thank you. Law firm Veat
[IT Litigation] What are the payment settlement criteria for software maintenance and development service contracts?
Software maintenance and development outsourcing contracts are commonly entered into in the IT industry, but disputes frequently arise when personnel designated to be deployed fail to meet the agreed number of working days or fail to comply with the contract terms. In particular, the specific facts related to the settlement criteria for outsourcing contract payments, such as whether the compensation for software maintenance contracts is calculated based on a 'functional point score system' or a 'calculation method based on the number and duration of deployed personnel (so-called M/M)', can significantly alter the nature of the dispute. The ruling in the case of Software Maintenance Outsourcing Compensation Refund (Seoul High Court, February 6, 1995. 2. 6. 선고 2013나2028481 판결) (hereinafter “this case”) is a useful example to refer to regarding the calculation of compensation in software outsourcing contracts. This column will examine the key issues and preventative measures for software maintenance and development outsourcing contracts based on the contents of this ruling. ▶ Calculation Method for Outsourcing Contract Payment The calculation method for outsourcing contract payment is broadly divided into two categories in software outsourcing contracts. 1. Functional Point Score System: This method calculates costs by measuring the size of software development using functional point scores and multiplying them by a unit price. 2. Calculation Method Based on the Number and Duration of Deployed Personnel (so-called M/M method): This method calculates compensation based on the number of deployed personnel and the duration of the work. The functional point score system is useful for determining maintenance costs based on the functional value of the developed software, but disputes may arise due to differences in interpretation of the definition or evaluation criteria for functions. The calculation method based on the number and duration of deployed personnel may result in disputes due to a lack of agreement between the parties regarding the number and duration of deployed personnel during the process of determining the contract amount. The key issue in this case was whether payments should be settled based on the actual number of working days in a software outsourcing contract entered into based on the calculation method based on the number and duration of deployed personnel. ▶ Background of the Case: Demand for Compensation Refund Due to Insufficient Working Days The IT company (Plaintiff) entered into an outsourcing contract to receive services for a specified period through a software maintenance contract. The contract amount was determined based on a deployed man-hour system, and compensation was paid monthly after reviewing the services provided. However, the Plaintiff subsequently claimed that some of the personnel deployed by the Defendant worked less than the average number of working days for software technicians (based on the standard set by the Korea Software Industry Association) and demanded a refund of the outsourcing compensation for the shortfall in working days. ▶ Court's Ruling: The Court rejected the Plaintiff's claim for refund, finding that the contract in this case was calculated based on a deployed man-hour system at the time of contract conclusion, and there was no agreement included to subsequently settle payments based on actual working days. Furthermore, the Court found that there was no provision in the contract to reduce or refund compensation if the number of working days was insufficient, and that software outsourcing work is a specialized work of great importance to the quality and continuity of results, and that adjusting compensation based solely on the number of working days would be inappropriate. Furthermore, the Court found that there was no basis for retroactively claiming a refund because the Defendant has received compensation through monthly review confirmation and the Plaintiff has not raised the issue of working days at the time. Finally, the Court found that the input man-hour system used for calculating contract amounts is used as a tool for calculating contract amounts, but not for settling payments in the process of providing services or subsequent settlements according to the concluded contract. ▶ Precautions When Entering into Software Maintenance and Development Outsourcing Contracts This case ruling provided specific implications for both IT companies and software development firms regarding the importance of clearly defining contract conditions and reflecting them in the contract. Specific Stipulation of Contract Conditions: The contract should specifically stipulate the number of deployed personnel, working days, scope of work, calculation method for compensation (functional point score system or deployed man-hour system), and whether subsequent settlement is possible to minimize the possibility of disputes. Consideration of the Nature of Software Outsourcing Work: Software maintenance is not merely about working hours, but about maintaining system stability and quality, so contract conditions should be set taking this characteristic into account. Addition of Penalty and Compensation Clauses: Include penalty or damages clauses that will be applied if the contract conditions are not met to clearly define responsibility. This makes it possible to respond quickly and clearly even in unforeseen situations. Importance of Record Keeping and Communication: It is necessary to keep records of all communications and work results throughout the contract implementation process and regularly confirm consultations between the parties. This record is a powerful tool to prevent disputes. Software maintenance and development outsourcing contracts require technical understanding and legal knowledge, so we recommend that the contract content should be defined based on the review of an IT specialized attorney with high IT understanding from the contract drafting stage, and if a dispute arises, you should respond quickly. Law firm Veat provides differentiated legal services centering on IT specialized attorneys certified by the Korea Bar Association and attorneys from technical backgrounds, simultaneously understanding 'IT/Technology' and 'Law'. If you need help with drafting software maintenance and development outsourcing contracts and responding legally to related disputes, please feel free to contact Law firm Veat. Thank you. Law firm Veat
Electronic Financial Transaction Terms and Conditions, Core Guide for Prepaid Electronic Payment Service Operation
Law firm Veat received a request from Welfare Mall A (hereinafter "the client") to review the terms and conditions necessary for electronic financial transactions registration. Electronic financial transactions have become an essential element of business operations in modern society. In particular, companies issuing and managing prepaid electronic payment instruments must strictly comply with electronic financial transaction laws. Such compliance is not merely an obligation but a cornerstone for securing consumer trust and ensuring the sustainability of business. Law firm Veat reviewed the legality and appropriateness of the electronic financial transaction terms and conditions, considering the Electronic Financial Transactions Act, the Act on Regulation of Standard Contract Terms, the attitude of the Fair Trade Commission and the Financial Supervisory Service/Financial Services Commission, and guidelines from the relevant government authorities. Why is a review of terms and conditions for electronic financial transaction registration necessary? Electronic financial transactions differ from general financial transactions because they are conducted through online platforms, so the legal system governing them has a special nature distinct from traditional financial law. In particular, the Electronic Financial Transactions Act and the Act on Regulation of Standard Contract Terms (hereinafter "Standard Contract Terms Act") provide important legal standards that companies must consider when entering into contracts with users. Registration for electronic financial transactions is only possible if certain legal requirements are met, and the preparation of terms and conditions is essential. The terms and conditions for electronic financial transactions clearly define the nature and conditions of the service provided to users and are key elements in establishing the legal responsibility and obligations of the company. If these terms and conditions are poorly prepared or do not adequately reflect relevant laws, it may lead to problems during the registration process, as well as subsequent consumer disputes or sanctions from regulatory authorities. Review of electronic financial transaction terms and conditions The prepaid electronic payment instruments (e.g., prepaid cards, welfare points, etc.) provided by the client must meet specific legal requirements under the Electronic Financial Transactions Act and its enforcement regulations. For example, the provision of protective measures for prepaid charges is an important provision included in the revised Electronic Financial Transactions Act and its enforcement regulations. Law firm Veat thoroughly reviewed the client's electronic financial transaction terms and conditions to ensure they do not violate the Electronic Financial Transactions Act and the Standard Contract Terms Act, considering these legal requirements. 1. Analysis based on the Electronic Financial Transactions Act and the Standard Contract Terms Act The most important part of reviewing the client’s electronic financial transaction terms and conditions is to ensure that the terms and conditions strictly comply with the provisions of the Electronic Financial Transactions Act and the Standard Contract Terms Act. Law firm Veat analyzed the key provisions of the Electronic Financial Transactions Act and the Standard Contract Terms Act and reviewed the legality of the terms. In particular, the regulations related to the protection of prepaid charges are important in the issuance and management of prepaid electronic payment instruments. The revised Electronic Financial Transactions Act and its enforcement regulations clearly outline measures to strengthen the safe management and protection of prepaid charges. With this in mind, we supported the client’s prepaid electronic payment instrument operations to ensure they are conducted legally. 2. Considering guidelines from government agencies and relevant authorities Electronic financial transaction terms and conditions must adequately reflect the guidelines issued by major regulatory agencies, such as the Fair Trade Commission, the Financial Supervisory Service, and the Financial Services Commission. During the review process for electronic financial transaction registration, Law firm Veat analyzed these guidelines and the attitude of the agencies to ensure that the client was not exposed to legal issues and provided suggestions to strengthen the appropriateness of consumer protection clauses and transaction transparency within the terms, so that the terms would meet the requirements of the regulatory agencies. 3. Protection of prepaid charges and review of terms and conditions Protecting the prepaid charges of users is important in the issuance and management of prepaid electronic payment instruments. This is not merely a matter of legal compliance, but also a key factor in securing consumer trust and strengthening the company's market competitiveness. Reviewing the terms and conditions with a focus on consumer protection, legal stability, and establishing a transparent operating system is necessary to strengthen the protective measures for prepaid charges. It is necessary to clearly define the conditions and procedures for charge refunds to reduce consumer inconvenience and revise the clauses to be consistent with the Electronic Financial Transactions Act and the Standard Contract Terms Act to minimize the risk of legal disputes. Furthermore, it is important to increase the transparency of operations by strengthening the obligations to provide information and notifications, so that users can easily check their transaction history and the status of their charge protection. Law firm Veat reviewed the client’s electronic financial transaction terms and conditions to ensure they do not violate the Electronic Financial Transactions Act and the Standard Contract Terms Act, considering the revised Electronic Financial Transactions Act and its enforcement regulations regarding prepaid charge protection, and provided advice. Law firm Veat carefully reviewed whether the electronic financial transaction terms and conditions prepared by the client complied with legal requirements, especially whether they adequately reflected the positions of the Fair Trade Commission, the Financial Supervisory Service, and the Financial Services Commission. During this legal review process, we ensured that the terms did not impose unfavorable conditions on consumers or include unfair provisions prohibited by law. Law firm Veat provides customized solutions based on in-depth review and years of practical experience in the electronic financial transaction field, providing a clear understanding of the complex regulations of the Electronic Financial Transactions Act. In particular, we design the legal structure necessary for operating electronic platforms, including prepaid electronic payment instruments, and provide practical advice for regulatory compliance, supporting the stable growth of companies. This enables companies to prevent unnecessary legal risks and establish a legal basis for strengthening their competitiveness in the market. If you need help with legal issues related to electronic financial transactions and the issuance and management of prepaid electronic payment instruments, please feel free to contact Law firm Veat. The case study mentioned here can also be found on the Law firm Veat blog. - Key Guide for Electronic Financial Transaction Terms and Conditions, Operation of Prepaid Electronic Payment Instruments Thank you. Law firm Veat
Platform service web scraping, how far is legal?
Law firm Veat received a request from a startup (hereinafter referred to as "the client") whose main business is shopping and logistics management, and performed a service legality review using a web scraping method. In the modern business environment, platform-based services are playing an increasingly important role. Especially, data-based service provision has become a key element that determines a company's competitiveness, and managing legal risks in the data utilization process must also accompany it. The case of Law firm Veat introduced today is about reviewing the legality of services that collect and utilize data through a Web Scraping method and effectively managing risks. What is Web Scraping? Web scraping is a type of data scraping used to extract data from websites. In other words, it refers to a program designed to analyze the HTML document of an internet web page and extract only the data with specific patterns from the data on that web page. This web scraping is utilized in areas that require automatically collected specific information. For example, in the financial market, scraping technology is used to collect news information and investment information, and in the platform market, it helps to quickly grasp various market information. Things to be aware of when Web Scraping The client intended to utilize the aforementioned web scraping method to provide a service that allows users to view various information, such as order history, on a single platform, providing the platform it provides. However, web scraping is not just a technical issue but a field where legal regulations are complexly intertwined. In particular, when adopting a web scraping method, the following points need to be noted. 1) Copyright Infringement The “Copyright Act” protects the copyright of the author by stating that the author has copyright personality and copyright property rights (Article 10, Paragraph 1). Therefore, if the content of the website being scraped is protected by copyright, unauthorized collection and utilization of it through web crawling or web scraping may cause problems such as infringing the copyright of a third party, so caution is required. 2) Violation of the Information and Communications Network Act According to the “Act on Promotion of Information and Communications Network Utilization and Information Protection” (hereinafter “the Information and Communications Network Act”), no one shall access or invade an information and communications network without proper access rights or exceeding authorized access rights (Article 48, Paragraph 1). Therefore, depending on the specific case, web crawling or web scraping of a website may cause problems with violation of the Information and Communications Network Act if it bypasses the website’s security system or is carried out without proper access rights. 3) Violation of the Unfair Competition Prevention Act The “Act on Prevention of Unfair Competition and Protection of Trade Secrets” (hereinafter “the Unfair Competition Prevention Act”) regulates acts that unfairly use another party’s achievements resulting from substantial investment or effort in a manner contrary to fair trade practices or competition order to one’s own business and infringe on the economic interests of the other party (Article 1, Sub-paragraph (F), Paragraph 1). Therefore, utilizing a competitor's data or business model obtained through web scraping may be deemed an act of unfair competition. 4) Crime of Obstructing Business by Damaging Computer, etc. The “Criminal Act” stipulates that anyone who damages a computer or other information processing device or electronic record or enters false information or irregular commands into an information processing device or causes disruption to information processing by other means and thereby obstructs the business of another shall be subject to criminal punishment (Article 154, Paragraph 2). Therefore, if web scraping generates excessive traffic or disrupts the normal operation of the target server, criminal responsibility may be an issue. 5) Violation of the Personal Information Protection Act Except for special circumstances, consent from the information subject must be obtained before collecting and using personal information (Article 15, Paragraph 1, Sub-paragraph 1, Paragraph 1 of the Personal Information Protection Act). Therefore, if personal information is included in the data being scraped, the act of unauthorized collection and utilization of it may be in violation of the “Personal Information Protection Act”. Law firm Veat’s Systematic Legal Advisory Services As web scraping may violate various laws, a thorough review by a legal expert is necessary for stable business operation. Law firm Veat, based on its expertise in web scraping-related legal matters, not only pointed out problems in the client's business model but also provided specific guidelines to reduce legal risks. Through this legal support optimized for the client's business model, the client was able to maintain the competitiveness of services based on legal data utilization. In addition, the client was able to identify vulnerabilities in the business model and establish specific measures and operating plans to prevent potential problems that may arise during subsequent service operation. Law firm Veat with IT Expertise IT-specialized Law firm Veat provides solutions to effectively resolve complex legal problems based on its years of experience and expertise in the IT and startup legal advisory field. It provides services specializing in legal advisory related to data utilization, personal information protection, and platform business, and supports successful operation and growth by providing customized legal advisory services necessary for the client's current situation. Need Legal Advice? To ensure the success of a business that utilizes data, it is important to secure not only the technology but also legal stability. Law firm Veat is helping clients achieve their business goals by resolving various legal problems that may arise in the data utilization process, as in this case. If you want to reduce legal risks and operate a safe business by utilizing data through web scraping and web crawling, please contact Law firm Veat now. IT and startup legal experts will be your reliable partners for your success. The following is a case study of this service which can also be found on the Law firm Veat blog. - Is Web Scraping Legal? Thank you. Law firm Veat
Inter-affiliate transactions, what are the strategies to minimize legal risks? - Fair Trade Act Law firm Veat
Law firm Veat received a request from Kosdaq-listed company A (hereinafter "the client company") to conduct a legal review of transactions between affiliates. Inter-affiliate transactions are very common in the business operating process. However, if these transactions are deemed to violate the "Act on the Promotion of Fair Competition and Consumer Protection" (hereinafter "Fair Competition Act") or are considered tax evasion, they can lead to substantial legal and financial risks for the company. Law firm Veat reviewed the client company’s transactions between affiliates for compliance with the Fair Competition Act and related laws and suggested measures to minimize legal risks. Regulation of Transactions Between Affiliates and the Fair Competition Act 1. Regulation of Improper Support Acts in the Fair Competition Act The Fair Competition Act is a law that regulates the actions of companies to ensure fair competition in the market. In particular, Article 45(1)(9) of the Fair Competition Act prohibits providing support in unfairly favorable terms in transactions between special relationship parties (i.e., affiliates). Such ‘improper support acts’ can distort market competition, provide excessive benefits to specific companies, and negatively affect general consumers or the market as a whole. 2. Regulation in the "Inheritance and Gift Tax Act" (hereinafter "Gift Tax Act") If assets are transferred at a price lower than the market value or sold at a price higher than the market value between special relationship parties, and the difference between the price and the market value exceeds the standard amount stipulated by Presidential Decree (hereinafter “standard amount”), the date of acquisition or sale of the assets shall be treated as the date of gift, and the amount of the difference between the price and the market value, less the standard amount, shall be treated as the gift property value of the party who obtained the benefit, and gift tax shall be imposed. According to Article 35(1) of the Gift Tax Act, the difference between the price and the market value, less the standard amount, is deemed the gift property value and is subject to gift tax. 3. Regulation in the Corporation Tax Act Paragraph 1 of Article 52 of the Corporation Tax Act stipulates that if the actions or income calculation of a domestic corporation is recognized as reducing the corporation's tax burden through transactions with special relationship parties, the actions or income calculation of the corporation shall be regarded as an improper calculation. Law firm Veat's Review of Inter-Affiliate Transaction Risks Law firm Veat thoroughly reviewed the inter-affiliate transactions the client company intended to undertake to support them in avoiding legal risks. ※ Review of the Fairness of Transaction Conditions We confirmed whether the client company’s transaction conditions were consistent with those generally prevailing in the market. This is a key procedure to simultaneously satisfy the requirements of the Fair Competition Act and the gift tax requirements of the Gift Tax Act. ※ Analysis of Detailed Requirements of Related Laws We thoroughly reviewed the provisions of the Fair Competition Act and related laws to determine whether the client company’s specific transaction structure complied with those laws. This allowed us to preemptively block the possibility of legal violations. ※ Suggesting Alternatives If part of the transaction structure had the potential to cause legal problems, we suggested structures that could supplement or replace it. This allowed the client company to maintain its business objectives while minimizing legal risks. Inter-affiliate transactions are an essential strategy for business management, but they are subject to strict legal regulations, including the Fair Competition Act, Inheritance and Gift Tax Act, and Corporation Tax Act. If deemed improper support acts, sanctions such as fines and corrective orders may be imposed, affecting tax risks and corporate credibility. In particular, the legal environment related to the Fair Competition Act is constantly changing, so companies should pay attention to the latest regulatory trends and prepare for rapid legal response through advice from legal professionals. Law firm Veat helps clients facing legal risks in inter-affiliate transactions by thoroughly reviewing them and suggesting necessary measures for compliance with the Fair Competition Act and related laws to establish a transparent transaction structure. This allows clients to prevent investigations by regulatory authorities, resolve legal uncertainties, and establish a foundation for stable business operations. Thorough prior review and legal advice demonstrate that they are essential strategies for companies to systematically manage potential problems and achieve stable growth. Law firm Veat provides efficient and professional legal advice not only through one-off legal consultation but also through regular legal counsel services and membership programs for clients who need regular legal consultation. If you need a legal review related to inter-affiliate transactions, please contact Law firm Veat. Law firm Veat's expertise and experience will be a solid foundation for your company's successful business operations. This case study can also be viewed on the Law firm Veat blog below. - Inter-affiliate transactions, strategy to minimize legal risks - Fair Competition Act Law firm
[202501] Monthly Veat January Issue_Law: Changes Brought by the AI Basic Act
Law firm Veat Law firm Veat can be your optimal partner for successful US investment and business expansion. We provide professional services in various fields such as legal advice, tax advice, real estate investment, company establishment, visa, and trademark registration related to US investment and business expansion. Law firm Veat has a team of US legal and tax experts and provides customized solutions tailored to the needs of our clients. Contact us now to take the first step towards successful entry into the US. Veat will help your success. Law firm Veat
[IT Litigation] AI Image Output Copyright Judgment Criteria from A to Z
Recently, there has been an explosive increase in AI-generated image cases using AI services such as Chat GPT and Fotor. These images, created through AI, are utilized in various fields such as design, marketing, and content creation, appearing in forms like advertising, product design, and website images, and provide significant advantages in terms of time and cost for businesses.
Overseas investment and subsidiary establishment, systematic support from Law firm Veat
Law firm Veat received a request from domestic company A (hereinafter “the client”) and Law firm Veat reviewed the foreign exchange transaction reporting required for establishing an overseas subsidiary and analyzed the required documents and procedures to guide simplification measures. As the client planned to establish an overseas subsidiary, Law firm Veat closely coordinated with the client and clearly organized the list of documents, procedures, and reporting requirements to guide them. This supported the client by minimizing their time burden and administrative difficulties. Furthermore, when establishing an overseas subsidiary in the form of a joint investment with a third party, the third party's investment source and equity structure could significantly impact the reporting requirements due to the nature of the joint investment. Accordingly, Law firm Veat foreign exchange reporting attorneys meticulously analyzed the investment structure and proposed the optimal investment method to simplify the reporting procedure. They also guided the documents that may be required during the reporting process and analyzed the reporting requirements that may arise depending on the investment structure. By Law firm Veat Foreign Exchange Reporting Center conducting all procedures in a one-stop manner, we helped the client achieve their business goals while complying with domestic and international regulations.