Case Studies
Business transfer contracts, easily missed legal points.
Law firm Veat drafted a sales and purchase agreement at the request of a cosmetics brand company (hereinafter referred to as the “client”). The client intended to reorganize its business structure by transferring its unique cosmetics brand to a related company within the group. To this end, it decided to transfer the brand and related assets and personnel through a sales and purchase method. The client requested legal advice as to whether assets could be transferred at their book value (the asset valuation amount according to accounting principles). Accordingly, Law firm Veat reviewed various laws and regulations, including tax laws, the Commercial Code, and the Act on Fair Trade (hereinafter referred to as the “Fair Trade Act”), to analyze whether the transfer at book value was lawful. Furthermore, since a sales and purchase is not simply the transfer of assets but should focus on maintaining the continuity and stability of the existing business, Law firm Veat prepared clauses to ensure that the transfer of business rights and the succession of employment were carried out with legal stability. What is a Sales and Purchase Agreement? A sales and purchase agreement is a contract intended to transfer all or part of a specific business (operation). Here, "operation" encompasses not only the act of producing or providing goods or services, but also the physical and human assets, trading relationships, brand value, and the entire operation. Therefore, it does not simply transfer goods or assets, but transfers the entirety of rights and obligations associated with the operation. This includes, for example, physical assets such as equipment and inventory, as well as intangible assets such as business rights, brand, customer information, and know-how, as well as all business activities, including transactions with suppliers and employment contracts. Key Considerations Requiring Careful Review in Sales and Purchase Since a sales and purchase is intended to continuously operate the existing business, maintaining relationships with customers and suppliers, and utilizing the existing brand are important factors. A sales and purchase agreement generally includes clauses regarding the transferrable assets, purchase price, succession of receivables and payables, treatment of employment relationships, confidentiality and non-competition clauses, and the conditions and procedures of the contract. The possibility of disputes or misunderstandings increases if the items included and excluded from the transferrable assets are not clearly defined. Furthermore, according to Article 207 of the Commercial Code, unless there is a special agreement, the assignee may be responsible for the assignor's existing liabilities. This could lead to unexpected financial burdens, so a clear agreement on debt succession is important. Thirdly, when transferring a business, it is necessary to clearly specify whether the existing employees will be succeeded, in compliance with the Labor Standards Act. Failure to properly handle this may lead to legal disputes or damage to the company’s image. Fourthly, a sales and purchase involves the sharing of sensitive business information and know-how, making confidentiality and non-competition clauses essential. Finally, it is also important to create specific and realistic contractual terms to increase the enforceability of the contract. As sales and purchase agreements involve various legal, financial, and operational risks, it is essential to prepare for them comprehensively and to conduct legal advice from a legal expert before and during the process to ensure a safe and efficient transaction. Sales and Purchase Legal Partner, M&A Specialized Law Firm Veat Law firm Veat provides customized legal advice based on the experience accumulated in handling various industries' M&A and sales and purchase cases. A sales and purchase involves various laws and regulations such as the Commercial Code, tax laws, and the Labor Standards Act, making collaboration among experts in various fields essential. Law firm Veat utilizes its internal network of experts to approach the matter from multiple angles and provides optimal legal advice. In particular, it thoroughly reviews potential legal risks from the drafting stage of the contract to provide efficient legal advice services that allow the client to focus on their business without worrying about legal problems. This legal advice experience demonstrates the expertise of Law firm Veat, which can be effectively utilized in complex contracts such as M&A and sales and purchase. If you are struggling with legal issues such as comprehensive sales and purchase, please feel free to contact Law firm Veat. The following is a case study related to this matter, which can also be checked on the Law firm Veat blog. - Sales and Purchase Agreement, Easily Missed Legal Points Thank you. Law firm Veat
[Law firm Veat TIP] The reason Seo Taiji’s “Come Back Home” parody isn’t allowed.
Law firm Veat’s TIP(Technology Intellectual Property) team has contributed detailed information on the concept and issues of personality rights in copyright, using the example of Seo Taiji’s “Come Back Home” parody, to Platum, a specialized media platform for startups. The importance of legal protection related to copyright is gradually increasing in various contents such as music, movies, dramas, and games. In this column, we explained the concept and characteristics of personality rights in copyright. Also, we introduced the major right of publicity, right of attribution, and right of integrity, and discussed in depth the specialty of personality rights recognized only for copyrighted works and the necessity of legal protection. [This link] allows you to view this column. The column posted by Law firm Veat’s TIP team provides useful information to prevent legal disputes that may arise during the content creation process and to ensure that creators fully protect the value of their works, based on actual litigation cases. Copyright issues require various interpretations and criteria for each case, so it is important to find a balance between protecting and utilizing creations. In particular, it is necessary to be familiar with the procedures and countermeasures needed to protect legal rights when unauthorized use or unwanted alteration of creations occurs. This allows you to protect the value of creations and protect them from unexpected problems.
Frequently overlooked registration details at the company, "Representative Director Address Registration".
Law firm Veat successfully handled the registration of a change of address for the CEO at the request of startup Company A (hereinafter referred to as "the client"). The client failed to register the change of address of the CEO in a timely manner, resulting in the inability to receive legal notices sent to the registered address and consequently missing important deadlines. During this process, they belatedly realized that a change of address registration of the CEO was required and requested legal advice and filing procedures from Law firm Veat. Law firm Veat thoroughly guided the client on the procedure for changing the corporate registration and proceeded with the registration process quickly to prevent additional legal disadvantages. One of the legal obligations that every representative running a company must know is the registration of a change of address of the CEO. This is often overlooked because representatives mistakenly believe that only changes to the company are registered on the corporate registration certificate and that the representative’s address change is not something that needs to be registered.
SAFE investments foreign currency transaction reporting review to reporting agency, please check the precautions.
Law firm Veat received a request from a domestic investment firm A (hereinafter referred to as "the client") regarding the SAFE investment in an overseas corporation, and proceeded with foreign exchange transaction reporting (securities acquisition reporting). The "Foreign Exchange Transactions Act" requires a proper foreign exchange transaction reporting procedure for investments in overseas corporations and the acquisition of shares. Especially SAFE investments have the potential to be converted into shares in the future, so it is necessary to thoroughly review the contract terms at the initial investment stage and proceed with foreign exchange transaction reporting based on this. Law firm Veat thoroughly analyzed the draft investment contract and provided a one-stop service, from reviewing the necessity of foreign exchange transaction reporting to handling the reporting itself. What is a SAFE investment? SAFE (Simple Agreement for Future Equity) investment is a revolutionary investment method that attracts attention in the startup ecosystem. It is an investment method where investors provide funds and have the right to convert them into shares in the future, based on trust between early-stage companies and investors. It is mainly used when it is difficult to evaluate the corporate value of early-stage startups. SAFE contracts have the advantage of not having to go through a complicated corporate valuation process, and the contract terms are relatively simple, allowing capital to be raised quickly without complex procedures. Moreover, the funds raised through SAFE investments are free from interest or repayment obligations, which is a great help to startups in maintaining liquidity in the early stages. However, legal review and thorough reporting procedures are essential for SAFE investment processes. If a SAFE investment is made in an overseas corporation, an obligation to report capital movement arises pursuant to the Foreign Exchange Transactions Act, and domestic regulations must be strictly adhered to in all processes, including overseas remittances, fund movements, and share conversions. Especially, foreign exchange transactions and securities acquisition reporting are important legal requirements, and failure to omit or improperly handle them may result in sanctions from the Financial Supervisory Service, so advice from a legal expert is essential. In addition, it is necessary to strictly comply with the laws of the investment target country as well as domestic laws to accurately proceed with the reporting procedures to eliminate legal uncertainty and secure legal protection for both investors and startups. Key considerations for the foreign exchange transaction reporting process following a SAFE investment * Investment amount and subsequent investment conditions It is important to clearly define the conditions for subsequent investments along with the investment amount. In a SAFE contract, investors agree in advance on the timing and conditions for conversion into shares, so this information must be clearly stated in the reporting process. * Pre-investment company value cap and discount rate SAFE contracts generally include a pre-investment company value (Cap) and a discount rate (Discount Rate). These values serve as the criteria for determining the share price at the time the investor acquires shares, so they must be mandatory in foreign exchange transaction reporting. * Liquidation and dissolution events The amount and method of payment to the investor in the event that the investment target corporation is liquidated or dissolved were also reviewed. SAFE contracts are designed to protect investors in such situations, so the relevant information should be detailed in the application form. * Subsequent Reporting If the conditions for conversion into shares are met pursuant to the SAFE investment contract, this will be considered as new securities acquisition, and additional reporting procedures will be required. In particular, if Equity Financing or Valuation Cap conditions are met and shares are converted, securities acquisition reporting is mandatory in addition to foreign exchange transaction reporting. In this process, it is necessary to thoroughly review the relevant information from the beginning of the contract and prepare the application form to prevent risks that may arise later. SAFE contracts may seem simple at the early stage, but in reality, it is very important to clearly understand the meaning of the detailed provisions and subsequent procedures. It is essential to be aware of the legal obligations that may arise after the contract is concluded and to prepare for them. Law firm Veat has thoroughly reviewed key conditions such as investment amount, subsequent investment conditions, company value cap, and discount rate in relation to SAFE contract conclusion, and systematically managed legal requirements such as foreign exchange transaction reporting and securities acquisition reporting based on this. In particular, it has prepared in advance for additional reporting procedures that may arise when converting into shares pursuant to the SAFE contract to minimize legal risks and establish a stable legal foundation in the investment process. Furthermore, it has swiftly supported a smooth SAFE investment process that both investors and investees are satisfied with by systematically proceeding with all processes from drafting the contract to managing the reporting procedures. Law firm Veat is a startup and investment specialized law firm that provides rapid and accurate legal services throughout the entire process, from complex SAFE investment contracts to foreign exchange transaction reporting and securities acquisition reporting. It has demonstrated expertise in complex investment structures such as M&A, venture capital, and blockchain investments, particularly being ranked 7th in the Bloomberg league table of legal advisors in M&A in the 4th quarter of 2024, and is committed to helping our clients succeed. If you need legal advice on SAFE investments, foreign exchange transaction reporting, or securities acquisition reporting, please feel free to contact the Foreign Exchange Reporting Center of Law firm Veat. Thank you. Law firm Veat
Method of drafting a commodity purchase agreement, Case of drafting a new commodity purchase agreement after termination of an exclusive distribution agreement
Law firm Veat received a request to review the purchase agreement from Company A, a manufacturer and distributor of health foods (hereinafter "the client"), regarding a product purchase agreement with an overseas entity. Because the client's exclusive distribution agreement with the counterparty was terminated, the client requested a review of the product purchase agreement in order to resell the previously secured inventory to the overseas entity. Law firm Veat focused on thoroughly analyzing and preventing potential legal risks that could arise in the process of concluding a new product purchase agreement after the termination of the client’s exclusive distribution agreement. Particularly, it aimed to block the possibility of disputes with third parties due to the termination of the existing agreement, clearly define the rights and obligations between the parties, and minimize the client’s legal risks through indemnity clauses, providing legal advice. Product Purchase Agreement A product purchase agreement is a legal document that defines the terms of trade between a buyer and a seller, ensuring a stable and trustworthy transaction. Especially in global transactions, it is essential to harmonize customary practices and cultural differences and minimize unforeseen risks. It aims to prevent legal disputes, secure stability, strengthen trust, and manage risk, and defines the rights and obligations of the contracting parties, complying with national laws and international norms, to form a long-term partnership. Clear contract clauses in a product purchase agreement contribute to building trust with the counterparty and increasing the possibility of a long-term partnership. Furthermore, including indemnity or warranty clauses can prepare for unexpected losses or disputes that may arise during the transaction. The role of this agreement goes beyond a simple record of transactions, acting as a key element in creating a stable and trustworthy business environment. Points to Consider When Drafting a Product Purchase Agreement When drafting a product purchase agreement, you must thoroughly consider terms of trade, liability, dispute resolution, and legal review. While product purchase agreement templates are relatively easy to find, it is necessary to reflect the detailed content of the transaction (rights, obligations, conditions, and liability of the parties) in the agreement rather than simply using a template. In particular, it is essential to specify concrete terms such as quality standards, shipping conditions, and payment terms. It is also important to clearly define the allocation of responsibility for damages or defects that may occur after delivery of the goods, and to include a clause stating that the seller is responsible for defects in the goods unless the defect is caused by the buyer's fault. To prepare for disputes, specify the applicable law and jurisdiction, and for international trade, include an arbitration clause for prompt dispute resolution. Finally, it is essential to fully understand the laws and practices of the country the counterparty is located in, and in the case of overseas entities, to review the validity of the agreement in accordance with local regulations. To prevent potential legal issues that may arise due to the termination of the client’s exclusive distribution agreement, Law firm Veat carefully reviewed the essential clauses that should be included in the agreement. In particular, it focused on preventing the newly concluded agreement from conflicting with or resembling similar agreements with third parties and clearly defining the rights and obligations relationship between the client and the overseas entity. Law firm Veat's Points for Drafting a Product Purchase Agreement - New Contract Structure Due to Contract Termination Based on the fact that the existing exclusive distribution agreement has been terminated, a clear contract structure was designed between the client and the overseas entity. In particular, it identified and prevented potential problems that may arise from the possibility that the product purchase agreement counterparty would enter into a new exclusive distribution agreement with a third party. - Specification of Contractual Rights and Obligations The overseas entity’s rights and obligations relationship was clearly defined to minimize the client’s legal responsibility for damages that the client may have to bear due to the counterparty's fault. The client was protected by including a clause exempting the client's liability if the overseas entity raises a claim related to the termination of the exclusive distribution agreement. - Minimizing Legal Risks Through Indemnity Clauses It states that the client will not be responsible for any responsibility if quality problems, distribution problems, etc. arise from the goods provided by the client, as long as the client is not at fault, and added a clause to minimize the client's liability if the counterparty or a third party takes legal action related to the termination of the exclusive distribution agreement. Through this indemnity clause, the client minimized legal risks and established a foundation for conducting business stably. Law firm Veat has extensive experience in reviewing and drafting contracts for global companies. Based on its high expertise in international trade law, contract law, and IT law, Law firm Veat supports global companies in complex international transaction agreements such as exclusive distribution agreements, product purchase agreements, and technology license agreements, clearly defining trade conditions, dispute resolution procedures, and liability scope. Also, in global contracts, such as product purchase agreements written in English, even minor communication differences in language can result in contract terms that are not what was intended, which can lead to major disputes in the future. Law firm Veat provides efficient and professional advice through direct contract review by foreign attorneys. As a trusted partner providing a legal safety net in the global market, Law firm Veat promises efficient legal support for the client’s international transactions. If you need legal advice on global agreements such as product purchase agreements, please feel free to contact Law firm Veat. This case study can also be viewed on Law firm Veat’s blog. - How to Draft a Product Purchase Agreement, Case of Drafting a New Product Purchase Agreement After Termination of Exclusive Distribution Agreement Thank you. Law firm Veat
Analysis of Asset Purchase Agreement for Startups [Law firm Veat]
Law firm Veat received a request from a 3D work manufacturer and seller (hereinafter referred to as "the client") to draft an asset transfer contract and review the procedures necessary for the asset transfer. The client wanted to acquire assets from other sellers listed on its platform and commissioned Law firm Veat to draft the asset transfer contract and review the legal procedures. Law firm Veat systematically drafted the asset transfer contract by analyzing the client's services. In particular, it clearly stipulated the transfer conditions for intellectual property rights, including copyright and trademark, to strengthen the legal protection of digital assets and to prevent potential disputes. According to Article 404(3) of the Commercial Code, if a company acquires all or part of the business of another company, a special resolution of the shareholders' meeting is required. We reviewed whether this asset acquisition falls under this provision, whether additional resolutions are necessary for the asset acquisition, and other necessary legal procedures, and provided detailed guidance to the client. What is an asset transfer contract? An asset transfer contract is a transaction in which specific assets or business divisions are transferred to another company, and is a form of merger and acquisition (M&A). Through asset transfer contracts, companies can focus on core competencies or pursue expansion into new business areas. A key element of an asset transfer contract is the clear definition of the target assets. The type and scope of the assets to be transferred must be clearly stated to define the subject of the transaction. Also, it is important to clearly state the transaction conditions such as price, payment method and transfer schedule to ensure agreement between the contracting parties and reduce the possibility of disputes. Furthermore, statements and warranties should be included to guarantee trust for both parties' rights and obligations and matters related to the transaction. An asset transfer contract is the cornerstone of the transaction and requires careful review and negotiation. A contract with clear provisions and well-organized obligations of both parties guarantees the legal safety of the transaction and plays an important role in preventing potential disputes. Therefore, companies considering asset transfers should cooperate with experienced legal professionals in asset transfer cases to enhance the completeness of the contract and minimize risks throughout the entire transaction. Legal Partner for Startups, Startup Law firm Veat Startups can face various legal challenges from the very beginning. Like this case, legal procedures related to asset transfers, drafting and review of contracts, as well as investment attraction, service regulation legal review, intellectual property rights management, and other continuous and professional legal advice are necessary. In this process, Law firm Veat’s startup regular advisory service can be a great help. Regular advisory allows startups to receive continuous legal support as if they had an in-house lawyer. This allows companies to quickly identify and resolve potential legal risks in the decision-making process and establish a solid legal foundation for business expansion. Especially in a rapidly changing environment like startups, Law firm Veat’s expertise serves as a legal safety net for our clients. If you need an asset transfer contract review and startup regular advisory services, please contact Law firm Veat at any time. This case study can also be viewed on Law firm Veat’s blog below. - Asset Transfer Contract Analysis that Startups Should Know [Startup Law firm Veat] Thank you. Law firm Veat
[Virtual Asset Lawyer] Find out everything at once, from the meaning of a virtual asset business operator to judgment criteria, unreported risks, and countermeasures.
Virtual assets are assets transferred and stored digitally based on blockchain technology, and virtual asset businesses are entities that operate by providing services such as transactions, sales, purchases, and custody management using them. Currently, the definition of a virtual asset business is stipulated in the 「Act on the Protection of Virtual Asset Users, etc.」(hereinafter referred to as the “Virtual Asset User Protection Act”). Definition and Judgment Criteria for Virtual Asset Businesses Recently, the Supreme Court issued an important ruling clarifying the judgment criteria for whether an entity is a virtual asset business. (Supreme Court Case No. 2024Do 10710) When judging whether a virtual asset business is involved in virtual asset trading as a business, it is deemed a business if, for example, they trade virtual assets for the benefit of an indefinite number of customers or users and receive compensation, and[Specific Financial Information Act Article 2, Subsection 1, Items 1) to 6)], the recognition of profitability is acknowledged when such transactions are continuous and repeated. However, the Supreme Court stated that the profitability of a virtual asset business should be judged reasonably by comprehensively examining various circumstances revealed in each case, such as the purpose, type, scale, frequency, period, and environment of virtual asset-related transactions, in light of the purpose of the amendment of the Specific Financial Information Act, presenting the judgment criteria for virtual asset businesses. However, it was ruled that an ordinary user of a virtual asset exchange who continuously and repeatedly trades or exchanges virtual assets solely through the exchange for their own account and benefit would not likely be considered a virtual asset business unless special circumstances exist. This Supreme Court ruling is noteworthy as it clarifies the judgment criteria for virtual asset businesses, eliminating legal uncertainty in the virtual asset industry and providing a clear guideline. A virtual asset business refers to an entity performing the following tasks. Act on the Protection of Virtual Asset Users, etc. (Abbreviated as: Virtual Asset User Protection Act) Article 2 (Definitions) 2. “Virtual Asset Business” means an entity engaged in any of the acts listed in the following subparagraphs as a business. a. Acts of selling or purchasing (hereinafter referred to as “trading”) virtual assets b. Acts of exchanging virtual assets for other virtual assets c. Acts of transferring virtual assets as determined by presidential decree d. Acts of custody or management of virtual assets e. Acts of brokering, arranging, or acting on behalf of the acts in subparagraphs a and b Obligations of Virtual Asset Businesses If an entity is deemed a virtual asset business, they must comply with prescribed obligations such as reporting obligations, anti-money laundering obligations, maintenance of transaction records, and protection of user assets according to the Specific Financial Information Act.
Internet slander postings, do they constitute defamation/obstruction of business? [Legal response methods]
Law firm Veat thoroughly reviewed whether the internet postings written by the opposing party constituted criminal defamation/obstruction of business/defamation under the Information and Communication Network Act against the client company (hereinafter referred to as "the customer"). The customer was being affected by negative postings written by certain users on the internet, impacting the company's reputation and business activities. Accordingly, the customer requested Law firm Veat to review whether the postings were subject to legal punishment. Law firm Veat conducted in-depth reviews regarding the following three main legal issues in this case. 1. Whether it constitutes criminal defamation under the Criminal Code Article 307 of the Criminal Code stipulates criminal defamation based on the assertion of facts and the assertion of false facts. When someone publicly asserts facts and damages another's reputation, they may be sentenced to imprisonment for up to two years, a fine, or a fine of up to 5 million won. When someone publicly asserts false facts and damages another's reputation, they may be sentenced to imprisonment for up to five years, a suspension of qualifications for up to ten years, or a fine of up to 10 million won. We analyzed the possibility of criminal defamation under the Criminal Code by reviewing whether the postings to the customer were perceivable by a large number of people and whether they were based on facts or written with malicious intent. In particular, we carefully reviewed whether they were simple expressions of opinion or assertions of facts that could damage reputation. 2. Whether it constitutes obstruction of business According to Article 314 of the Criminal Code, obstruction of business may occur when false facts are asserted or fraud or force is used with the purpose of obstructing legitimate business. A sentence of imprisonment for up to five years or a fine of up to 15 million won may be imposed for violating this article. Law firm Veat carefully reviewed whether the opposing party's postings were based on false facts and whether they caused specific and substantial interference with the customer's normal business operations. In particular, we assessed whether the elements of ‘fraud’ and ‘force’ were met, and provided suggestions for additional legal response strategies. 3. Whether it constitutes defamation under the Information and Communication Network Act Article 70 of the Act on Promotion and Protection of Information and Communication Network Utilization (hereinafter referred to as the "Information and Communication Network Act") stipulates that actions that damage another's reputation by using the information and communication network are subject to legal punishment. If someone publicly asserts facts with the purpose of defaming another, they may be sentenced to imprisonment for up to three years or a fine of up to 30 million won. If false facts are asserted and reputation is damaged, they may be sentenced to imprisonment for up to seven years, a suspension of qualifications for up to ten years, or a fine of up to 50 million won. The Information and Communication Network Act stipulates stricter penalties than the Criminal Code, considering the ripple effect of defamation through the information and communication network. The element of 'malicious intent' is a key requirement for defamation under the Information and Communication Network Act so criminal defense lawyers at Law firm Veat analyzed various aspects to determine whether the poster’s intent was a simple expression of opinion or whether they intended to negatively impact the customer's reputation. Law firm Veat has effectively protected the interests of various customers based on deep expertise in criminal defamation, obstruction of business, and defamation under the Information and Communication Network Act, and has provided trusted legal advisory services. In particular, We also thoroughly reviewed the strict requirements stipulated by the Information and Communication Network Act and presented the most effective legal response measures from the customer’s perspective. In particular, we provided legal reviews of malicious reviews and content that does not match the facts to protect the customer’s reputation and prevent additional damage. As such, Law firm Veat resolves complex legal issues arising from the digital environment, such as defamation and obstruction of business for customers, and provides swift and professional legal advice based on accumulated practical experience and accurate legal interpretation. If a legal problem related to defamation or obstruction of business arises for a company, please consider receiving professional legal advice from criminal defense lawyers at Law firm Veat. This case study can also be found on the blog of Law firm Veat below. - How to solve corporate defamation issues in the digital age Thank you. Law firm Veat
Joint venture investment contract success secret, Law firm Veat
Law firm Veat received a request from domestic company A (hereinafter referred to as "the client") regarding the drafting of a joint venture operating agreement for two domestic entities to establish a joint venture company in the United States. Law firm Veat reviewed the main contents of the previously executed investment contract and appropriately reflected them in the joint venture operating agreement, minimizing potential conflicts of interest and establishing clear rights and obligations. The investment contract is an essential document that clearly defines each party's obligations and rights, including the amount invested by each party, the equity ownership ratio, and the allocation of voting rights and dividends before the joint venture company is established. These contents must be consistently reflected in the operating agreement to prevent potential disputes that may arise during the operation of the joint venture company after its establishment, and we meticulously adjusted these aspects to contribute to the establishment of a successful joint venture company based on trust among the parties. Since the joint venture company is scheduled to be incorporated as a U.S. entity, the contract content considered the legal differences between Korea and the United States, and we assisted in drafting clauses necessary for the operation of the joint venture company based on U.S. corporate law and local commercial law. Law firm Veat drafted a suitable contract through cooperation between senior foreign attorneys and attorneys specializing in international transactions, supporting the review and effective management of legal risks. What is a Joint Venture? A joint venture is a new entity jointly established by two or more independent companies to combine resources and capabilities for a specific business purpose. Each participating company contributes capital, technology, and personnel, and shares profits and risks. A joint venture is a strategic partnership that maximizes cooperation between companies through advantages such as entering new markets, sharing resources and technology, and sharing risks. Especially when entering overseas markets or new fields, joint ventures with local companies can enhance market accessibility and overcome cultural and legal barriers. Furthermore, it has the advantage of creating synergy by combining the resources and technology possessed by each company, and reducing financial burden and reducing the risk of failure by sharing costs and risks in large-scale investments or high-risk projects. Investment-specialized Law firm Veat possesses extensive experience reviewing various joint venture cases, including public institutions. In particular, we provide legal advice tailored to our clients based on a deep understanding and skilled ability regarding the coordination between the existing investment contract and the new joint venture operating agreement, which are essential to consider during the joint venture company establishment process. This ensures that the legal validity and practical operability are fully met and supports the client's goal achievement. Furthermore, Law firm Veat boasts a unique position in the investment and M&A fields and provides legal advice tailored to investment cases to enable successful business operation even in complex regulatory environments. We have ranked in the TOP5 in the 2024 Bloomberg M&A League Table based on total transaction volume, establishing ourselves as a leading player in the domestic and international investment and M&A legal advisory field. If you need joint venture and investment legal advice, please contact investment attorneys Law firm Veat at any time. This case study can also be confirmed on Law firm Veat's blog below. - Secrets to Successful Joint Venture Contract, Investment-Specialized Law firm Veat Thank you. Law firm Veat
Blockchain startup should pay attention to the key points of the 'Virtual Asset User Protection Act'.
Recently, startups based on blockchain technology are experiencing remarkable growth. Along with this technological innovation, virtual assets are increasingly integrated into everyday life, highlighting the need for protection of virtual asset users. Last June, South Korea passed the 1. Scope of Application to NFTs and Virtual Assets NFTs (Non-Fungible Tokens) are digital assets with uniqueness and scarcity, and are generally excluded from the scope of the Virtual Asset User Protection Act. This is primarily intended to address NFT trading for collection purposes. However, if NFTs are used as a means of payment for goods or services, they may be considered virtual assets, and startups dealing with NFTs in this form may be subject to the Act’s regulations. Customer deposits must be stored with a bank and clearly separated from the business’s assets. The profits earned from these deposits must be returned to the customers, which will lead to customer-centric asset management.Storing 80% of Customer Virtual Assets in a Cold Wallet To prepare for unexpected accidents, insurance must be subscribed or a minimum of 50 million KRW in reserves must be set aside. Businesses operating won markets particularly require a minimum of 300 million KRW in reserves, which can significantly impact initial capital operation plans. * Legal Appropriateness of Business Model While blockchain technology can be applied to various industries, startups need to review how their business model relates to specific laws, such as operating a virtual currency exchange. If you are planning to operate a virtual currency exchange, you must meet the legal requirements for AML (Anti-Money Laundering) under the “Act on Reporting and Use of Specific Financial Transaction Information.”