Case Studies
Online site mall commission recovery method related to the usury law legal review.
Law firm Veat received a request for a legal review regarding whether the fee collection method of a global online purchase site mall (hereinafter referred to as “customer”) constitutes a loan under the Loan Business Act. The customer requested a legal review from Law firm Veat regarding whether they can proceed with a post-collection method of paying the settlement fee on the amount paid by the customer when purchasing the product, after a certain period of time. . The Law firm Veat e-commerce team carefully analyzed relevant provisions of the “Civil Act” and the “Act on Registration of Loan Business and Protection of Financial Users” (hereinafter referred to as “Loan Business Act”), and conducted a legal review considering the characteristics of the relevant transaction structure and provided detailed guidance on the business model. Necessity of Prior Legal Review for Online Mall’s PG Service The Loan Business Act was established to promote the sound development by enacting necessary matters concerning the registration and supervision of loan businesses and loan brokerage businesses, and regulating illegal debt collection, interest rates, and other related matters of loan businesses and financial institutions. A loan business means a person who engages in the business of loaning money using methods such as bill discounting, pledged collateral, and other similar methods, or is a loan business or financial institution and receives and collects debts under a loan contract. In the Loan Business Act, “engaging in a business” means continuously and repeatedly performing the same act, and whether it applies is determined by comprehensively considering various circumstances such as the repetitiveness, commerciality, purpose, scale, number of times, and period of the act, based on social norms (Supreme Court, March 29, 2012, Judgment No. 2012do 4390). Therefore, it is advisable for the customer to receive a business legal review from an e-commerce attorney who has handled various cases involving complex financial transaction structures such as PG services, regarding whether the customer's business model meets the legal requirements of the Loan Business Act and related laws, and whether there are any potential legal risks. The Law firm Veat e-commerce team recognizes the importance of relevant laws and regulations such as the “Act on Consumer Protection in Electronic Commerce,” “Civil Act,” and “Act on Protection of Financial Consumers,” and provides customers with detailed legal advice to meet the legal requirements stipulated in each law. E-commerce is a rapidly growing field in modern society, and relevant laws and regulations are constantly being updated. Law firm Veat keeps abreast of these changes and continually updates the latest legal information, and helps to minimize the legal risks inherent in the customer's business. If you require legal advice on electronic payment processing or regular legal advice, please contact Law firm Veat. Thank you. Sincerely, Law firm Veat
Review of the legality of game prize distribution
Law firm Veat received a request from game company A (hereinafter referred to as the "client") to review the legality of prize disbursement based on the results of a sports game. The client requested a legal review to ensure there were no legal issues before predicting the results of sports games and disbursing various prizes, such as virtual assets and physical prizes, to top users based on game results. The 「Act on Promotion of Game Industry」 (hereinafter referred to as the "Game Industry Act") clearly stipulates regulations for game rating and prevention of gambling. All games must undergo a rating classification in advance, and during this process, whether the game content contains elements of gambling is a major point of review. Disbursement of virtual assets or physical prizes is severely restricted due to gambling issues. Law firm Veat comprehensively reviewed the possibility of game rating classification under the Game Industry Act regarding the prize disbursement method of the game, the possibility of prize disbursement under the Game Industry Act, and provided professional guidance on the scope of services that could be carried out within the framework of existing laws. The methods and means of disbursing virtual assets, physical prizes, etc. for game products are quite limited and, since games that predict the results of sports events involve a system where users receive prizes based on their predictions, gambling elements may exist. It is particularly important to receive a legal review in advance regarding the scope of possible services, as strict supervision is being carried out on gambling issues. Act on Promotion of Game Industry ("Game Industry Act") Game Industry Act Article 21 Game Rating Classification, Game Industry Act Article 28 Prevention of Gambling Regulations According to the Game Industry Act, all games must undergo a rating classification in advance. The rating classification procedure is performed by the Game Management Committee, which thoroughly reviews the game content and elements of gambling. In particular, games that disburse virtual assets or physical prizes undergo stricter review, as the elements of gambling may be strongly involved. The Game Industry Act aims to protect users and foster a healthy game culture by implementing strict regulations to prevent gambling, and prize disbursement is directly linked to gambling issues and is allowed only to a limited extent. The Act details the regulation of the type, method, and amount of prizes to prevent illegal prize offerings. We focused on a detailed review of compliance with regulations related to gambling issues, the legal status of virtual assets, and the legality of prize disbursement. Law firm Veat provided guidelines to secure the legality of the game and provide users with a safe gaming environment through this legal review. In particular, we clarified the legally permissible scope regarding the disbursement of virtual assets and physical prizes, contributing to securing the legality of the game service. Law firm Veat boasts high expertise in legal advisory services for IT, startups, and particularly the game industry. Based on a deep understanding of the Game Industry Act and extensive experience, we provide the best legal advice to clients. Through this case, the client was able to develop a plan to safely and legally provide services within the framework of existing laws. The 「Act on Promotion of Game Industry」 (Game Industry Act) and the 「Special Act on Regulation and Punishment of Gambling」 (Gambling Regulation Act) are the main laws related to the legal regulation of the game industry. These laws address various issues that may arise in game development and operation, and in the relationship between the game developer and the user. Law firm Veat provides solutions by providing extensive legal knowledge related to the Game Industry Act, the Gambling Regulation Act, accurately understanding the problems faced by the client, and providing effective solutions. If you require legal advisory services for game services, such as the 「Act on Promotion of Game Industry」 (Game Industry Act) and the 「Special Act on Regulation and Punishment of Gambling」 (Gambling Regulation Act), please contact Law firm Veat. Thank you. Law firm Veat
Review of the legality of the exercise deadline for stock purchase options as stipulated in the articles of association. Law firm Veat
A Venture-Specialized Law firm Veat reviewed the legality of stock purchase options at the request of an AI (AI) game company (hereinafter referred to as "customer"). The customer set vesting periods and granted stock options exceeding the exercise deadline specified in the articles of association, and approached Law firm Veat to review its legality. Law firm Veat's Corporate Advisory Team considered whether granting stock options exceeding the exercise deadline specified in the articles of association was lawful, and reviewed it in detail, considering it the core issue of this case. The court ruled that it does not unduly restrict the rights of the person granted a stock purchase option, and that within the scope of not undermining the basic intent or core content of the articles of association, the exercise deadline for stock purchase options can be freely determined through shareholder resolutions and individual contracts. However, there have been cases where the granting of stock purchase options in violation of the articles of association was deemed invalid, so we provided guidance on the direction to proceed after comprehensively reviewing the basic intent and core content of the articles of association. The Importance of Legal Review When Drafting Articles of Association Drafting articles of association is a necessary procedure when establishing a joint-stock company. The articles of association are rules that define the company's purpose, name, total number of shares to be issued at the time of establishment, location, and other major details of the company, and are an important document that forms the legal basis of the company. The articles of association are divided into absolute registration items, relative registration items, and optional registration items, and among these, the absolute registration items are those explicitly required by law, and if these are not met, the articles of association are invalid. Companies planning to grant stock purchase options must necessarily include provisions regarding stock purchase options in the articles of association.
Reviewing response options for the counterparty in breach of the entrusted management contract.
Law firm Veat received a request from A (hereinafter referred to as the "Client") who intends to operate a food business, to review possible countermeasures against the counterparty failing to fulfill the entrusted operating contract. The Client entered into an entrusted operating contract with B Company (hereinafter referred to as "B Company") under which they would invest a substantial lease deposit and operating expenses for the restaurant operation and receive a certain amount or a certain percentage of the profits from B Company. However, B Company ultimately failed to fulfill its obligation to distribute profits as stipulated in the entrusted operating contract, despite A Company's substantial support, and the Client requested Law firm Veat to review legal countermeasures in the event of a failure to fulfill the profit distribution obligation stipulated in the entrusted operating contract. An entrusted operating contract is based on trust between the business owner and the operating company, and defines the rights and obligations of both parties through clear contract clauses. If such an entrusted operating contract is not properly fulfilled, the business owner may not receive the anticipated profits and may incur additional financial burdens. Therefore, it is important to recognize the importance of contract fulfillment, and prompt and appropriate legal action is necessary in the event of a failure to fulfill the contract. When an entrusted operating contract is breached, you should first review the clauses stipulated in the contract. Generally, entrusted operating contracts include penalty clauses or damages clauses for breach. Law firm Veat quickly identified the legal actions the Client could take through contract analysis and presented specific countermeasures accordingly. If a party fails to fulfill their contractual obligations, you can respond in the following ways, which may vary depending on the specific circumstances, and it is recommended that you proceed after a specific legal review of the case. Send a Letter of Demand The first action that can be taken when a contract breach occurs is to send a Letter of Demand. A Letter of Demand is a document formally notifying the counterparty of the fact of contract breach and requesting correction of the breach and damages. This can be used to formally raise the issue before initiating a legal dispute and urge the counterparty to take action. File an Application for a Payment Order Filing an Application for a Payment Order is a way to quickly secure a claim through the court for a counterparty's failure to fulfill their obligations. Applying for a Payment Order can be done quickly and efficiently, making it a very effective method in the initial response stage. It is important to carefully review the Client's situation and prepare a Payment Order application. File an Application for a Provisional Seizure In addition to a Payment Order application, an Application for a Provisional Seizure is a strong measure to secure claims. A Provisional Seizure is a procedure to temporarily freeze the counterparty's assets to allow claims to be secured in accordance with a subsequent judgment. You may consider applying for a Provisional Seizure on major assets to protect claims. Negotiation and Mediation In addition to legal action, negotiation and mediation are important ways to resolve disputes. You can explore options for resolving the dispute amicably through negotiation, maximize the Client's interests in the negotiation process, and strive for rapid problem-solving. Litigation If negotiation and mediation fail, litigation is an inevitable choice. It is important to promptly prepare for the litigation process and develop strategies to effectively represent the Client's arguments in court. This can increase the possibility of winning the legal dispute. Responding to an entrusted operating contract breach requires a comprehensive legal strategy from contract analysis to Letter of Demand, Application for a Payment Order and Application for a Provisional Seizure, negotiation and mediation, and litigation response. Law firm Veat provides such comprehensive legal services to help the Client quickly and effectively resolve the problem. Law firm Veat strives to ensure that entrusted operating contracts and other issues of failure to fulfill contractual obligations are resolved smoothly through appropriate and efficient legal responses. If you need legal action regarding a breach of an entrusted operating contract, please contact Law firm Veat. Thank you. Law firm Veat
[Law firm Veat_Plattum Column] Do I need the author's permission when lecturing using another person's textbook?
Law firm Veat’s copyright specialized team, TIP(Technology Intellectual Property) team contributed to startup media Platum regarding whether copyright infringement occurs when using someone else’s published book as a textbook for lectures. The lecture can be recognized as a kind of oral work depending on whether it has originality. This column details cases where originality was recognized and cases where copyright infringement issues arose, based on court precedents. Please refer to the [link] for more information. The copyright column published by Law firm Veat in Platum explains in an easy-to-understand manner copyright judgment cases that are helpful for creators dealing with oral content such as lecturers, interviewers, and debaters. The number of cases where a book’s author files a copyright infringement lawsuit against the instructor is increasing. While precedents have recognized copyright infringement in some cases, there have also been cases where it was not, so it is safe to consult with a lawyer specializing in copyright law and applications of lectures to determine the possibility of copyright infringement. Law firm Veat’s copyright specialized team, Law firm Veat TIP team, examines copyright law and precedents in detail regarding various copyright cases, including lectures, to help clients with practical legal advice and minimize legal risks. If you need legal assistance regarding oral works, copyright law, please contact Law firm Veat. Thank you. Law firm Veat
Game company representation, winning case regarding paid content refunds due to suspension of game provision.
Law firm Veat successfully won a lawsuit regarding refund claims for paid content, commissioned by a metaverse platform game company (hereinafter referred to as “the client”). This case began when game provision was suspended following the Game Management Committee’s decision to revoke the game’s rating. Some game users requested refunds for the paid content they purchased during gameplay and filed this lawsuit. Law firm Veat argued that the provision of “the Act on Consumer Protection in Electronic Commerce” (hereinafter referred to as “the Electronic Commerce Act”) Article 17(3), which states that ‘the content of goods or services does not match the displayed or advertised content or is not performed as agreed in the contract,’ does not apply, arguing that the free game usage contract and the paid content purchase contract should be distinguished. The court accepted this argument and rejected all claims by the game users involved in this case. Refunds and Terms Game Companies Should Review In February of this year, the Fair Trade Commission revised the standard terms and conditions to specify the obligation to disclose information on items with a chance of winning and to operate a dedicated refund channel for paid items for at least 30 days after the game service ends (Online Game Standard Terms and Conditions Article 15(9), Mobile Game Standard Terms and Conditions Article 25(4)). The Fair Trade Commission particularly judged the following contractual clauses to be unfair: Restrictions on cancellation of contracts for items with limited periods and receipts, used cash, and items belonging to temporarily suspended accounts were deemed disadvantageous to consumers except for reasons stipulated in the Electronic Commerce Act. Furthermore, provisions that only recognize refunds for the entire remaining cash or only recognize refunds when problems occur due to the company’s sole negligence, and provisions that do not recognize transaction cancellations depending on the payment method, were deemed to excessively restrict refunds and could be deemed invalid (Press Release-6769 of the Fair Trade Commission on June 26, 2019). Standard terms and conditions are not mandatory to comply with, but serve as a basis for resolving disputes in the online game market, so they should be prepared accordingly. Contractual clauses that do not comply with the Contract Act can be invalidated. Therefore, we recommend that you receive accurate legal advice from a legal professional who comprehensively understands “game services” and “law.” Law firm Veat proactively identifies and understands legal changes that may affect game services, such as Fair Trade Commission guidelines, and provides optimal legal advice to game companies so they can comply with new regulations while achieving their business goals. Law firm Veat provides excellent advice in areas such as various game lawsuits, the Electronic Commerce Act, and paid content refunds, which are challenges faced by game companies and metaverse and IT companies, and will do its best to help clients operate their businesses successfully. Thank you. Sincerely, Law firm Veat
Rent service platform’s new business model legality review.
Law firm Veat received a request from a rent service platform (hereinafter referred to as “the client”) to review the legality of the client’s new business model. The client was planning a service where partner members purchase rental products, entrust the platform to operate them, and receive a fixed commission. They inquired with Law firm Veat, specializing in legal advice for startups, regarding the possibility of a violation of the “Act on Regulation of Similar Fundraising Activities” (hereinafter referred to as “the Similar Fundraising Act”). Law firm Veat’s startup advisory team meticulously analyzed whether the purchase and entrusted operation of rental products, along with the commission payment method, could potentially violate the Similar Fundraising Act, primarily focusing on the “Supreme Court Ruling of July 9, 2020, in Case No. 2018Do5519,” which dealt with apparent product transactions, and the “Supreme Court Ruling of December 9, 2005, in Case No. 2005Do7120,” which concerned the payment of installments on commercial properties. In addition, we thoroughly reviewed the client’s specific business model details to provide detailed guidance on the similarity of the business model to a similar fundraising activity. Why legal review of the Similar Fundraising Act is necessary when introducing a new business model Similar fundraising activities refer to activities of procuring funds from an indefinite number of individuals without obtaining licenses or permits as required by other laws such as the Banking Act and the Savings Bank Act, and without registration or notification (Similar Fundraising Act Article 2). 1. Promise of capital contribution: An activity of receiving capital contributions by promising to pay the full amount or more than the full amount of future capital contributions. 2. Money collection: An activity of receiving money under the name of deposits, deposit money, etc. 3. Issuance of bonds: An activity of issuing and selling bonds after promising to repurchase them at a future price or higher than the selling price. 4. Economic loss compensation: An activity of compensating for economic losses with money or securities and receiving money under the name of membership fees. Because these four activities can undermine confidence in the financial market and cause significant damage to investors, Article 3 of the Similar Fundraising Act explicitly prohibits them by stating, “No one shall engage in similar fundraising activities.” Startups need to legally review whether their introduction of new business models could violate the prohibited conditions under the Similar Fundraising Act. We recommend consulting with experienced attorneys with a deep understanding of corporate advisory services to review the business model and explore ways to mitigate legal risks. Law firm Veat deeply understands the legal difficulties that startups may encounter when challenging new businesses, and we assist our clients’ stable service provision and corporate growth by thoroughly identifying their business models and legal risks. In particular, Law firm Veat's regular legal subscription service provides optimized legal advice tailored to numerous legal issues that early-stage startups/companies are concerned with. If you need advice on similar fundraising activities and corporate advisory services, please feel free to contact Law firm Veat. Thank you. Sincerely,Law firm Veat
Investment contract review and examination of requirements under the Commercial Code, and drafting of a business transfer agreement.
Law firm Veat received a request from a web3 Company A (hereinafter referred to as "the client") to review the existing investment contract and requirements under the Commercial Code for transferring a portion of its business, and to draft a business transfer contract. In this case, the client had a history of receiving investments, so a review of the existing investment contract was necessary. Furthermore, because transferring a portion of its business requires a special resolution of the shareholders' meeting and the designation of a right of first refusal for dissenting shareholders as stipulated in the Commercial Code, Law firm Veat thoroughly reviewed the complex legal requirements related to this business transfer, and guided the client to comply with all legally required business transfer procedures under the Commercial Code. Law firm Veat assessed the importance of the business transfer by applying quantitative criteria such as assets and sales to evaluate the impact on the entire company. This clarified the importance of the business the client wished to transfer, providing support for following the appropriate legal procedures. Furthermore, when transferring all or a portion of its business, it thoroughly reviewed the existing investment contracts and articles of incorporation, verified the obligation to pre-notification and post-notification of results, drafted the necessary forms for the business transfer contract, and provided them to the client. 'Article 374 of the Commercial Code' When a company undertakes any of the following acts, a resolution according to Article 434 shall be required: 1. Transfer of the whole or a substantial part of its business 2. Lease of the whole business or delegation of management, contract for sharing the entire profits and losses with another party, or other contracts equivalent to the above, their conclusion, alteration, or termination 3. Acquisition of the entire business or a portion thereof by another company that has a substantial influence on the business of the company. A special resolution requires a majority of two-thirds of the shareholders attending the shareholders' meeting, which is intended to adequately reflect the opinions of shareholders in the company's important decision-making process. Law firm Veat prepared for a special resolution of the shareholders' meeting and guided the process of designating the right of first refusal for dissenting shareholders. Furthermore, for small-scale companies with total capital of less than 100 million won, a board resolution or the decision of a director may be required when transferring a portion of its business. Considering the characteristics of these small-scale companies, the process of transferring a portion of the business in this case reviewed whether a board resolution was necessary and suggested appropriate measures if it was required. In conclusion, Law firm Veat supported the web3 client, a small-scale company, in conducting a business transfer while minimizing legal risks.
[202406] Monthly Veat June Issue_Does Selling Investment Algorithms Constitute Investment Advisory?
Here's the translation of the text from the provided URL, adhering to your specific instructions: 저희 Law firm Veat는 다양한 분야에서 전문적인 법률 서비스를 제공하고 있습니다. 특히, 기업 법률 자문, 분쟁 해결, 인수 합병, 지적 재산권 보호 등과 같은 분야에서 뛰어난 전문성을 보유하고 있습니다. 저희는 고객의 성공을 위해 최선을 다하며, 고객과의 신뢰를 최우선으로 생각합니다. 저희 Law firm Veat는 고객의 상황을 정확하게 파악하고, 고객에게 가장 적합한 해결책을 제시하기 위해 노력합니다. 또한, 법률 문제에 대한 깊이 있는 이해를 바탕으로, 고객에게 실질적인 도움을 제공합니다. 저희는 고객의 입장에서 생각하고, 고객의 성공을 위해 함께 노력하는 법률 파트너가 되겠습니다. 저희는 항상 변화하는 법률 환경에 발맞춰 새로운 지식과 기술을 습득하고, 고객에게 최고의 서비스를 제공하기 위해 노력하고 있습니다. Law firm Veat는 고객의 성공적인 비즈니스를 위한 든든한 지원군이 될 것을 약속드립니다. 저희 Law firm Veat는 다음과 같은 분야에서 전문적인 법률 서비스를 제공합니다: 기업 법률 자문 분쟁 해결 인수 합병 지적 재산권 보호 컴플라이언스 계약 검토 부동산 관련 법률 자문 노동 법률 자문 개인 파산 가족 법률 자문 저희 Law firm Veat는 고객의 성공을 위해 최선을 다할 것을 약속드립니다.
Cybermall Terms of Service, Vendor Agreement, and Privacy Policy Legal Review
Law firm Veat received a request from a cybermall startup A (hereinafter referred to as “the client”) and reviewed and drafted the terms of use, vendor agreement, and personal information processing policy. The client operated a cybermall dividing sellers and buyers, and Law firm Veat’s e-commerce team separately drafted terms of use for sellers and buyers, reflecting these characteristics. In particular, because the seller does not qualify as a consumer under the 「Act on Protection and Use of Information in Electronic Commerce, etc.」 (hereinafter referred to as “the Electronic Commerce Act”), we clearly defined the seller’s legal responsibilities and obligations and incorporated provisions based on Article 20 through Article 20-3 of the Electronic Commerce Act, which stipulate the seller’s duty to disclose information and liability for damages, as a communication sales intermediary. Furthermore, Law firm Veat’s e-commerce team drafted a personal information processing policy to ensure that the client complies with the 「Personal Information Protection Act」 during the process of collecting, storing, and processing user personal information. For clients operating a communication sales intermediary, Article 20-2(3) of the Electronic Commerce Act stipulates that a communication sales intermediary has the status of a communication sales agent, and we detailed the obligation to take measures necessary for the supply of goods or services within 7 days from the date of the buyer’s offer, as stipulated in Article 15(1) of the Electronic Commerce Act. Items that a cybermall operator should review and prepare