Case Studies
[Investment] Blockchain Company Investment, SAFTE Contract Legal Review
Law firm Veat reviewed the SAFTE (Simple Agreement for Future Tokens and/or Equity) agreement commissioned by A Company, a DeFi blockchain company. With the development of blockchain technology and the growth of companies based on it, the need for professional legal review of newly emerged contract forms has increased. This SAFTE agreement is a contract form that includes a synthetic element of SAFT (Simple Agreement for Future Tokens) and SAFE (Simple Agreement for Future Equity), in which investors receive the right to acquire virtual currency (tokens) issued by the invested company in the future alongside equity investment. In particular, foreign investors tend to prefer investments that include equity investment in SAFE form and the right to acquire virtual currency. Law firm Veat carefully considered the legal risks of the invested company by paying close attention to the conversion method, the scope of issuance of virtual currency, and various related clauses. Due to the complex content and unique characteristics of this contract, meticulous review and interpretation are necessary. Therefore, carefully examine the contract with a lawyer who understands ‘investment legal advice’ and ‘blockchain technology’ and… Law firm Veat is a ‘IT-specialized’ law firm with a large number of engineers (‘IT specialists’), which has been introduced as a ‘top law firm to watch in the technology-based startup advisory sector’ in ‘THE LEGAL 500’, and provides advisory and consulting services to various blockchain-based businesses, incorporating the know-how gained from advising various blockchain service industries. If you need a professional legal review of complex contracts such as SAFTE or legal advice on blockchain business, please contact Law firm Veat.
[Investment] Conducting preliminary legal due diligence, which plays an important role when investing.
Law firm Veat successfully performed the request for Veat to conduct a preliminary legal due diligence regarding A, an AI startup, which was considering fundraising. A, anticipating its next round of investment, commissioned Law firm Veat to conduct a preliminary legal due diligence at the same level as the legal due diligence for the investment purpose. Specifically, Law firm Veat meticulously checked whether there were any legal risks that investors might be concerned about, helping A proactively prepare for legal issues that could elicit requests for correction or concerns from investors. Given the complexity and importance of corporate investment or acquisition procedures, legal due diligence is necessary. These legal due diligences play a crucial role in accurately understanding the current status of the company and identifying potential issues. Through a clear verification of the legal due diligence, delays in investment decisions can occur if unrecognized problems are discovered. Therefore, companies aiming for investment fundraising often request preliminary legal due diligence from Law firms. A preliminary legal due diligence checks whether a company has any legal issues before receiving investment proposals or M&A offers, aiming to minimize legal risks and ensure a smooth investment decision after the investment is carried out. From the perspective of an investor making a proposal, the fact that legal aspects are clearly established means that it can be carried out more safely and easily. Legal due diligence is a complex and specialized field that identifies the current status of the company being invested in or acquired and various legal risks that may arise. For this reason, it is recommended to seek advice from ‘investment-specialized’ Law firms that comprehensively understand ‘corporate legal advice’ and ‘investment legal advice’. Law firm Veat possesses extensive experience in advising various companies on investment matters, having ranked in the TOP 5 in ‘2022 Annual Bloomberg M&A League Table’ and being a ‘Finalist’ in the ‘Korea Deal Firm’ category for two consecutive years at ‘ALB Korea Award 2022’ – demonstrating its position as a ‘leader in investment & M&A legal advice’. If you need specialized legal consulting on investment and mergers & acquisitions, including a preliminary legal due diligence, please contact Law firm Veat. Thank you. Law firm Veat
[Corporate Advisory] When engaging in lending activities, legal review of restrictions on investment and transaction.
Law firm Veat conducted legal review regarding the possibility of investment restrictions on the parent company in response to inquiries from A Company, an operator of a used car platform. Law firm Veat provided legal advisory services concerning investment restrictions on the parent company when A Company sought to establish a subsidiary company and engage in lending activities. Law firm Veat thoroughly examined actions based on the “Act on Promotion of Venture Investment,” “Act on Financial Investment and Securities Markets,” “Act on Antimonopoly and Fair Trade,” “Act on Improvement of the Financial Industry Structure,” “Specialized Consumer Finance Act,” and other related laws. Furthermore, providing legal advice considering restrictions on actions, trading restrictions, ownership restrictions, and investment restrictions arising from investment companies such as Small and Medium-sized Enterprises Investment Corp. and Venture Capital Funds, to prevent potential legal issues that could occur when the parent company establishes a subsidiary company with a meticulous legal advisory service. Especially, in the case of startups or small and medium-sized enterprises, various legal restrictions may arise when the company grows, such as diversification of business. In such cases, we recommend receiving regular legal consulting from a company-specialized law firm with abundant experience by entrusting various matters to the company. Law firm Veat is helping to support the growth of entrepreneurs and startups. If you need advice on various legal issues for the growth of entrepreneurs and startups, please feel free to contact Law firm Veat at any time. Thank you. Law firm Veat.
[Corporate Advisory] Stock Ownership Acquisition Requirements Legal Review
Law firm Veat undertook legal review on behalf of A Company, a mobile game software development company, regarding the acquisition of equity shares. A Company wished to conduct a legal review to determine whether the company’s acquisition of its own equity shares was an exception to the generally prohibited circumstances, i.e., when the company receives equity shares directly from shareholders. “The Companies Act” prohibits companies from acquiring or issuing more than 1/20 of their total outstanding shares as collateral. The acquisition of equity shares is related to company assets and can harm creditors’ interests, cause damage to shareholders due to stock price fluctuations, and be used as an unfair means of corporate governance related to control. However, in the course of company management, there are often many cases where equity shares are useful, such as when shareholders are liquidated or when the company holds its own shares and uses them for financial resources or other transactions. However, even in these cases, there are limitations, but if the equity shares are acquired and utilized in a way that is not prohibited by “The Companies Act,” they can be beneficial to the company. Therefore, we recommend consulting with a legal expert with extensive practical experience in corporate legal affairs and proceeding cautiously. The acquisition of equity shares means that the company acquires shares issued by itself in its own name and at its own expense. Article 341 and Article 341(2) of “The Companies Act” meticulously regulate the methods of acquiring equity shares, and it is necessary to thoroughly check various conditions and procedures under “The Companies Act,” such as the total acquisition amount and shareholder meeting procedures. Because various legal issues can arise in the process of a company’s management, it is important to conduct proactive preliminary reviews to check for legal risks. Law firm Veat is a numerous corporate lawyers serving as ‘advisor/consultant’ to startups, venture capital firms, and provides prompt and efficient regular legal consultation services in the context of corporate management. If you need assistance with corporate legal affairs regularly, please contact Law firm Veat. Thank you. Law firm Veat.
[Legal Due Diligence] ESG Legal Due Diligence Conduct Upon Investment
Law firm Veat conducted ESG legal due diligence and legal review in response to a request from energy environmental company A Corp regarding the case involving A Corp’s investment in a recycling company, Pi-Tu-Sa Hwa-Sa. Law firm Veat verified the parts that needed to comply with necessary permits and regulations considering the characteristics of Pi-Tu-Sa Hwa-Sa, a recycling company, and examined various laws including the “Air Quality Management Act,” the “Water Quality Management Act,” the “Chemicals Control Act,” and the “Occupational Safety and Health Act” to examine regulatory matters applicable to the client company. In particular, Pi-Tu-Sa Hwa-Sa declared and guaranteed the validity of the contract and concerns about potential damages by confirming that the company had completed the change notification regarding emissions of air pollutants under the “Air Quality Management Act,” considering the water intake contract based on that foundation. Law firm Veat explained, considering the current state of the business that Pi-Tu-Sa Hwa-Sa was not currently operating and the possibility of operating it stably. ESG due diligence will thoroughly examine whether the content related to the “Waste Management Act,” the “Air Quality Management Act,” the “Chemicals Control Act,” the “Act on the Enforcement and Increased Punishment of Environmental Crimes,” and the “Environmental Impact Assessment Act” violates environmental content in related laws. Given that Law firm Veat reviews the situation of Pi-Tu-Sa Hwa-Sa in advance before investing, playing a crucial role in reducing legal risks, we recommend conducting legal due diligence by Law firm Veat before investment. Law firm Veat provides advice and consulting lawyers to various companies and venture capital firms based on the experience of receiving and handling a wide range of investment-related matters. If you need a legal review and legal due diligence while operating a company, please contact Law firm Veat. Thank you. Law firm Veat.
[Corporate Advisory] Legal Review of Employment Restrictions Related to Side Jobs
Law firm Veat reviewed the matter comprehensively, having received a referral from Internet service platform A’s request. A’s representative inquired about whether they could hire an employee who was working under a blanket wage system at a company (B Company) where the company’s major shareholder served as the president and shareholder. Law firm Veat assessed the matter based on specific conclusions regarding whether the employee’s side business was restricted, and whether it was appropriate to provide personnel to another company at a very low cost, and comprehensively reviewed “Labor Standard Act,” “Act on Monopoly Regulation and Fair Trade,” and “Penal Code” etc. to provide legal advice regarding the possibility of prohibited actions. Specifically, Law firm Veat reviewed internal regulations to examine the possibility of simultaneous employment between A and B Companies, and guided the client on whether there was any liability for breach of duty of loyalty based on the detailed content of the case. Side business restriction means restricting an employee from working in another business while employed by a company, or from engaging in other work. In private companies, restrictions are often established through internal regulations such as employment rules or employment contracts. However, a precedent exists (Seoul High Court, July 4, 2002, Case No. 2001nu13098) stating that it is inappropriate to discipline an employee without restriction simply because they violate the duty of loyalty or engage in side business without permission. When hiring employees, it is necessary to specifically determine the relevant laws such as “Labor Standard Act,” “Act on Monopoly Regulation and Fair Trade,” and “Penal Code,” and to consider internal regulations such as company internal rules. Therefore, please seek assistance from a legal expert with extensive experience in corporate advisory. Law firm Veat provides legal advice based on its abundant practical experience in addressing various legal issues encountered in operating numerous companies, including employee hiring, and offers “regular legal advisory services” for clients who need regular legal advice. If you need legal advice while operating a company or require regular legal advice, please contact Law firm Veat. Thank you. Law firm Veat
[Intellectual Property Rights] An Il-woon Partner Attorney – Are there any legal issues with creating songs using the voices of others?
Law firm Veat will provide legal opinions based on professional expertise regarding ‘AI Voice Utilization’ and whether there are legal issues with creating songs using AI. Please submit your inquiries to Law firm Veat if you need legal advice regarding intellectual property rights, including copyrights and publishing rights. Please refer to the following article for detailed interview content. Partner Attorney An Il-oon of Law firm Veat, who is a lawyer with a background as a developer and majored in computer engineering, received an award from the Minister of Culture, Sports and Tourism at the ‘2020 Copyright and Open Source SW License Conference’ and has been active as a community professional advisor of the Korea Copyright Committee, providing legal advice with professional expertise in the field of ‘copyrights and intellectual property rights’. Law firm Veat’s TIP Team is a specialized team for resolving various copyright and intellectual property issues arising from new industries generated based on advancing future technologies such as AI (Artificial Intelligence). It provides specialized legal advice on copyrights and intellectual property rights, incorporating Veat’s expertise. Thank you. Law firm Veat Dream “콩밭~ 매는~ 아낙네야~” is the lyric of the debut song ‘Chilgapsan’ by singer Ju Byeong-seon in 1989. However, in a video uploaded to YouTube, trot idol Im Yeong-ung sang the song. Although Im Yeong-ung sang the song, he did not sing it himself. It seems paradoxical, but it’s true. It was created by a YouTuber using AI voice technology. Although Im Yeong-ung did not actually sing ‘Chilgapsan,’ the world has come where you can hear ‘Chilgapsan’ by Im Yeong-ung. As AI technology advances, things that were only imagined are becoming reality. One of them is AI music. AI can implement the voice of a specific singer and sing any song. If you search YouTube for ‘AI cover song,’ you will find many songs created by AI. Is there a legal issue with creating songs using the voice of another person? The legal community views it as a violation of publishing rights. As AI gets closer to our lives, it is pointed out that it is necessary to regulate related laws. ‘AI Im Yeong-ung’ singing Ju Byeong-seon’s ‘Chilgapsan’, are there any legal problems? / Source: Segye Ilbo (https://www.segye.com)
[Software] Legal advisory services regarding government software procurement projects and subcontracting restrictions for large corporations.
Law firm Veat conducted a legal review regarding the scope of participation and restrictions on subcontractors for software bids by government agencies, taking on a request from a major IT company affiliated with a large corporation. Law firm Veat reviewed the “Software Promotion Act” and, in principle, large software companies are restricted from participating in software bids by government agencies to protect small and medium-sized software companies, but in some cases, participation is possible. Therefore, we carefully reviewed the case to determine if the client company, a major IT company affiliated with a large corporation, could participate. We analyzed the case to determine whether it falls under subcontracting/sub-subcontracting/sub-sub-subcontracting, and advised on whether participation is possible in that structure. Article 51 of the “Software Promotion Act” stipulates that when a software company enters into a contract with a government agency, it cannot subcontract more than 50% of the software business amount, excluding the purchase price of goods (including commercial software), but an exception exists for businesses that require new technologies or specialized technologies as defined in a presidential decree and where the amount needed for the business exceeds 50% of the software business amount, excluding the purchase price of goods, it can subcontract the entire software business to that extent. Although the software company receiving subcontracting cannot generally sub-subcontract the business, it can do so again if it requires new technologies or specialized technologies as defined in a presidential decree and for other reasons necessary to perform the subcontracted business. However, the software company receiving sub-subcontracting cannot sub-subcontract the business again. (Article 51(4) of the “Software Promotion Act”). Since the “Software Promotion Act” clearly defines standards, it is necessary to carefully examine whether the business we support meets the structural standards defined in the “Software Promotion Act”. If a clear legal review is needed to determine whether the business we support falls under subcontracting/sub-subcontracting/sub-sub-subcontracting and is possible to participate in that structure, we recommend receiving detailed review from a law firm with extensive experience in corporate legal advisory services. Law firm Veat provides legal advisory services by incorporating Veat’s accumulated experience in advising numerous companies, and we are grateful that many companies regularly request legal advisory services. If you desire Veat’s specialized corporate legal advisory services, please contact Law firm Veat as follows. Thank you. Law firm Veat
[Insurance] Legal review of whether violation of Financial Consumer Protection Act occurred in insurance product comparison platform.
Law firm Veat received a request from insurance product platform A and reviewed whether it violated the “Act on the Protection of Consumers of Financial Products” regarding insurance products. Law firm Veat reviewed whether advertising and recommending insurance products on comparison platforms based on the recent press releases and guidelines of the Financial Supervisory Service constitutes restricted agency and brokerage activities under the “Act on the Protection of Consumers of Financial Products”. Considering the correlation with platform revenue, whether there was active provision of increased sales services, etc., regarding A’s services, we reviewed whether it was an unregistered brokerage activity or an advertising activity violating Article 22 of the “Act on the Protection of Consumers of Financial Products” and explained the results, and comprehensively reviewed the service of providing and comparing A’s insurance products so that they could be provided smoothly. The “Act on the Protection of Consumers of Financial Products” is a law to protect consumers and allow them to engage in cautious financial activities, protecting them from financial risks. Therefore, it imposes a sense of responsibility on companies, including six sales principles, so it is important to conduct legal reviews in advance before providing services. If a company is preparing insurance services, you need to comply with laws such as the “Act on the Protection of Consumers of Financial Products” in order not to neglect these obligations, and it is necessary to consult with experienced lawyers and conduct detailed reviews of the services. Law firm Veat provides solutions by carefully reviewing the law with Veat’s meticulous legal review regarding the “Act on the Protection of Consumers of Financial Products”. If you have any questions regarding insurance services or the “Act on the Protection of Consumers of Financial Products”, please contact Law firm Veat. Thank you. Law firm Veat.
[Intellectual Property Rights] An Il-won Partner Attorney – What legal responsibility will be imposed if similar cases occur domestically regarding the use of AI voices?
Law firm Veat has conducted an interview as a legal expert regarding whether legal responsibility can be demanded if similar cases occur domestically with regards to ‘AI voice theft’. Please refer to the following article for detailed interview contents. If you need legal consultation related to this interview, please contact Law firm Veat. Veat partner attorney, An Il-won, has a background in computer science and worked as Head of the Search Development Center at Naver Corporation’s Search Development Center. He also actively participates as a legal mentor for ICT startups under the Ministry of Science and ICT and as a community specialist at the Korean Copyright Commission. He provides legal consultation based on his expertise in the field of ‘IT’ and intellectual property rights. Law firm Veat’s TIP team provides legal consultation for effective solutions to legal issues in the fields of copyright and intellectual property rights, focusing on future technologies such as IT · software and metaverse, as well as new industries like ICT. It is led by partner attorney An Il-won, and also includes partner attorney Song Seung-jong and attorney Jeon Yong-hwan, and provides specialized legal services in the fields of copyright and intellectual property rights unique to Veat. Thank you. Law firm Veat. Voice actors who appeared in ‘The Elder Scrolls 5: Skyrim’ have come forward to protest the use of AI trained with their voices for mods (user-created content). ‘Mod (MOD)’ refers to user-created content that involves partially modifying or adding files within a game to play and share with others. In Korea, where online and mobile games are dominant, mod creation is not as active, but in single-player games, mods allow users to change the appearance of characters or add user-created weapons and monsters, and large-scale mods that modify the overall game system or change the game background are also created. ... The AI tool that caused the problem, ‘ElevenLabs’, was launched in 2022 and gained popularity among game mod developers. The sharing of AI-generated content also became more active as ‘Nexus Mods’, a website where gamers share mods, allowed the use of AI voices. It’s easier for individuals to hire human voice actors to create content, so using AI voice actors is a practical solution. ‘AI voice theft’ causes uproar among game voice actors, what are the legal issues? /Source : E-Korea (https://www.ekoreanews.co.kr)