Case Studies
[Legal Information] ‘Venture Investment Act Enforcement Decree’ Amended_Venture Investment Fund Minimum Formation Amount Reduced to 10 Billion Won
A revised ordinance concerning ‘Act on Promotion of Venture Investment’ was enacted on August 23rd, streamlining venture investment regulations. This revision addresses several key issues, including streamlining the formation of venture investment funds, improving regulations related to mergers and acquisitions (M&A), and limiting joint and several liability for investors in portfolio companies. Key provisions of the revised ordinance are as follows: Streamlining the Formation of Venture Investment Funds Previously, even small startup accelerators (exellers) faced difficulties forming venture investment funds because of minimum formation requirements of 20 billion won and lower capital compared to investment corporations. The revision lowers this minimum formation amount to 10 billion won, facilitating investment in early-stage startups. Furthermore, the restrictions on the number of shareholders were eased, allowing the formation of venture investment funds with a single shareholder. Improving Regulations Related to Mergers and Acquisitions (M&A) Previously, when a portfolio company invested by a venture investment fund became part of a large conglomerate (chaebol) through an M&A, the venture investment fund held shares of the chaebol’s subsidiary, creating a potential violation of investment restrictions. The revision allows the venture investment fund to temporarily hold the portfolio company’s shares for up to 5 years in such cases. Limiting the Imposition of Joint and Several Liability for Investors in Portfolio Companies The imposition of joint and several liability for investors in portfolio companies was restricted if the executives or major shareholders of the portfolio company did not act with intent or gross negligence. These revisions, aligning venture investment regulations with practical realities, are expected to serve as a foundation for venture investment fund formation and foster increased investment in early-stage startups. For more details, please refer to the press release and related articles from the Small and Medium Business Administration: https://www.korea.kr/news/pressReleaseView.do?newsId=156521142. Law Firm Veat provides expert legal counsel regarding the formation and operation of venture investment funds based on the Venture Investment Act. If you require advice regarding the formation and operation of venture investment funds in connection with the Venture Investment Act revision, please feel free to contact Law Firm Veat at any time. Thank you. Law Firm Veat
[Songdo Young Representative Lawyer] Attended and presented at a discussion on establishing metaverse ethical principles.
Veat’s representative lawyer, Songdo-yeong, attended the ‘Metaverse Ethical Principles Deliberation Meeting’ held on June 26th by the Ministry of Science and ICT and presented opinions on the ethical principles draft. This deliberation meeting, held to establish ethical principles for the metaverse by collecting opinions from experts in various fields related to the metaverse, involved central government ministries and private experts, including the ‘Metaverse Economic Revitalization Private-Public TF’ and the ‘Metaverse Alliance Ethics Committee Sub-committee.’ Representatives from the Ministry of Science and ICT, the Ministry of Gender Equality and Family, the Ministry of Education, the Ministry of Foreign Affairs, the National Police Agency, and other government agencies, as well as industry, legal, academic, and metaverse-related organizations, attended. Seventeen representatives from KISDI discussed the initial draft of the ‘Metaverse Ethical Principles’ proposed. Veat Law Firm’s representative lawyer, Songdo-yeong, also presented opinions on the ethical principles draft based on Veat’s expertise related to the metaverse. If you are interested in related articles, please refer to the following link: - Ministry of Science and ICT Holds Metaverse Ethical Principles Deliberation Meeting Thank you. Veat Law Firm.
[Legal Review for Amendment of Platform Terms of Service]
Law firm Veat was commissioned by A, a company operating an IT education service platform, to review its terms of use and rules of use. A commissioned Law firm Veat to conduct legal review because it wanted to revise its terms of use and rules of use in the process of operating the IT education service platform. Law firm Veat identified that A was using two services with the same terms of use and, therefore, revised the terms of use to include provisions regarding the service content as stipulated in the terms and correctly modified provisions regarding the company’s intentional and gross negligence that could be considered unfair terms, as well as ensuring compliance with the Information and Communication Network Promotion and Protection Act (Information Network Act). In addition, when regulations exist that restrict a member’s service use partially or fully, as stipulated in the Terms and related regulations, it is necessary to inform the member of the reason and content in advance in accordance with the Information and Communication Network Promotion and Protection Act (Information Network Act), and to guarantee the opportunity to file an objection. Law firm Veat provided additional terms and regulations to comply with the law, and provided detailed guidance on each method of notification for significant changes or unfavorable changes. When launching the service, it is most important to create a well-made terms of use to operate it safely. There are many items to carefully check, such as the content of services provided by the company, the procedure for registration, restrictions on registration for certain customers, refund policies for paid services, and the responsibilities of members in accordance with legal provisions applied specifically to the service. If the terms of use are insufficient or the operating rules are changed requiring amendments,
[Consultation] Subcontract Service Contract Legal Consultation
Law firm Veat provided legal advice regarding the “Act on Fair Trade in Subcontracting Transactions” (Subcontracting Act) concerning IT service construction contracts. IT service consulting company A inquired about whether, if a contract included 1) “the absence of reflection of price increases and labor cost increases in subcontract payment, and 2) a discrepancy in payment schedules between the principal and the subcontractor, the subcontractor’s payment deadline would follow the principal’s payment schedule. Based on the Subcontracting Act and the opinions of the Fair Trade Commission, Law firm Veat comprehensively reviewed the contents of this construction contract. Specifically, considering examples of corrective measures related to unfair terms of the Fair Trade Commission, we carefully examined whether this construction contract’s terms posed a risk of being considered an unfair term. The Subcontracting Act aims to prevent the subcontractor from being unilaterally disadvantaged due to the economic disparity between the principal and the subcontractor in subcontract transactions. If a violation of Article 3(4) of the Subcontracting Act’s “prohibition of unfair terms” occurs, corrective measures may be recommended or mandated, and a fine may be imposed, not exceeding twice the subcontract payment amount. Furthermore, because the principal violating the duty to prohibit unfair terms may be penalized with a fine equivalent to twice the subcontract payment, it is advisable to obtain a legal review by an expert prior to proceeding with the contract, particularly regarding whether an unfair term applies (Articles 25 and 25(3) of the Subcontracting Act). Law firm Veat offers advice to ensure compliance with the Subcontracting Act based on various consulting cases related to the Subcontracting Act and construction contracts. If you need legal advice regarding the Subcontracting Act and construction contracts, please contact Law firm Veat. Thank you. Law firm Veat
[Consulting] Representing the investor, drafting subscription agreements and shareholder agreements with existing investors.
Law firm Veat accepted the request from the investor and drafted a share purchase agreement, and prepared shareholder agreements between the existing investor and shareholders in Korean and English versions. Veat, an IT venture company based on artificial intelligence (AI) technology, requested Law firm Veat to provide shareholder agreement drafting and legal advice regarding rights and interests with existing investors ahead of raising new investments. In response, Law firm Veat reviewed the 2021 Bloomberg League Table investment terms and drafted a share purchase agreement from Veat’s perspective. Furthermore, it reviewed the parts conflicting with the existing investor’s rights and proposed adjustment methods, and prepared shareholder agreements in Korean and English versions reflecting these revisions. When negotiating with investors, it is important to confirm suitable grounds and adjustment plans that investors can accept, not just to review investment terms and draft contracts; to present this in an appropriate format and wording">. Law firm Veat achieved 4th place based on the number of transactions in the 2021 Bloomberg League Table. Building on over several hundred investment-related legal advisory experiences, Veat has accumulated its unique know-how, and helps to ensure that new investments are conducted quickly and efficiently based on this know-how. If you need legal advice related to investments, such as drafting share purchase agreements, including shareholder agreements, preparing Korean and English versions of shareholder agreements, or negotiating with investors, please feel free to contact Law firm Veat. Thank you. Law firm Veat
Law firm Veat, provides legal review of software supply agreement.
Startup A Co. requested a legal review of the software supply agreement with the software development company upon receiving solution software as it involved procuring solution software from the software development company. Law firm Veat comprehensively reviewed the contract between Startup A Co. and development company B regarding the procurement of solution software from the supplier’s perspective. Startup A Co. aimed to conclude a perpetual license agreement for the solution software and, based on this, minimized the potential for disputes by conducting a re-examination of the usage permission period, contract renewal, and the results of the service to ensure a thorough legal review by Law firm Veat as requested by Startup A Co. Law firm Veat boasts partners and attorneys with deep understanding of information technology (IT) including Baek Seung-cheol Partner Attorney, An Il-won Partner Attorney (formerly a developer), and Choi Seong-ho Representative Attorney (graduated from Seoul National University Department of Computer Science) who possess both IT expertise and legal knowledge. If you need legal review of service contracts related to software, intellectual property rights, or usage permission agreements, please feel free to contact us at any time. Thank you. Law firm Veat
Law firm Veat - Legal Review of Radio Media Advertising Agency Contract
Law firm Veat was commissioned by A, a company operating an e-commerce platform, to conduct legal review of advertising agency contracts before running advertisements on radio media. As A was conducting its first advertising campaign through radio media, it requested Law firm Veat to review the contracts. In response, Law firm Veat, based on its experience reviewing advertising agency contracts, clarified unclear points and provided comprehensive legal review opinions. When operating a startup or a small and medium-sized enterprise, many contractual relationships arise, and it is good to be cautious to avoid risks for the company. Law firm Veat is a law firm that deeply understands startups and provides specialized legal advice for startups based on its experience providing general corporate advice to many startup companies. If you need legal review of advertising agency contracts, etc., in the process of operating a startup or an e-commerce platform, please contact Law firm Veat. Thank you. Law firm Veat
[Consultation] Copyright Issues Regarding Online Performances Legal Review
A Corporation, which operates a performance platform, aimed to hold online performances in response to the COVID-19 situation and inquired with Law Firm Veat regarding copyright issues related to providing services where singers perform online. Law Firm Veat conducted a comprehensive review to determine if there was a risk of copyright infringement in the provision of online performances and replay services, and provided legal advisory opinions. In particular, regarding online performances, Law Firm Veat focused on the issue of whether it fell under the rights of “Performance, Broadcasting, or Transmission” as defined in the “Copyright Act,” and provided a review opinion in response to A Corporation’s inquiries. Law Firm Veat provides legally optimized solutions for the protection of intellectual property through the establishment and operation of intellectual property protection systems, and in-depth understanding and interpretation of related laws and policies. If you need legal review related to online performances or the “Copyright Act,” please contact Law Firm Veat. Thank you. Law Firm Veat
Law review and grant procedure, legal review provision.
A Corp., which operates an online electronic commerce platform, requested Law firm Veat to draft stock option agreements for non-employees. Law firm Veat conducted legal review of the stock option agreements for non-employees requested by A Corp. regarding the legal review and granting procedures. To ensure legitimate stock option grants in accordance with the “Companies Act” and the “Special Act for Promotion of Venture Companies” (abbreviated as the “Venture Companies Act”), Law firm Veat conducted legal review of the stock option agreements requested by A Corp. and thoroughly reviewed procedures such as shareholder meetings and articles of incorporation amendments, providing comprehensive legal opinions. Law firm Veat is conducting legal consulting services for reviewing and implementing stock option agreements and granting procedures. If you need legal review of stock options or stock options, please feel free to contact Law firm Veat at any time. Thank you. Law firm Veat
Law firm Veat: Legal review of the possibility of registration of Venture Capital Company as co-GP of Venture Capital Investment Association.
Law firm Veat responded to inquiries regarding the possibility of registration as an investment company for venture business investment trust, managed by a joint GP of the venture business investment trust, and provided legal review. During the merger process between A and B companies, which was handled by Law firm Veat, it was necessary to conduct a legal review to determine if A, which was not a venture business financial services provider of the venture business investment trust and was a joint GP, would be subject to legal restrictions regarding the registration of an investment company for venture business investment under the Venture Investment Act (abbreviated: Venture Investment Act). Law firm Veat meticulously reviewed relevant laws and regulations, including the Venture Investment Act and the Act on Financial Transaction and Secret Protection, and provided a legal review opinion regarding the possibility of registration as an investment company for venture business investment for the joint GP of the venture business investment trust. Based on the know-how accumulated in the legal advisory market for investors, such as accelerators, angel investors, and venture capital firms, Law firm Veat provides legal review advisory from various perspectives related to investment. If you are a person who needs the help of a legal expert because the registration requirements for venture business financial services providers, joint operational executors, and venture business investment trusts are unclear, please feel free to contact Law firm Veat. Thank you Law firm Veat