Case Studies
[Legal Review] Application Development Services Agreement
Law firm Veat responded to A’s request to launch a location-based goods rental transaction platform and reviewed the contract draft from the contractor’s perspective. A, which is preparing a location-based goods rental transaction platform, commissioned Law firm Veat to review the contract draft regarding the contract agreement with the application development company from the contractor’s perspective. Law firm Veat reviewed the contract draft based on A’s desired application specifications from the contractor’s perspective and added clauses regarding pass/fail review, intellectual property infringement guarantees, and prohibition of sub-contracting fees. Regarding application and software development service contracts, it is crucial to specifically define the content and scope of development in the related contract. Furthermore, cases frequently arise regarding whether the content of the deliverables changes during the contract period and the responsibility for the associated costs. Therefore, it is necessary to clearly and specifically draft the contents agreed upon by the contractor and subcontractor within the service contract to prevent unnecessary disputes. Law firm Veat provides advice on various disputes related to application, software development, and maintenance based on its experience assisting with the preparation of service contracts and development contracts to prevent unnecessary disputes. Please contact Law firm Veat if you need assistance drafting service contracts and development contracts. Thank you. Law firm Veat
[Consultation] Review of copyright law and unfair trade act violation regarding business transfer.
Law firm Veat undertook a review of laws concerning business transfer related copyright laws and violation of the Act on Fair Trade, commissioned by A Game Development Company.
[Consultation] Drafting logistics outsourcing agreements between parent company and subsidiary
Law firm Veat prepared the consignment agreement for A, a company operating a used car export brokerage platform. A, which operates as an international logistics forwarder as defined by the “Basic Logistics Policy Act” while also assuming responsibility for logistics and transportation, requested that Law firm Veat draft consignment agreements for its newly established subsidiary and prepare the agreement. Accordingly, Law firm Veat reviewed A’s platform structure, responsibility for logistics, and its role in the transportation process to draft the consignment agreement. The invoice issued by A to the buyer included clauses concerning Incoterms (INCOTERMS), which are used in international trade, creating the possibility that A would be interpreted as the seller in a sales contract and as the freight forwarder in a transportation contract. Therefore, it was necessary to identify and correct potential legal risks in advance due to vague clauses that could lead to differing interpretations of A’s responsibilities. Furthermore, Law firm Veat verified the need for PG registration and the reporting obligation under the Foreign Exchange and Foreign Trade Act, according to A’s platform structure, to help A operate the platform safely in the future. If you need legal advice regarding consignment agreements, international trade agreements, and international logistics forwarding business, please feel free to contact Law firm Veat at any time. Thank you. Law firm Veat
[Consultation] Review of whether a virtual asset business operator registration target is applicable for virtual asset investment services.
Law firm Veat received a request from online fintech company A for reviewing whether the company fell under the “Act on Reporting and Use of Specific Financial Transaction Information” (Specific Financial Transaction Information Act) regarding virtual asset businesses. Online fintech company A, while preparing a virtual asset investment platform, was concerned about whether it qualified as a virtual asset business and virtual asset transaction agent, so they requested legal advice from Law firm Veat. Accordingly, Law firm Veat, based on the “Specific Financial Transaction Information Act” and the Financial Services Commission’s Virtual Asset Business Registration Manual, provided legal review opinions regarding the virtual asset transactions, item recommendations, investment lectures, and buy recommendations conducted on the virtual asset platform, and the necessity of virtual asset business registration and whether virtual asset transaction agent and virtual asset transaction brokerage were applicable. According to Article 2 of the “Specific Financial Transaction Information Act,” a virtual asset business is defined as ‘a person engaged in the business of selling • buying, exchanging, transferring, storing • managing, brokering • introducing virtual assets.’ The Financial Services Commission’s Virtual Asset Business Registration Manual provides examples to help understand the scope of virtual asset businesses, however, from a corporate perspective, it may be difficult to determine whether their virtual asset service and platform are subject to virtual asset business registration. Law firm Veat provides professional legal advice based on its experience advising numerous virtual asset and blockchain companies regarding virtual asset investments and virtual asset services. If you need legal advice regarding virtual asset investment, virtual asset-related services, virtual asset business registration, or whether a virtual asset business is applicable, please feel free to contact us at any time. Thank you. Law firm Veat
[Consulting] Legal advisory for GP registration for the use of agency-exclusive PEF.
Law firm Veat provided legal advisory services related to GP registration for the operation of institutional-exclusive PEFs upon receiving a request from A Investment Corp. A Investment Corp. needed to prepare relevant documents to register a GP for institutional-exclusive PEFs in accordance with the amended Investment Trust Act. In this regard, Law firm Veat prepared documents for registration as a GP capable of operating institutional-exclusive PEFs, considering that the “Act on Capital Markets and Investment Securities” had been amended, leading to a reorganization of the classification of private equity funds from management-participation type PEFs to institutional-exclusive PEFs, and particularly, considering changes to the personnel requirements that a GP must possess, Law firm Veat reviewed whether A Investment Corp. could meet the personnel requirements. On October 21, 2021, the revised “Act on Capital Markets and Investment Securities” was implemented. Institutional-exclusive private equity funds are private equity funds in which investors are restricted to invest, considering expertise and risk management capabilities, and institutional-exclusive private equity funds can be established and operated by a non-financial investment company (GP). According to the amended Investment Trust Act, all existing management-participation private equity funds will become institutional-exclusive private equity funds, but the operating methods will be applied differently depending on the fulfillment of the requirements of a limited liability company member. Therefore, if you are currently managing a management-participation private equity fund or will be managing a newly established institutional-exclusive private equity fund, it is necessary to seek help from experts with extensive advisory experience in relation to the requirements under the amended Investment Trust Act. Law firm Veat is assisting you in complying with the amended Investment Trust Act based on its extensive experience in PEFs and GP registrations. If you need legal advisory services related to management-participation private equity funds, institutional-exclusive private equity funds, and registration of an operating company GP, please contact Law firm Veat at any time. Thank you. Law firm Veat
[Consultation] Review of SAFT contracts related to virtual asset investment.
Law firm Veat reviewed the SAFT agreements for A, a company that develops and supplies mobile games, upon request. A, a company that develops and supplies mobile games, is preparing for a global service launch and, during the process of issuing new tokens related to the corresponding mobile game, requested a review of the SAFT agreement in Korean and English versions. An SAFT (SIMPLE AGREEMENT FOR FUTURE TOKENS) agreement is a type of investment agreement that specifies the transaction of tokens. Through the SAFT agreement, you can obtain tokens. Law firm Veat, at A’s request, reflected the lock-up period and vesting period clauses for the tokens, and added the clause stating that the seller can cancel the token sales at its discretion. Furthermore, we added statements and guarantees that specify the obligations of the buyer to prevent money laundering, prevent corruption, and prevent terrorism financing, and added a clause allowing the contract to be terminated if there is a violation of the obligations. Law firm Veat provides assistance so that you can comply with laws such as the “Act on Reporting and Use of Financial Transaction Information” (Specific Financial Information Act) and the “Act on Financial Investment and the Capital Market” (Capital Market Act) regarding virtual asset investments, SAFT agreements, and coin sales. If you have any questions regarding virtual asset investments, SAFT agreements, or coin sales, please contact Law firm Veat. Thank you. Law firm Veat.
[Criminal Matters] Acquitted in Criminal Complaint Case Due to Project Failure After ICO
Law firm Veat defended A, the representative of the cryptocurrency exchange developer, securing an acquittal based on the lack of evidence of violation of the Act on Restrictions of Fraudulent Transactions and Related Transactions. Case Overview Representative A was involved in an ICO to develop and launch a cryptocurrency exchange capable of implementing various investment strategies around 2019. After the exchange was launched, the price of the ICO tokens fell due to a downturn in the cryptocurrency market, and some ICO participants filed a criminal complaint against Representative A for violation of the Act on Restrictions of Fraudulent Transactions and Related Transactions. Veat’s Assistance Law firm Veat actively demonstrated that Representative A had fully implemented all plans disclosed during the ICO process, that all funds obtained through the ICO were used for the development and operation of the cryptocurrency exchange, and that significant efforts were made to meet the expectations of the ICO participants. Investigation Agency’s Disposition As a result, the relevant investigative agency determined that there was no evidence of violation of the Act on Restrictions of Fraudulent Transactions and Related Transactions against Representative A and issued a decision to drop the case and a dismissal of charges. Law firm Veat, based on its professional understanding of virtual currency and blockchain, was able to conduct efficient communication and provide appropriate responses from the police investigation stage, ultimately contributing to the swift and safe resolution of the case. Thank you. Law firm Veat Regards
[Consultation] Legal advice regarding flip from domestic entity to Singaporean entity.
Law firm Veat handled legal advisory services including the drafting of English stock exchange agreements and investment agreements related to the case concerning the transfer of a shareholding from a Korean entity, A Startup Investment Corp., to a Singaporean entity through a “Flip” process. A Investment Corp. intended to conduct a “Flip” from a Korean entity to a Singaporean entity using a stock exchange method. Accordingly, Law firm Veat prepared English stock exchange agreements and investment agreements between Korean shareholders and the Singaporean entity, as well as investment agreements between Korean investors, the Singaporean entity, and stakeholders. Specifically, this English stock exchange agreement reflected the contents of existing shareholdings of type shares, and the investment agreement in the Singaporean entity reflected the restrictions on the disposal of shares by stakeholders under existing Korean entity investment agreements, the right of first refusal, tag-along rights, and a claim for parallel sales. The reason why domestic entities intend to conduct a “Flip” to overseas locations is diverse, including easy attraction of overseas capital and investment, entry into overseas markets, and provision of services to overseas users. However, considering the various conditions, such as the consent of the investor, understanding between existing and new shareholders, when conducting a “Flip,” it is recommended to proceed with the help of experts who have a lot of experience in this area. Law firm Veat is conducting swift and efficient legal advisory services based on numerous “Flip” experiences, and provides comprehensive legal advice, including the setting of a structure suitable for your company’s “Flip” plan, the drafting of stock exchange agreements and investment agreements, through direct consultations with lawyers. If you are interested in “Flip,” please feel free to contact Law firm Veat at any time. Thank you. Law firm Veat
[Consultation] Drafting Game Project Financing Agreement
Law firm Veat drafted the Game Project Financing Agreement for A Investment’s request, taking into account the request. A Investment paid investment funds to the game developer and, in return, received rights to the revenue generated from the game and NFT-related rights from the developer. They requested a game project financing agreement that reflected the agreed-upon terms with the developer. Law firm Veat drafted a game project financing agreement for A Investment, reflecting the revenue increase of the game developer due to the payment of investment funds. Additionally, it stipulated the right to receive all revenue from NFTs issued and NFT-related community operation rights, and provisions for the event of changes in game development schedule, content, and IP rights, and a clause granting A Investment’s prior consent when the game service is terminated or suspended, ensuring the security of A Investment’s rights. Drafting of project financing agreement reflecting detailed agreements regarding investment funds and repayment, development schedule, revenue distribution, reporting obligations, and investment fund recovery. Project financing relies on the profitability of a project to provide funding, so when drafting a project financing agreement, you need to write regulations related to the scope of the business, investment fund payments, revenue distribution, reporting obligations, and investment fund recovery, in line with the detailed agreement between the investor and the developer (implementer). Law firm Veat, based on its understanding of investment, project financing, and game development, helps investors and developers (implementers) to successfully conduct a project financing agreement by properly reflecting the agreement between the two parties. Please contact Law firm Veat if you need a game project financing agreement drafted. Thank you. Veat Law Firm.
[Consultation] Review of franchise agreement for registration of information disclosure documents under the Franchise Business Act.
Law firm Veat received a referral from A, a company operating a franchise business, and conducted a legal review of the franchise agreement. Prior to finalizing the franchise agreement, A requested a legal review of the franchise agreement in order to proceed with the registration of the disclosure document. Law firm Veat, in accordance with the Franchise Business Act (hereinafter referred to as the Franchise Business Act), added essential items that must be included in the franchise agreement and amended contractual provisions potentially violating the Franchise Business Act. Items to Prepare Before Finalizing a Franchise Agreement Companies intending to operate a franchise business must prepare a disclosure document registered with the Fair Trade Commission and a franchise agreement before finalizing the agreement. The Franchise Business Act stipulates items that must be included in the franchise agreement and the obligation to provide preliminary information, and the obligation to retain records for 3 years from the date the franchise business transaction is terminated. This highlights the importance of preparing a proper franchise agreement. Penalties for Violations of the Franchise Business Act If a company violates the major obligations set by the Fair Trade Commission to promote fair trade in franchise business transactions, it may receive a corrective action order from the Fair Trade Commission and be required to disclose this fact. In addition, it may be subject to a fine exceeding 50 million won, a penalty of up to 10 million won, or criminal prosecution. Law firm Veat provides legal advice to numerous franchise companies and offers advice on the drafting of franchise agreements and other matters related to the Franchise Business Act. Please contact Law firm Veat if you need legal advice on the Franchise Business Act or the drafting of franchise agreements. Thank you. Law firm Veat