When employees and executives of the acquiring company participate in the acquisition and jointly acquire shares of the target company, review legal restrictions.

Law firm Veat received a request from a software development company to review the legal limitations regarding the possibility of employees and executives of the acquiring company participating in the acquisition process and jointly acquiring shares of the acquired company.

Veat investment team analyzed relevant laws and regulations, such as the Commercial Code and Capital Markets Act, concerning transactions involving the utilization of company opportunities to determine whether this transaction would present any legal risks, and reviewed the company's internal regulations and internal procedures, such as shareholder meetings, and informed them of the results.

Furthermore, based on the review of the legality of the transaction structure, we thoroughly examined the contract and proposed revisions for portions requiring changes.

What is a transaction involving the utilization of company opportunities?

A transaction involving the utilization of company opportunities refers to the legal principle that regulates the act of a company's employees and executives utilizing the company's business opportunities for personal gain. This generally applies to company executives, members of the board of directors, and other senior officials, and is a system designed to prevent them from infringing on the company’s interests.

The utilization of a company's opportunity for personal gain is strictly regulated by various laws such as the Commercial Code and Capital Markets Act, and legal responsibility will be imposed for violations in order to protect the company's assets and ensure corporate management that prioritizes the interests of shareholders.

Therefore, if employees acquire shares of the acquired company using personal funds during the process of a company acquiring another company, or if employees utilize a company's planned new business opportunity to establish or invest in a separate company, such actions may be considered transactions involving the utilization of company opportunities. We recommend obtaining a legal review through legal professionals with extensive experience in M&A.

Law firm Veat boasts outstanding expertise in resolving complex legal issues related to transactions involving the utilization of company opportunities and other M&A and corporate issues, and provides optimal legal solutions based on the rich experience accumulated through various corporate mergers and acquisitions (M&A) and investment advisory cases.

A deep understanding of M&A and corporate advisory, and legal solutions are one of Law firm Veat's core competencies. Based on this expertise and experience, we will assist you as a legal partner to support your successful business.

If you are concerned about various legal issues of your company, please inquire about Law firm Veat's regular legal subscription service.

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Veat Law Firm