Venture company key talent acquisition secret, properly utilizing performance-based Veat stock.
Article posted in 2025-03-12 20:03:14 | VEAT
Law firm Veat successfully performed legal consultation regarding the issuance of performance-linked shares and related articles of incorporation amendment upon the request of a venture company (hereinafter "client") whose main business is the development and supply of mobile game software.
According to the "Special Act on Promotion of Venture Businesses" (hereinafter "Venture Business Act"), a venture business can utilize a 'performance-linked share issuance contract' where shares are issued on the condition of achieving certain performance goals. At this time, one of the important legal requirements is to clearly define related matters in the company's articles of incorporation.
That is, a venture business wishing to issue performance-linked shares must specifically state in the articles of incorporation the conditions for issuing performance-linked shares, the method of acquisition and disposition of shares, and performance evaluation criteria.
Law firm Veat performed a comprehensive review of the client’s existing articles of incorporation upon request and provided consultation for the establishment of essential items and the creation and amendment of relevant clauses to enable the smooth introduction of the performance-linked share system.
In particular, regarding the frequent issue of 'self-acquired shares' arising when entering into a performance-linked share issuance contract, Law firm Veat provided clear guidance on the scope permitted under the Venture Business Act and the Commercial Code to support preventing potential disputes in advance.
The acquisition of self-acquired shares is a very sensitive matter for companies, so Law firm Veat thoroughly reviewed the legality of the procedures, including procedures for acquiring self-acquired shares and requirements for shareholder resolutions, and prepared specific resolutions together to ensure that the client could secure the legality of the procedures.
As the startup and venture business ecosystem has become more active recently, companies' interest in performance-linked share issuance contracts has increased. Therefore, it is very important for a venture business to carefully review related legal issues and develop response measures with a legal expert when introducing a 'performance-linked share' system to effectively motivate the performance creation of key personnel.
During the consultation process, Law firm Veat practically reviewed whether the selection of performance-linked share issuance recipients and the setting of performance goals were appropriate, focusing on balancing the client's management objectives and legal requirements. In addition, potential risks that could arise in the evaluation and payment procedures for performance-linked shares were reviewed in advance, and measures to address them were developed together.
Through this process, the client was able to successfully introduce a performance-linked share issuance contract and establish a powerful incentive system to promote the achievement of member performance. As such, Law firm Veat provides specific guidelines for venture businesses to comply with the essential requirements of the Venture Business Act and secure legal stability when introducing and operating a performance-linked share system.
Law firm Veat is based on extensive experience and expertise in the Venture Business Act and helps various industries' venture businesses minimize legal risks and achieve stable and sustainable growth.
If you have any legal consultation needed including performance-linked share issuance contracts and other matters necessary during the company's growth process, please feel free to contact Law firm Veat.
You can also find this case study on the Law firm Veat blog below.
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