Venture investment law legal review regarding the appointment of a compliance officer for startup planners.

Items to check to register as a startup planner

A startup planner (accelerator) refers to an entity that primarily conducts nurturing and investment in initial startups. Startup planners provide various supports to help venture companies grow and develop, playing an important role in activating the venture ecosystem.

To register as a startup planner, one must have a certain amount of paid-in capital and must have at least two full-time professional staff. In addition, directors must not be disqualified under the relevant laws, the business plan must be a realistically achievable plan, and a business plan that meets the standards specified in the relevant laws and regulations must be submitted.

In particular, according to Article 19, Paragraph 2, Sub-item 5 of the “Venture Investment Promotion Act” (hereinafter referred to as the “Venture Investment Act”), to register as a startup planner, a system must be in place to prevent conflicts of interest between the startup founder and investor, and between a specific investor and another investor.

Also, according to Article 1, Paragraph 2, Sub-item 2 of the Startup Planner Registration and Management Rules, a startup planner must designate at least one compliance officer who checks and supervises compliance with the internal control standards. This compliance officer must be a full-time employee, and a part-time employee or a short-term employee under the “Act on the Protection of Fixed-Term and Part-Time Employees” (hereinafter referred to as the “Part-time Employee Act”) cannot be appointed as a compliance officer.

According to the interpretation of the laws and the authoritative interpretations of the relevant ministries, if the conditions for appointing a compliance officer are met, it is also possible to designate a person who has been designated as a full-time professional employee at the time of registering as a startup planner. Also, even if a person holds multiple positions, if they are a full-time employee of a startup planner, they can be appointed as a compliance officer.

Practically, whether or not it is possible to be appointed as a compliance officer and whether or not it is possible to register as a startup planner can be confirmed through legal professionals with a deep understanding of corporate law and the Venture Investment Act and with extensive practical experience, so as to reduce the legal risks that may arise during the process.

Law firm Veat also provides comprehensive legal advice necessary for operating venture capital (VC), systematically supporting all processes from investment strategy development to legal due diligence, contract drafting and negotiation, and post-management.

Law firm Veat has achieved outstanding results in legal advice related to startups and venture investment. It has been selected as a finalist in three categories – ‘Korea Deal Firm of the Year’, ‘Boutique Law Firm of the Year’, and ‘Managing Partner of the Year’ – at the ‘ALB Korea Law Award 2023’ hosted by the legal business media Asian Legal Business (ALB), demonstrating its expertise. This achievement confirms the high quality of legal services provided by Law firm Veat and the high customer satisfaction.

If you need legal advice on private equity (PEF) regarding the appointment of a compliance officer for a startup planner, please contact Law firm Veat.

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