Review of the Articles of Association for Employee Stock Options in Accordance with the Revised Venture Company Act

Law firm Veat received a request from venture company A (hereinafter referred to as "the client"). We performed a review of the articles of association in accordance with the "Special Act on the Promotion of Venture Companies" (hereinafter referred to as "the Venture Company Act").

The startup advisory team of Law firm Veat thoroughly reviewed the existing articles of association of venture companies in accordance with the amended Venture Company Act. In particular, we comprehensively reviewed whether to reflect the revised legal matters centered on the clauses related to the granting of stock options, and revised the articles of association’s clauses related to stock options to provide to the client.

At the same time, we provided the client’s management team with a detailed explanation of the revision of the Venture Company Act and its impact.

What is the "Special Act on the Promotion of Venture Companies" to be enforced on July 31, 2024?

The "Special Act on the Promotion of Venture Companies" changed its name from the "Special Act on the Promotion of Venture Companies" and changed from a temporary law that set the application period of the law to December 1, 31, 2027, to a permanent law. Through this, a legal basis has been established to enable more sustainable and stable support for venture companies.

We officially introduced a performance-based stock system by articles of association, along with stock options, which plays an important role in attracting and retaining talent.

In particular, a venture company support specialized institution system was newly established, enabling the Minister of SMEs and Startups to designate a specialized institution for the revitalization of venture companies. Through this, it is possible to provide long-term and systematic support for venture companies.

Venture investment type requirements have been clarified, meaning that venture companies must be evaluated by a venture company confirmation institution to have the corresponding requirements to be recognized as a venture company, thereby strengthening the transparency and reliability of venture companies.

Because being recognized as a venture company allows you to enjoy various tax, financial, personnel, location, and overseas expansion related benefits stipulated in the Venture Company Act and related laws, we recommend that you receive legal advice through a venture company law firm to find out whether you are eligible for the Venture Company Act and what areas you can receive legal assistance.

Venture-focused law firm Veat was selected as a notable boutique law firm in Legal Times 2023 Corporate and M&A league table. This demonstrates that Law firm Veat provides professional legal services in various fields and is recognized as a notable law firm in the corporate legal market.

Law firm Veat will continue to actively respond to changing legal environments and strive to provide clients with the best legal solutions.

If you have any questions related to various corporate legal issues that may arise in venture companies and startups, please contact Law firm Veat.

Thank you.
Law firm Veat