CONTENTS
- 1. The Client Who Requested Merger and Acquisition Advisory
- - The Client Facing a Share Acquisition and Merger
- 2. Mergers and Acquisitions, Share Acquisition and Merger by Absorption
- - Points to Note in a Merger and Acquisition
- 3. Corporate M&A: Assistance Provided by the Corporate Specialist Attorney
- - Contract Structure Design and Risk Review
- - Regulatory and Tax Response
- - Procedural Operation and Coordination of Stakeholders
- 4. Result of the M&A Advisory
- - If You Need Assistance with a Merger and Acquisition
1. The Client Who Requested Merger and Acquisition Advisory
Company B, which was planning a merger and acquisition, requested advisory from a corporate specialist attorney regarding the legal risks that could arise in the process of acquiring the shares of a promising startup and the merger, such as conflicts of interest among investors, intellectual property issues, and procedural requirements.
The Client Facing a Share Acquisition and Merger
Company B, which requested merger and acquisition advisory, reviewed the acquisition of a promising startup in order to enter a new business and strengthen its technological competitiveness.
The startup possessed original technology, but due to delays in fund-raising and a complex shareholder structure, it was difficult for it to grow independently.
Company B planned a strategy of first securing an initial 60% of the shares to obtain stable control, and then integrating the technology and personnel into its own company through a merger.
However, in the course of the transaction, legal risks arose, such as conflicts of interest among internal investors, non-disclosure contract clauses, and the attribution of intellectual property rights.
In particular, in the merger procedure following the share acquisition, procedural requirements such as the succession of employee employment, the protection of creditors, and the resolution of the general shareholders' meeting had to be satisfied.
Accordingly, the client came to a corporate specialist attorney and requested advisory.
2. Mergers and Acquisitions, Share Acquisition and Merger by Absorption
▶ Share Acquisition
The procedure is relatively simple, but risks may arise in the calculation of the transaction value, the change of the shareholder structure, and tax treatment.
Therefore, it is important to secure the appropriateness of the transaction value through external valuation and expert review, and to check tax risks in advance in transactions with specially related persons.
▶ Merger by Absorption
Since the organization, assets and liabilities, and personnel are all succeeded, procedural requirements such as the resolution of the general shareholders' meeting, the protection of creditors, and the succession of employee employment must be thoroughly prepared.
To minimize the disputes anticipated in the merger process, it is necessary to check financial, contractual, and intellectual property risks through prior due diligence, and to systematically manage the procedure and stakeholders.
Points to Note in a Merger and Acquisition
ㆍ Inspecting hidden risks through financial and legal due diligence
ㆍ Merger procedures and coordination of stakeholders
ㆍ Tax and regulatory response
A share acquisition and an absorption merger go beyond the simple conclusion of a contract; they are complex procedures that require multilayered legal review under the Commercial Act, tax laws, the Monopoly Regulation and Fair Trade Act, and others.
If they proceed without advance preparation, unexpected risks such as nullity of the merger, tax burdens, and disputes among stakeholders may arise, so advice from a specialist attorney is essential.
3. Corporate M&A: Assistance Provided by the Corporate Specialist Attorney
The key issues in this case were the appropriateness of the transaction price calculation, the attribution of intellectual property rights, the coordination of stakeholders, and procedural legitimacy, all of which could arise during the share acquisition and merger.
In particular, conflicts of interest among internal investors, undisclosed contracts, and the issues of employee succession and creditor protection were key issues, and accordingly, assistance focused on contract design, tax and regulatory response, and procedural operation was required.
The corporate specialist attorney organized a task force composed of M&A experts centered on these issues and provided substantive assistance, including stabilizing the transaction structure, preventing potential disputes, and securing procedural legitimacy.
Contract Structure Design and Risk Review
The M&A specialist attorney specifically reflected the criteria for calculating the transaction price and the conditions for the attribution of intangible assets and intellectual property rights in the share purchase agreement and the merger agreement.
By clearly defining the scope of liability and the limit of damages in the event of a breach of warranties and representations under the contract, the attorney minimized the possibility of potential disputes arising.
In addition, the attorney reviewed the possibility of disputes anticipated after the merger and designed in advance a contract structure and protective measures capable of responding to them.
Regulatory and Tax Response
The corporate specialist attorney analyzed in advance the tax risks, such as corporate tax, capital gains tax, and value-added tax, that could arise during the share acquisition and merger.
The attorney designed the tax structure so that the transaction structure would not bring about any disadvantage under the tax laws, and prepared tax-saving measures for the period after the merger.
In addition, the attorney reviewed whether the transaction was subject to a business combination report to the Fair Trade Commission and, where necessary, prepared the submission materials, thereby blocking the regulatory risks of the M&A in advance.
Procedural Operation and Coordination of Stakeholders
By systematically managing essential procedures such as the startup's general meeting of shareholders and the resolution of Company B's board of directors, the attorney secured the legitimacy of the merger procedure.
The attorney coordinated in advance the possibility of conflicts of opinion among stakeholders such as investors, creditors, and employees, and negotiated the conditions for employee succession and the adjustment of the equity structure.
Through this, the attorney secured the stability of the organization and corporate operation after the merger and acquisition, and prepared for anticipated legal and financial disputes.
4. Result of the M&A Advisory
Company B completed the absorption merger procedure after acquiring the shares of the startup.
Through the assistance of the corporate specialist attorney, the company secured technology and core personnel and integrated them into its existing services, strengthened its research and development capabilities for new businesses, and was able to reduce the risks that could arise throughout the entire transaction process.
If You Need Assistance with a Merger and Acquisition
A company's share acquisition or absorption merger goes beyond the simple conclusion of a contract; it requires multilayered legal review, including contract structure design, coordination of investor interests, and tax and regulatory review.
If preparation is insufficient, risks such as nullity of the merger, unexpected tax burdens, and disputes among stakeholders may arise, so the assistance of an experienced specialist attorney is essential.
This firm provides comprehensive support from transaction structure design to due diligence, contract review, and procedural management, and makes its best efforts to ensure a stable transaction.
The firm has many corporate specialist attorneys with experience at large corporations and public institutions, and a number of experts with abundant field and practical experience communicate in real time to establish tailored strategies.
If you are facing a merger and acquisition and require legal advice, please request assistance through 🔗Legal Consultation Reservation.
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