I have an inquiry about small and medium-sized business M&A. What happens if I do not file a business combination notification?

Hello. I am the M&A attorney at Daeryun Law Firm (Limited). I see you are preparing for a small and medium-sized business M&A.

Business combination notification is, in principle, a post-notification filed after the combination is completed.

However, if one of the combining companies is a large-scale company with total assets or sales of 2 trillion won or more in the immediately preceding fiscal year, prior notification is mandatory.

This is decided in consideration of the impact of the combination on companies and the economy.

Depending on the type of transaction, the notification period varies. Details are as follows.

▶ Stock acquisition

Large-scale company: prior notification after contract date and before completion of execution

Other than large-scale company: within 30 days from the date of stock delivery, etc.

▶ Merger

Large-scale company: prior notification after contract date and before completion of execution

Other than large-scale company: within 30 days from the merger registration date

▶ Business transfer

Large-scale company: prior notification after contract date and before completion of execution

Other than large-scale company: within 30 days from the date of completion of payment for business transfer

If you fail to file a notification despite having an obligation to file a business combination notification, or if you file a false notification, an administrative fine will be imposed.

For business operators, business operator associations, and the same person who controls a company belonging to a public disclosure group of companies, or a public interest corporation, an administrative fine of up to 100 million won may be imposed.

Also, in the case of executives or employees of a company, business operator association, or public interest corporation, an administrative fine of up to 10 million won may be imposed.

In small and medium-sized business M&A, what is important is to prevent such legal risks in advance.

Therefore, before proceeding with the transaction, I would recommend that you receive legal advice from an M&A attorney and proceed with your small and medium-sized business M&A.