Assistance with Mergers and Acquisitions | Advisory Case on Acquisition of Startup Shares 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.

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.

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.

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.

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.

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.