What kind of report is needed to transfer a construction business?

A construction business is not a simple business asset but a business that must meet legal registration standards, so transfer is not recognized through a simple contract alone.

According to Article 17 of the Framework Act on the Construction Industry, those who wish to transfer a construction business must report to the Minister of Land, Infrastructure and Transport, and the actual procedure is conducted through the relevant Mayor/Provincial Governor or entrusted institution (such as the Construction Association of Korea).

The transferor and transferee must jointly submit a construction business transfer report, and when reporting, attachments must include ▲ copy of transfer contract, ▲ documents related to transferee registration, ▲ construction business transfer notice and opinion adjustment results, ▲ mutual aid association opinion (if applicable), ▲ owner consent (if there is construction in progress), etc.

Also, the transferor must publish a notice in a daily newspaper or association website based on the location of the main place of business, and the notice content must include the planned transfer date, business type, deadline for stakeholders to submit opinions, etc.

After that, the Mayor/Provincial Governor confirms whether the transferee meets the registration standards, and from the time the report is accepted, the transferee succeeds the transferor's construction business status.

Therefore, construction business transfer is valid only after going through administrative reporting, public notice, and acceptance procedures, not just a simple contract, and approval may vary depending on whether the transferee meets the registration requirements.

In practice, there are many cases of rejection due to omitted documents or notices, so it is safe to go through review by an attorney experienced in M&A or an M&A advisory institution before construction business transfer and reporting.

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