One key to success, in Korea, is to get the Korean joint venture structured by a professional from the start of the relationship with your joint venture partner(s). Don't just download a joint venture agreement or partnership agreement from the internet. Vet your partner and, also, learn the expectations of your partner.
We know you have "limited funds" (we all have limited funds -even multinationals and Donald Trump have limited funds) choosing to forgo having the deal structured by a professional and just downloading an agreement off the internet will, likely, lead to you having even less funds, less time and less hair.
Do not be what my father likes to call young kids these days - knuckleheads. I saw cases that ended up in the Prosecutor's Office (we even filed some) and cases that lead to deportation. The amount of money that it costs to have a professional draft these agreements, must, be considered part of the cost of doing business. The amount should be no major issue for most.
Hey, I recently did a deal where one of the partners exclaimed that your final invoice was less than the cost of his pizza oven. I love having our services being compared to a pizza oven. That agreement, normally, will last longer than that pizza oven.
While this law firm, typically, assists multinational companies we, also, enjoy assisting some of the more entrepreneurial SMEs.
However, be prepared for some time with me. We never just slap in front of you a form agreement and have you make some comments on it. This is a waste of time and a sign of a hack.
Some basics that you lawyer, must, consider with considering your joint venture and articles of incorproation prior to starting a joint venture in Korea.
- Duties, Responsibilities, Roles, Titles and Expectations of each Partner?;
- Arbitration, Language and Forum for Dispute Resolution?;
- Management Structure?;
- Valuation, Windup, Termination?;
- Remedies for Breach?;
- Exit Strategy;
- Outside Investors;
- Due Diligence, Due Diligence, Due Diligence - Did I mention Due Diligence?;
- Limit Powers of the Representative Director?;
- Retain Power to Appoint and Remove the Representative Director?;
- Expansion Plans;
- Retain Majority Control or include other Minority Protection Clauses?;
- Investment of Proceeds.
- Hire an Independent Accountant and Utilize a Neutral REAL Statutory Auditor?;
- What are you Getting out of the Joint Venture?;
- What are you Giving Up?;
- What is the Purpose of the Joint Venture?;
- Financing Options?;
- Chushik, Yuhan etc.?;
- and The List Goes On
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.