The Korea Times published an article, last week, on Korea’s Fair Trade Commission (FTC) that sheds light on a business and, also, consumer-friendly program offered by the FTC. The FTC has been, strongly, criticized by the main-stream for using the powers of the Commission to fight inflation in Korea in order to appease the Administration and the citizens. Some of the most liberal, now, are even claiming that the FTC is not going far enough. The FTC has no friends other than the Administration in near sight.
Continue readingCategory: Korean M and A
Is the Korea-U.S. FTA Dead at the Korean National Assembly? Watch the Streets.
A battle is underway in the Korea National Assembly between the radical left on the one side and the moderates and the right on the other side. The Korea-US FTA resembles the Korea-EU FTA, that has been signed into law, but many of the radical liberals in Korea believe that if America is out of the picture, that Korea will be unified with the North. Many of these liberals don’t care if the flag is a North Korean or South Korean flag. As with most issues between
Continue readingLimited Liability Companies under the Amended Commercial Code of Korea
Yuhan Hoesa is a form of a company in Korea similar to a Western Limited Liability Company. It has only been utilized, to date, by small privately held corporations and some financial companies under the Korean Asset-Backed Security Act, Korean Capital Markets Act, or the Korean Financial Investment Services Act. The revised Korean Commercial Code (KCC) allows for the more efficient and effective utilization of the Yuhan corporate entity. I will be advising the use of this company form for some of my clients. In the past,
Continue readingKorean Corporate Tax Changes Affecting Businesses in Korea
I hate taxes, as I assume you also do, but my M & A and other corporate clients in Korea may be hating Korean taxes just a little bit less after the recent changes in Korean Corporate Tax Law. First, the Enforcement Decree of the Corporation Tax Act of Korea was amended this year to allow expanded preferential tax treatment in an acquisition of a Korean company. Before the present amendment, a majority/controlling shareholder could avail of “preferential tax treatment” in Korea only if the shareholder in
Continue readingClassification of Directors in Korea under the Korean Commercial Code: Inside, Outside and Other Directors in Korea
In Korea, all company directors are listed on the Korean Commercial Register. If you are doing business with a Company, always check the Commercial Register to determine if you are doing business with a person authorized to do business with your company. Additionally, if you have been told that you are a director of a company (I have seen this trick a few times) make sure that you are listed on the Commercial Register. The members of a Korean board of directors may be listed as either:
Continue readingResolving Korean Joint Venture/Partner Disputes without an Attorney — Maybe
Conflicts are inevitable, but not unresolvable. Since the circumstances surrounding Korean JV/partner conflicts can vary greatly and since the personalities of the involved parties play a major role in the confrontation, there may not be any ready-made prescription for the solution. There are however, some general ideas that may help in resolving conflicts in the local business environment. Personal ConsiderationsWestern logic, alone, is not usually sufficient to influence a Korean counterpart. Re-opening or referring to the exact stipulations of a contract is not desirable; it has been
Continue readingEbay Gmarket Merger Approved by Korean Fair Trade Commission
The Korean Fair Trade Commission (FTC) has approved the merger of Ebay Auction with Gmarket. The companies combined, based on last years numbers, will control more than 72% of the domestic online shopping market. The remainder of the market is split, primarily by 11 Street (SK Telecom unit) and Interpark. Ebay purchased Gmarket in 2009 for nearly USD 1.3 billion and was planning this merger, since the purchase. ___SeanHayes@ipglegal.com
Continue readingBasic Agreements for Doing Business in Korea
Below are the basic Korean start-up agreements, normally, necessary for doing business in Korea. The list is not exhaustive. We will be writing on all of these agreements over the next couple of months. Please note we have articles about Korean shareholder (JVC), distributor, license and other agreements already posted. Korean Stock Corporation (Chusikhaesa) Shareholder Agreement/Joint Venture Agreement Article of Incorporation Intellectual Property Assignment/License Agreement Confidentiality/Nondisclosure Agreement Employees and Management in Korea Employment/Contractor Agreements Work Rules Confidentiality Agreement Korean Customers/Vendors Service Agreement License Agreement Sales/Distributor Agreements
Continue readingDoing Business in Asia: Due Diligence, Agreements, Attorneys and Street Smarts
International attorneys mention in blogs, speeches, journal articles and in the press, frequently, that doing business in Asia is different and much more risky than in the West. Maybe we are not getting the word out clear enough. Understand, we are not trying to sell you anything you don’t need —-LISTEN UP – Get someone who works locally to execute these deals, get a carefully drafted agreement and engage in a little due diligence. If not, we love litigation, winding-up joint ventures and filing criminal complaints. These
Continue readingStock Purchase/M & A Due Diligence Check List for Korean Companies
A client called and asked if I would draft a due diligence check list in order to advise on due diligence necessaries. The client intends to purchase the stocks of a distressed 700+ employee Korean company. He noted that his staff would do the actual due diligence and all we should do is prepare the check list. I sent him this list for free and advised him to get someone to do the due diligence that knows what to look for. Hopefully, he will take my advice,
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