Since the purchase as part of a share transfer is intended to assume the target entity`s historical tax debt for previous periods within the limitation period in Korea, it is customary for the buyer to receive appropriate compensation from the seller. Under Korean law, there is no blanket ban for target companies that financially support acquirers. However, such financial assistance to acquirers may result in a breach of the fiduciary duties of the directors of the target corporation. In this context, the directors of the target company must be aware of their obligations vis-à-vis the offeree company, since the granting of financial assistance to a purchaser may be considered as prejudice to the target company, depending on the nature of the aid, while the majority shareholders of the offeree company or the acquirer benefit from it. The consideration is usually in cash. The purchase price per share should not be the same for the sale of shareholders and may be different as long as there are legitimate reasons (e.g. Β control premium). In addition, foreign and domestic investors are subject to verification of the ability of the Financial Supervisory Authority to invest in Korean financial enterprises (e.g. B banks, insurance companies, securities companies) which exceed a certain ownership threshold. With regard to debt and equity financing, what are the typical provisions in contracts for the purchase of going-private transactions? What other documents typically define the terms of funding? Articles 360 to 24 of the KCC confer on the controlling shareholder of the company a legal right that allows the controlling shareholder to compel minority shareholders to accept cash payments for their shares (the “squeeze-out right”).
For the purposes of the squeeze-out right, the controlling shareholder is defined as the shareholder holding, on his own account, 95% or more of the total outstanding shares of a company. The controlling shareholder`s participation takes into account (i) for a capital shareholder the shares held by its parent company and/or subsidiary and (ii) for a shareholder who is a natural person, the shares held by a company in which it holds more than 50% of the total issued and pending shares. In addition, the courts have decided that all the shares held by the company are part of the issued and outstanding shares, which are set off against the share held by the controlling shareholder. Under Korean tax law, a shareholder who acquires more than 50% of the shares of a Korean company is subject to the DAT. In this case, it is considered that the shareholder has indirectly acquired the assets of the company (such as land, buildings, railway vehicles, etc.) and is therefore responsible for all taxes on wealth acquisitions that may generally apply to the acquisition of the relevant asset types. What legal title does a buyer acquire on the shares of a company, business or asset? Is this legal title imposed by law or can the level of security be negotiated by a buyer? Is legal title automatically transferred to the shares of a corporation, business or asset? Is there a difference between the legal title and the advantageous title? There are no general requirements under Korean law that set a specific minimum price for the shares of a target company.. . .