We advised startups seeking investment from investors on SAFE investment contracts (Conditional Equity Acquisition of Shares). In the case of Korea, there were many disagreements regarding the legality of the SAFE contract because there was no provision for the basis of the SAFE contract in commercial law. However, as the ‘Venture Investment Promotion Act (Venture Investment Act)’ came into effect in August last year, it was finally possible to conclude a SAFE contract without any disagreement on the legality, and our firm provided advice for startups to legally sign a SAFE investment contract in accordance with the Venture Investment Act. Although the Commercial Act or Venture Investment Act does not explicitly require a resolution of the board of directors or a resolution of the general meeting of shareholders when receiving SAFE investment, in practice, the resolution of the general meeting of shareholders is needed in consideration of the fact that the consent of all shareholders is needed under the Venture Investment Act. In addition to this, the resolution of the Board of Directors is also needed, just like when an investment contract is concluded through the acquisition of new shares, thereby completely blocking any legal disputes that may arise in the future.
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