Section 11.Dissolution, Consolidation or Merger and Split-up |
| Article 315 | A company limited by shares shall be dissolved under any of the following circumstances:
- Upon occurrence of the cause of dissolution as specified in the Articles of Incorporation;
- Upon achievement or non-achievement of the objective of the business undertaken by the company;
- Upon adoption of a resolution to dissolve the company at a meeting of shareholders;
- Where the number of shareholders of registered share certificates is less than two persons; except that the only one shareholder is a government agency or a juristic person;
- Upon consolidation or merger with another company;
- Upon split-up of the company;
- Upon bankruptcy of the company; and
- Upon rendition of a dissolution order or judgment.
Under the circumstance specified in Item 1 of the preceding paragraph, the company may continue its business operations after amendment or alteration of the Articles of Incorporation is approved by a meeting of shareholders; and under the circumstance set forth in Item 4, the company may continue its business operations by increasing the number of shareholders of registered share certificates.
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| Article 316 | A resolution for dissolution, consolidation or merger, or split-up of a company shall be adopted by a majority vote at a meeting of shareholders attended by shareholders representing two-thirds or more of the total number of the outstanding shares of the company.
For a company that has its share certificates publicly issued, if the total number of shares represented by shareholders present at a shareholders’ meeting is not sufficient to meet the criteria specified in the preceding paragraph, the resolution may be adopted by two-thirds of the votes of the shareholders present at a shareholders’ meeting attended by shareholders representing a majority of the total number of the outstanding shares of the company.
Where a higher criteria for the total number of shares represented by the shareholders present at a meeting of shareholders and the total number of votes required to adopt a resolution thereat are specified in the Articles of Incorporation of the company, such higher criteria shall prevail.
When a company is to be dissolved for any cause other than bankruptcy, the board of directors shall forthwith notify each of the shareholders of the essentials of such dissolution plan.
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| Article 316-1 | In the case of merger/consolidation between two independent companies limited by shares or between a company limited by shares and a limited company, the surviving company or the newly incorporated company under the merger/consolidation project shall be limited to a company organized in the form of a company limited by shares.
In the case of split-up of a company limited by shares, the surviving company or the newly incorporated company shall be limited to a company organized in the form of a company limited by shares.
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| Article 316-2 | Where 90% or more of the outstanding shares of a subsidiary company is held by its controlling company, the controlling company may merge/consolidate with the said subsidiary company upon a resolution to be adopted separately at a meeting of the board of directors of both the controlling company and the subsidiary company by a majority vote of the directors present at the meeting of board of directors attended by directors representing two-thirds of the directors of the respective companies; and the resolutions of merger/consolidation so adopted shall be exempt from the application of the provisions set out in Paragraphs I through III, Article 216 of this Act governing the resolutions of Shareholders' meeting.
After adoption of the resolution by the board of directors of the subsidiary company under the preceding Paragraph, a notice shall be given to each of its shareholders and shall state therein that any shareholder who has an objection against that resolution may, within 30 days or a longer period, submit a written objection requesting the subsidiary company to redeem, at a fair price, the shares of the subsidiary company he holds.
Where the share redemption price is to be decided by an agreement to be reached through negotiation between the subsidiary company and its shareholders under the preceding Paragraph, the subsidiary company shall, within 90 days from the date of adoption of the resolution by the board of directors, effect the payment of the redemption price; whereas, if no agreement on the redemption price is adopted in the foregoing negotiation within 60 days from the date of adoption of the said resolution by the board of directors, the shareholders shall, within 30 days after such 60-day period, apply to the court for its decision on the redemption price by a court ruling.
The request of a shareholder for redemption of shares by the subsidiary company shall become mull and void, if the merger/consolidation resolution is cancelled by the subsidiary company. This clause shall also apply to the case where the shareholder fails to make the requests within the time limit set out in Paragraphs II and III under this Article.
The provisions of Article 317 governing redemption shares held by an objecting shareholder shall not apply the controlling company.
Where the Articles of Incorporation of the controlling company need to be amended after completion of the merger/consolidation project, the provisions of Article 277 hereof shall govern.
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| Article 317 | When a company is split up or to be consolidated or merged with another company, the Board of Directors shall draft a split-up plan or a contract of consolidation or merger in respect of the matters related to such company split-up plan or the consolidation or merger contract and shall submit the same to a meeting of shareholders. Any shareholder who has expressed his dissension, in writing or verbally with a record before or during the meeting, may waive his voting right and request the company to buy back, shares of the split and consolidated or merged company he holds at the prevailing fair price.
In case the another company referred to in the preceding Paragraph is a newly incorporated company, then the meeting of shareholders of the split company shall be regarded as the promoters meeting of the said another company, and election of the directors and supervisors of such new company may be conducted at that meeting.
The provisions of Article 187 and Article 188 of this Act shall apply, mutatis mutandis, to the circumstance specified in the preceding Paragraph.
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| Article 317-1 | The contract of consolidation or merger, as mentioned in Paragraph 1 of the preceding article, shall be made in writing setting forth the following particular:
- The name of the consolidated or merged company and, after the consolidation or merger, the name of the surviving company or the newly incorporated company;
- Total number of shares, kinds of shares and amounts of each kind issued by the surviving company or newly incorporated company as a result of the consolidation or merger;
- Where shares are to be issued to shareholders of the dissolved company by the surviving company or newly incorporated company as a result of consolidation or merger, the total number of new shares, kinds of shares and amount of each kind, method of distribution, together with other relevant matters;
- The relevant provision applicable if the amount of shares to be issued to shareholders of the dissolved company after consolidation or merger is less than the value of one share and payable in cash;
- The Articles of Incorporation of a surviving company must be modified or altered, or that of a newly incorporated company to be executed, in accordance with Article 129.
The aforesaid contract of consolidation or merger shall be sent to shareholders together with the notice to convene a meeting of shareholders for approval of the resolution to be adopted for consolidation or merger.
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| Article 317-2 | The company split-up plan according to Paragraph I, Article 317 shall be reduced to writing and contain the following particulars:
- The changes/alterations need to be made in the Articles of Incorporation of the existing company succeeding the business of the split company, or the full text of the Articles of Incorporation;
- The value of the business, the assets and the liabilities of the split company, and the share swap ratio and calculation basis;
- The total number, categories, and the number in each category of the new shares to be issued by the existing company succeeding the business of the split company or to be issued by the new company to be incorporated;
- The total number, categories, and the number of share in each category of the shares to be acquired by the split company or its shareholders;
- Where the fractional share to be distributed to the split company or its shareholder is to be paid in cash, the relevant provisions governing the process thereof;
- The rights and obligations of the split company to be succeeded by the existing company or by the new company to be incorporated, and the mattes in connection therewith;
- Where the capital stock of the split company is reduced, the matters in connection with such capital reduction;
- The matters which shall be settled in the cancellation of the shares of the split company; and
- Where the company split-up plan is to be carried out jointly by a company and another company, the resolutions of company split-up to be adopted by both companies shall contain the matters pertaining to such joint splitting arrangement.
The company split-up plan as required in the preceding Paragraph shall be disseminated to all shareholders along with the notice of meeting of shareholders which is convened for a resolution on the approval of the company split-up plan.
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| Article 317-3 | (Deleted)
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| Article 318 | After consolidation or merger of a company, the Board of Directors of the surviving company or promoters of the new company shall, after having completed the procedure of serving follow-up notice to creditors and, in case there are shares consolidated as a result of the consolidation or merger transaction, after such consolidation becomes effective or, in the case where shares are not suitable for consolidation, after such shares are disposed of, take the following appropriate procedures respectively as the case may be:
- The surviving company shall at once convene a meeting of the shareholders after consolidation or merger and report on matters of consolidation or merger and, in case of any necessity to modify or alter the Articles of Incorporation, shall also modify or alter the Articles of Incorporation;
- The newly incorporated company shall at once convene a meeting of promoters and draw up the Articles of Incorporation.
The provisions set out in the Articles of Incorporation drawn up under the preceding Paragraph shall not contravene any of the provisions set out in the contract of consolidation or merger.
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| Article 319 | The provisions of Article 73 to 75 shall apply, mutatis mutandis, to the merger/consolidation or split-up of a company limited by shares.
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| Article 319-1 | The surviving company or the new company to be incorporated and succeeding the business of the split company after the company split-up transaction shall, to the extent not exceeding the capital fund contributed by it in respect of the business succeeded by it, assume the joint and several responsibility of discharging the liabilities incurred by the split company prior to the split-up transaction. However, the creditors' right to claim for the performance of the joint and several responsibility of discharging the foregoing liabilities shall become extinguished, if not exercised by the creditors within two year from the date of reference day of the company split-up transaction.
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| Article 320 | (Deleted)
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| Article 321 | (Deleted)
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