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2022.12.15 Ministry of Economic Affairs, R.O.C.
On June 15, 2022, the President announced the revised version of the Business Mergers and Acquisitions Act, which came into effect on December 15, 2022, in accordance with Article 54 of the Business Mergers and Acquisitions Act.
According to the Ministry of Economic Affairs, the main focus of this revision includes (1) protecting shareholder rights, (2) expanding the scope of asymmetric mergers and acquisitions, and (3) expanding flexible taxation measures.
The part about bolstering the protection of shareholder rights stipulates that a company must, in the notice of shareholder meeting, state the directors’ personal interests and reasons for supporting or opposing the merger and acquisition. The amendment also expands the scope of shareholders whom oppose the merger and acquisition and whom are allowed to ask for a buyout of their shares.
Originally, only shareholders who had abstained from voting possessed the right to request a buyout; after the implementation of the new act, shareholders who do not abstain from voting and vote against the merger and acquisition in the shareholder meeting may also ask the company to buy back their shares at a reasonable price, so as to protect the rights of shareholders whom oppose the merger and acquisition.
The new act also expands the scope of asymmetric mergers and acquisitions. As long as "the shares paid by the merging company does not exceed 20% of its shares outstanding," or "the total consideration of shares, cash and other assets paid by the merging company does not exceed 20% of the company’s net worth," mergers and acquisitions can be carried out after the resolution of the board of directors meeting without needing to go through a shareholder meeting, so as to expedite and simplify the merger and acquisition process.
According to the Ministry of Economic Affairs, another highlight of this amendment is it clarifies that tax payment for the consideration of the shares acquired by individual shareholders of acquired startup enterprises can be deferred in full.
At the same time, it clearly specifies the categories that identifiable intangible assets fall under and relaxes the calculation standard for amortizing intangible assets generated by mergers and acquisitions to the statutory enjoyment period or 10 years, making it easier for the merger and acquisition party to estimate its tax costs.
The Ministry of Economic Affairs stated that this revision will improve mergers and acquisitions while keeping shareholder rights in mind.
News spokesperson: Liu Ya-Juan, Deputy Director General, Department of Commerce, MOEA
Office phone: 2321-2200 Ext. 8325, Mobile phone: 0933-989-616
e-mail: ycliu@moea.gov.tw
News Contact: Hung Yu-Ren, Section Chief, Department of Commerce, MOEA
Office phone: 2321-2200 Ext. 8397, Mobile phone: 0911-250-237
e-mail: yjhung@moea.gov.tw
Note: This news article was originally written in Chinese. An English translation of the Chinese version is provided herein. If there are any conflicts or discrepancies between the translation and the Chinese version, the Chinese version shall prevail.
