I would like to ask a corporate finance attorney a few questions about fundraising.

Hello. A corporate finance attorney will provide an answer.

There are several methods for a company to raise funds, and the legal procedures and points requiring caution differ depending on each method.

First, raising funds through a capital increase (issuance of new shares) requires a resolution of the board of directors (based on an unlisted stock company) under the Commercial Act and the company's articles of incorporation.

Depending on the method of issuing new shares (a rights issue, a third-party allotment, an allotment to shareholders, and the like), disclosure, payment, and registration procedures are required.

In particular, in the case of a third-party allotment, a fair procedure and purpose must be recognized under the Financial Investment Services and Capital Markets Act, and it must also be examined whether the preemptive rights of existing shareholders are infringed.

When issuing corporate bonds, the total amount of the bonds, the interest rate, the maturity, whether collateral is provided, and the conclusion of a trust agreement are the main considerations. In the case of public offering bonds, a securities registration statement must be submitted to the Financial Supervisory Service, and even in the case of privately placed bonds, caution is required because, if certain requirements are not met, they may be deemed an illegal public offering.

An investment agreement concluded when attracting investors such as venture capital should include ▲the equity ratio and investment amount, ▲redemption and conversion conditions, ▲preferred share conditions, ▲whether voting rights are restricted, ▲protective provisions (for example, preemptive purchase rights, tag-along rights, and conditions upon listing), and ▲matters of shareholders' agreements (ROFR, Tag-along, Drag-along, and the like).

To prevent future disputes, we recommend that you proceed systematically with the assistance of a corporate finance attorney.