On July 8, 2021, Hwaum Law Office was engaged by Company B, which had raised a Series A investment, to review its Articles of Incorporation, investment agreement, and corporate registrations concerning redeemable convertible preferred shares (RCPS), stock options, and related matters. Hwaum successfully completed the engagement.
The issuance of class shares such as redeemable convertible preferred shares (RCPS) and the grant of stock options are matters closely affecting shareholder interests. To ensure that such transactions are not rendered invalid due to infringement of shareholder rights, the company must comply with the applicable statutory requirements and procedures.
Drawing on Hwaum Law Office’s extensive experience advising on investment agreements, paid-in capital increases, and stock options, we carefully identified and addressed Company B’s specific concerns and provided comprehensive legal advice regarding the issuance of new shares, including the terms and conditions of the RCPS and the grant of stock options.
* Redeemable Convertible Preferred Shares (RCPS) combine three types of preferred shares: redeemable shares, which are subject to redemption by the company under specified conditions; convertible shares, which may be converted into another class of shares; and preferred shares, which carry preferential rights to dividends or distributions of residual assets. In practice, RCPS are commonly issued to investors to provide them with rights relating to the redemption of their investment, conversion into common shares, and preferential dividends.
Author: Attorney Soon-kyo Kwon