From 30/12/2020, parts of revised articles in “Business Mergers And Acquisitions Act” are passed and adopted by the department of executives in Taiwan. The revised parts are included to increase the transparency of information for business mergers, to grant the power of purchase for shareholders who vote against merger, to loosen the asymmetric merger, to specify the item of intangible assets and to provide the shareholder in the identity of natural person of startup company with the preferential rate of taxation on dividends. The revised articles aim to reinforce the power and rights of shareholders as well as smooth the merger of enterprises.
The revised articles this time from the statement by MOEA are engaged in reinforcing the power and rights of shareholders and are stipulated that the pros and cons of merger and reasons of approval and denial shall be stated clearly in the minute of shareholder. Moreover, the applicable range of rights of purchase is broadened, which is applied to shareholders who voted against the merger but did not give up the voting rights at the shareholder meeting either, to protect them to withdraw without a hitch.
In addition, the applicable term of asymmetric merger is loosened (which is called leverage usually). As the current Business Mergers And Acquisitions Act stipulated, the asymmetric merger shall be complied with the terms that “The paid number of merged company shall not exceed 20% of issued shares” and “The paid cashes or other asset shall not exceed 2% of issued shares in net value.”, so that the resolution of shareholders can be excluded. For the revised articles, “The paid number of merged company shall not exceed 20% of issued shares” or “The paid cashes or other asset shall not exceed 20% of issued shares in net value.”, which act of merge can be made by the resolution of director without the approval of shareholder if one of the abovementioned revised term is met. This revision is helpful to accelerate the progress of merger and promote the competitiveness of industries.
The two items of incentives are added in the revision this time: First of all, to improve the taxation condition for shareholders of startup company, the taxation of income from the dividends for shareholder of merged company can be proceeded later. Secondly, the category of intangible assets is specified, which is broadened to the privacy of business operation, software, integrated circuit layout these kinds of special rights and the purchased intangible assets can be shared with the basis in decade after merging so as to compute the expenses of taxation for merger more conveniently.
The purpose of this revision is to improve the efficiency of merger of enterprises as well as protect the rights of shareholders simultaneously.
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In Taiwan, companies can be categorized into three types: limited company, limited company by shares and foreign branch office. According to Taiwan’s Company Act, when establishing a company, the founders (shareholders) must hold a meeting to determine the company’s capital amount.
A Taiwan limited company by shares is required to appoint at least one supervisor to oversee and conduct audits of the company’s operations. The primary purpose of supervisor role is to serve as a check against the board of directors, ensuring that the rights of general shareholders are not infringed upon and that directors do not abuse their powers for personal gain.
No matter foreigners or Taiwanese to be the responsible person of Taiwan company, the tax regulations will be varied as different as the country of tax residents.Residency and holding the household registration in Taiwan within 1 to 31 days (with Taiwan labour insurance, health insurance, national pension, or spouse and children in Taiwan).
To comply with the Anti-money laundering policies, Taiwan companies shall declare the shareholding information which shareholders holding the shares more than 10% on the shareholder declaration platform affiliated with TDCC (Taiwan Depository & Clearing Corporation) on March 1st to 31st annually.
