Newsletter
TRANSNATIONAL ACQUISITIONS AND COMPANY REGISTRATION
When an acquisition is conducted between an ROC company and a foreign company in the form of a general assumption or general transfer of business or assets, if there are matters that the foreign company needs to register under the legislation of its home country, it should register them with the authorities of that country. It does not need to apply with the ROC company regis-tration authorities for authorization or registra-tion.
If the acquisition results in a change in the capital of the ROC company, so that it needs to register an increase in capital or the issuance of new shares, it should apply to amend its registration, submitting the relevant documents as required by Article 16 of the Regulations Governing Com-pany Registration and Recognition. If the ac-quisition requires a resolution of the foreign company, made by its shareholder meeting, board of directors meeting or by other lawful means, as referred to in Articles 21 and 27 of the CMAL, the documents evidencing the resolution should be submitted, with Chinese translations. If the registration details to be amended involve investment by overseas Chinese or foreign na-tionals requiring authorization by the IC, then the authorization documents issued by the IC should also be submitted for verification.
When a foreign company makes a general as-sumption of the business or assets of an ROC company, and the business or assets so assumed become assets of the Taiwan branch of the for-eign company, how the share capital, retained earnings, and capital reserve of the ROC com-pany are to be transferred to the foreign company or its Taiwan branch office, are matters for cor-porate self-governance. As to the question of whether the ROC company may distribute shares it acquires in the foreign company to its share-holders as distributed earnings, the answer is negative, since a transfer of business is a long-term investment or a disposal of business, and as such is unrelated to distribution of earn-ings.
Where an ROC company makes a general as-sumption of the business of the Taiwan branch office of a foreign company, the branch office may not be directly renamed as a branch of the ROC company. The ROC company should separately establish a new branch office to carry on the acquired business.