On Tuesday the 23rd, the Korea Venture Business Association (Chairman Song Byeong-jun) held a ‘Venture Business System Briefing Session’ together with the Ministry of SMEs and Startups at the Startup Conference Room of the Korea Venture Investment Building.
At the briefing session, practical applications of the stock-linked compensation system, 'stock options', 'performance-contingent stock', and 'multiple voting stock', which grants founders up to 10 voting rights per share, were explained, and a Q&A session was held.
This briefing session was attended by approximately 150 people, including venture company executives, investors, and experts, showing great interest.
Attorney Hee-chul Ahn of DLG Law Firm discussed the key aspects of stock options and performance-linked stocks, which are a means of attracting and rewarding talent for venture companies, as well as their legal issues and tax and accounting issues, and shared actual corporate use cases.
Next, attorney Lee Dong-myeong of Choi & Lee Law Firm explained the requirements, procedures, and restrictions under the Venture Business Act, focusing on actual cases of the multiple voting stock system being used.
A venture company official who attended the event said, “In order to create an effective venture company system that actually helps venture companies, continuous improvement of the system, such as easing requirements and tax exemptions, is necessary.”
Meanwhile, performance-linked stocks are stock-linked compensation that grant employees free treasury stocks. They can be linked to factors such as length of service and performance, which can help attract talented individuals and encourage long-term employment.
Last year, the Special Act on the Promotion of Venture Businesses was revised, allowing venture businesses without secured distributable profits to utilize performance-related stocks.
In addition, the multiple voting stock system implemented in 2023 is a system that grants founders up to 10 voting rights per share when an unlisted venture company's voting rights ratio falls below 30% due to investment attraction. Starting this year, a tax exemption has been introduced to allow for the deferral of capital gains tax until the multiple voting stocks are converted into common stocks when acquiring multiple voting stocks through in-kind contribution.
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