C ONCLUSION

A long time before the Business Mergers and Acquisitions Law was passed the expression “the transfer of all or a substantial part of the business or assets” already existed in Article 185 of the Company Law. However, previously the focal point of the discussion was mainly on the so-called

“principal business or assets.” In the opinions delivered by the court the emphasis constantly changed, from the strict criteria “leading to the business engaged in by the company being unable to be accomplished,” to the not very meaningful “inventory of essential property” standard, to the adoption of the “qualitative and quantitative merger observation” criteria advocated by scholars. From the time that the Business Mergers and Acquisitions Law referred to the regulation of a 50% share of business income or assets, there are also further changes. However, the “transfer of all or a substantial part of the business or assets” constitutes the fundamental change in the company’s organization, a change that did not take place in the ordinary course of business, and hence created the need for a resolution to be passed in a general meeting.

However, as to whether these types of changes should without exception give the dissenting shareholders appraisal rights is not without doubt. Before the Business Mergers and Acquisitions Law was promulgated, there was hardly any discussion on the consideration involved in “the transfer of all or a substantial part of the business or assets.” Nevertheless, the Business Mergers and Acquisitions Law clearly stipulates that shares are one of the items that could be chosen, and that under certain conditions tax incentives would be given. Furthermore, there is even more need to examine the meaning of various types of consideration to the shareholders of the acquired company and the difference between this and other kinds of merger and acquisition behavior. Clearly, if the consideration is cash and the company is

dissolved subsequently, there is actually no need for there to be any appraisal rights.

There is a further point of contention regarding “the transfer of all or a substantial part of the business or assets” that concerns its validity. Based on the general meeting resolution as a statutory procedure, it has all along been insufficiently clear how any such transfer behavior that violates this procedure should be dealt with in terms of validity. This also involves the division of powers between the general meeting and the board of directors, and goes further to affect the counterparty’s interest. It is advocated by most court opinions that the validity of the transaction and its underlying defective resolution should be determined separately. Such opinions deserve further criticism. As to the way in which the resolution is violated, its validity should be judged in accordance with different regulatory objectives.

Finally, “the transfer of all or a substantial part of the business or assets”

is an issue that involves the powers accorded to the general meeting, and so other merger and acquisition behavior should also be determined in this way.

That is, this type of merger and acquisition behavior does not of course give rise to the issue of the apparent agency. The law in Taiwan in relation to the basic concept of the so-called division of powers is uncertain. Accordingly, shareholders’ proposal rights should be adjusted in line with the confirmation of the division of powers between different organs. This will in turn enhance the safety of transactions.

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