TAIWAN Law and Practice Contributed by: Eddie Chan, Derrick Yang, Winnie Lin and Yuan-Yuan Lo, Lee and Li Attorneys-at-Law
potential bidders that is not publicly accessible and cannot be disclosed before the execution of the transaction, in order to avoid any potential obstacles to executing the transaction. 9.2 Data Privacy The Personal Data Protection Act (PDPA) is the main statute governing personal data protection in Taiwan. The PDPA applies to all data collection and processing activities in Taiwan, regardless of the nationality of the data subjects. Gener- ally, international data transfers are permitted under the PDPA, unless prohibited or restricted by the regulators. Consent from data subjects is required for the collection, processing, and use of their personal information, with some excep- tions or additional restrictions based on circum- stances. Due to these restrictions, when provid- ing due diligence documents, a target company, such as a technology company, would remove personally identifiable information. This means that the acquirer will only learn the identity of the target company’s employees, independent contractors, or individual co-operating partners near or at the completion of the transaction. A public company is required to disclose any material contracts, letters of intent and memo- randums that it executed. Additionally, any reso- lutions adopted by the board of directors of a public company that have a significant impact on the share price or the investment decision of the investors are required to be disclosed. In practice, on the date of a board meeting approv- ing a merger or an acquisition or on the date of executing a binding legal document between the public company and the other party to the merger or acquisition, an announcement must 10. Disclosure 10.1 Making a Bid Public
be made on the Market Observation Post Sys- tem. 10.2 Prospectus Requirements In a tender offer where the consideration is in the form of shares, such shares must be (i) domestic securities traded on the Taiwan Stock Exchange or the Taipei Exchange or (ii) foreign securities prescribed by the FSC. A prospectus is required for the issuance of new shares of the offeror in a tender offer. 10.3 Producing Financial Statements A public company is required to obtain the bid- ders’ financial statements so as to determine the fair price of a transaction in the case of a stock- for-stock transaction, while whether or not the financial statements should be prepared based on GAAP or IFRS is not specially required. 10.4 Disclosure of Transaction Documents The parties are required to file copies of the transaction documents for certain governmental reviews, including applications for the merger, investment approval, tender offer, corporate reg- istration, etc. Directors must fulfil their fiduciary duties, which include the duty of loyalty and the duty of care in a business combination. They must act in the company’s best interests and make decisions on whether to approve a deal on an informed basis. Directors have a duty to indemnify the company for any loss arising from a breach of these fiduci- ary duties. The board of directors must fulfil their duty of care by complying with pertinent laws, the company’s articles of incorporation, and 11. Duties of Directors 11.1 Principal Directors’ Duties
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