1. TRANSFER OF BUSINESS

2. Article 41 (Prohibition against Competition by Transferor of Business)  prohibition of competitive business (1) When a person has transferred his/her business, he/she shall not, for a period of ten years, engage in the same kind of business in the same Special Metropolitan City, Metropolitan City, or Si/Gun, or in any adjacent Special Metropolitan City, Metropolitan City, or Si/Gun, unless the relevant parties have agreed otherwise. (2) Where a transferor has made an agreement not to engage in the same kind of business, such agreement shall be valid, only in the same Special Metropolitan City, Metropolitan City, Si/Gun and in any adjacent Special Metropolitan City, Metropolitan City, Si/Gun, and only for a period not exceeding 20 years.

3. Article 42 (Liability of Business Transferee who Continues to Use Trade Name) (1) If a transferee of a business continues to use the trade name of the transferor, he/she shall also be liable for repayment of the obligations of a third party arising out of the business of the transferor. (2) The provisions of the preceding paragraph shall not apply in cases where the transferee, without delay after the transfer of the business, registers that he/she shall not be liable for the obligations of the transferor. The same shall apply to a third party to whom both the transferor and the transferee have, without delay after the transfer of the business, given notice to the above effect and who has received such notice.

4. Article 43 (Repayment to Business Transferee) In cases falling under paragraph (1) of the preceding Article, repayment to the transferee of claims arising out of the business of the transferor shall be valid only when the obligor effecting the performance has acted in good faith and without gross negligence.

5. Article 44 (Liability of Business Transferee who has Made Advertisement of Obligation Acceptance) If, in cases where the transferee does not continue to use the transferor's trade name, he/she has made an advertisement to the effect that he/she will assume the obligations arising out of the business of the transferor, the transferee shall also be liable to repay such obligations

6. Article 45 (Duration of Liability of Business Transferor) If the transferee is liable for the obligations of the transferor in accordance with Article 42 (1) or the preceding Article, the liability of the transferor in respect of a third party shall be extinguished two years after the transfer of the business or the advertisement.

7. Transfer of “business” Business 1) subjective meaning : business activities of a merchant 2) objective meaning: the whole business assets which are combined systemically and functionally for certain commercial purposes  object of transfer of “business”

8. The whole business assets : A. tangible assets : 1. positive assets(properties) : Realty, equipment, bonds, ip. etc. 2. negative assets(debts) B. facts of commercial value good will, trade secrets, (intangible assets)

9. Intangible assets : An intangible asset that arises as a result of the acquisition of one company by another for a premium value. The value of a company’s brand name, solid customer base, good customer relations, good employee relations and any proprietary technology represent goodwill. Goodwill is considered an intangible asset because it is not a physical asset like buildings or equipment. The goodwill account can be found in the assets portion of a company's balance sheet.

10. Character of “Transfer of business” In Indonesia ? A. transfer of business “property” B. replace the status of “merchant” C. compromise opinion : transfer of a set of business maintaining the identity -> supreme court -

11. The supreme court 2005.7.22. 2005da602 in the commercial act art.42-1, ‘business means functional property as the systemic organic whole for certain commercial purposes, ’the functional properties as the organic whole’ means a set of objects of trade which combined tangible and intangible properties with the economic worth-facts as a source of profits. Whether transfer of business or not, is that transferee receives the functional properties as a source of benefits, then keeps doing the business in the same way which the transferor did before.

12. The standards of 'the same kind of business‘ in the prohibition of competitive business it is the “finding of facts” decided by “common sense” of the general community. the transfer of business is decided not by how much business properties were transferred, but by whether the former organization of business is maintained and functions as a whole or important part. if a transferee receives the whole business properties but disbands the former organization of the business, it is not the transfer of business.

13. While even though the transferee receives facilities of business putting off certain portion of properties, but keeping the former organization of business from a view of the common sense of the community, it could be considered as a transfer of business. the Supreme court 2001.7.27. 99du2680 -> the supreme court cannot suggest concrete standards of "the same kind of business”

14. types of transfer of business generally, take-over the company means 1) transferee takes over the company, the subject of business, transferor,--> business itself 2) transferee receives shares or stocks from the owners, then transferee becomes a executive of the company. in this case, the transferor is the owner of the shares or stocks(the supreme court 1995.8.25.95da20904)

15. **simply changing the business owner, the labour relationship between he/she and laborer is packaged transferred to the business owner.

16. * estimating factors of transfer of business the cases have suggested following facts as factors of transfer of business A. whether there is a implied or explicit contract on a transfer of business between parties B. the purposes of the transfer of business( the sameness to the purposes of transferor)

17. * “sameness of products” in competition -production and sales facilities, succession of properties and the extent -land, buildings, facilities, mechanical devices, etc. -patent, utility models, designs, licensing, business rights etc.

18. * extent of succession of labour relationships -the size of transferor’s workers -substantive process of entering and resigning the company -maintaining the condition of labour in the transferor(dissolve the human organization) -continuing transaction with transferor’s trade accounts(partners)

19. - history of backgrounds of contract, succession of claim and obligation, using the transferor’s trade names.

20. *labour relationships transfer of business includes the comprehensive succession of laborers(the supreme court), if not, just simple sales of physical assets if just transaction of properties-> no

21. *extent of labour relationships -laborers on the date of contract of transfer of business. -but before the date of transfer of business, the worker was dismissed, he cannot claim the unfairness dismissal against the transferee special agreement in limitation of laborer succession --> the agreement should be justified under the Labor Standards Act if the workers oppose the transfer of business -> remain at the transferor or resign at the transferee labour union-> transfer and maintain

22. * the effect of the special agreement that excludes some of laborers from the succession. if the parties make the special agreement to exclude some part of laborers from the transfer of business, it is effective. However, it is no better than a dismissal, so the supreme court permits only when it is valid under the Labor Standard Act which provides valid reasons of discharge. Firing of laborers only because of the transfer of business dose not represent the valid reason, So the agreement is invalid.(the supreme court 1994.6.28. decision 93da33173)

23. Trade Name Article 18 (Free Choice of Trade Name) A merchant may use his/her full name or any other variation as his/her trade name. **limitation on naming the business -Article 19 (Trade Name of Company) The lettering "partnership company", "limited partnership company", "limited liability company", "stock company" or "limited company" shall be contained in the trade name of a company according to its nature.

24. -Article 20 (Ban on Illegal Use of Trade Name of Company) No person, other than a company, may use in the trade name any lettering indicating a company. This shall apply in cases where the business of a company has been acquired by transfer. -Article 21 (Unitary Trade Name) (1)A single trade name shall be used in the same business. (2)The trade name of a branch office shall expressly show its dependent relationship to the principal office.

25. Article 22 (Legal Effects of Registration of Trade Name) No trade name registered by another person shall be registered as a trade name of the same kind of business in the same Special Metropolitan City, Metropolitan City, or Si/Gun.

26. - Article 23 (Prohibition against Use of Trade Names Causing Misconception on Ownership of Business) (1)No person shall, for any unfair purpose, use any trade name likely to induce others to believe that it represents the business of another person. (2)In cases where a person has used a trade name in contravention of the provisions of paragraph (1), any person whose interest is likely to be harmed thereby or any person who has registered the trade name may demand cessation of such use.

27. (3) The provisions of paragraph (2) shall not prejudice any claim for damages. (4)Any person who uses the registered trade name of another person in the same Special Metropolitan City, Metropolitan City, and Si/Gun, in respect of the same line of business shall be presumed to have done so for an unfair purpose

28. Article 24 (Liability of Persons who have Lent their Names) Any person who has permitted another person to carry on business using his/her name or trade name shall be liable jointly and severally with such borrowing person in respect of any obligations arising from a transaction in favor of a third party who has effected such transaction in the belief that such borrowing person is the business owner.

29. Article 25 (Transfer of Trade Name) (1) A trade name may be transferred only in cases where business is discontinued or it is transferred together with the business. (2)No transfer of a trade name shall be asserted against a third party unless it has been registered.

30. Article 26 (Legal Effects of Failure to Use Trade Name) If a person who has registered a trade name has failed to use it for two years without any justifiable reason, the trade name shall be regarded as nullified.

31. Article 27 (Requests for Cancellation of Registration of Trade Name) If a trade name has been altered or discontinued, and a person who has registered such trade name has failed to register such alteration or discontinuation within two weeks, any interested person may request for the cancellation of such registration.

32. Trade name : the name of business which a merchant uses in the commercial activities Principle of free to choice of trade name Limitations

33. Registration of trade name -Individual merchant does not have the obligation of registration of trade name -Company should register trade name. (registration of incorporation)

34. Legal effects 1) art. 22 (Legal Effects of Registration of Trade Name) No trade name registered by another person shall be registered as a trade name of the same kind of business in the same Special Metropolitan City, Metropolitan City, or Si/Gun. 2) art.23-4 4)Any person who uses the registered trade name of another person in the same Special Metropolitan City, Metropolitan City, and Si/Gun, in respect of the same line of business shall be presumed to have done so for an unfair purpose.

35. 3) Art. 26 (Legal Effects of Failure to Use Trade Name) If a person who has registered a trade name has failed to use it for two years without any justifiable reason, the trade name shall be regarded as nullified. 4) Art. 27 (Requests for Cancellation of Registration of Trade Name) If a trade name has been altered or discontinued, and a person who has registered such trade name has failed to register such alteration or discontinuation within two weeks, any interested person may request for the cancellation of such registration.

36. Right of trade name 1. right to use trade name Merchant can use trade name in all his business dealing. Including use in advertisement, products, papers, etc. without distinction of registration

37. 2. the sole right to use trade name The right to abandon the use and claim damages to the person who uses, for unfair purposes, any trade name likely to induce others to believe that it represents the business of another person. Any Unfair purpose The intention that he/she use any trade name likely to induce others to believe that it represents the business of another person.

38. The intention to take advantage of good will, economic value, etc. of the original trade name. overall judgment of the reputation, good will, size of business, etc.

39. Trade Names Causing Misconception on Ownership of Business : 허바허바사장 - new-seoul 허바허바사장 보령주식회사 – 수원보령주식회사 주식회사 천일약방 – 천일한약주식회사

40. Liability of Persons who have Lent their Names Any person who has permitted another person to carry on business using his/her name or trade name shall be liable jointly and severally with such borrowing person in respect of any obligations arising from a transaction in favor of a third party who has effected such transaction in the belief that such borrowing person is the business owner.