Company Law to be revised; nonprofit organization may be promoter investing in the form of intellectual patent right or self-developed technology to facilitate technology transfer

    The Executive Yuan on April 14 wrapped up reviewing an important revision of Article 128 of the Company Law.  It is agreed that a nonprofit organization can be a promoter, but it can only invest in the form of such intellectual property as patent technology or self-developed technology.  It is expected that in the future many companies will seek Academia Sinica or Industrial Technology Research Institute to set up joint ventures.  Nonprofit organizations for economic affairs may legally be the promoter of a company limited by shares and invest in commercial activities to facilitate technology transfer.  Such revision is meant to comply with the enactment of the Nonprofit Organization Statute and represents a major revision in the “Invest in Taiwan First” project. 

    According to the draft Nonprofit Organization Statute proposed by the Ministry of Justice, a nonprofit organization must be approved for its establishment, and the Statute also provides for regulations on a nonprofit organization’s investment.  The amount of investment cannot exceed half of the registered assets.  However, such restriction does not apply where the investment is in the form of such intellectual property as patent rights or self-developed technology.  The said Statute, which is closely related to Article 128 of the Company Law, is aimed to encourage the smooth commercialization of developed technologies by lifting the restriction that a nonprofit organization for economic affairs cannot be a promoter.