When a school legal person merges with another school legal person or a private school merges with another private school, the school legal persons shall draw up a merger plan and contract, and submit them to the legal person authority along with CPA-certified balance sheets and asset lists for approval. The legal person authority shall consult the consultative committee before deciding to approve the merger.
The school legal person that remains or the new school legal person established after the merger shall inherit the rights and obligations of the school legal person(s) that cease to exist. The school that remains or the new school established after the merger shall inherit the rights and obligations of the school(s) that cease to exist.
Within 15 days after receiving approval, the school legal person shall prepare and publish the consolidated financial statements and asset lists, and separately notify known creditors of the merger. Creditors object to the merger shall raise their written objection in two months. Creditors fail to do so shall be considered to have accepted the merger.
The school legal person shall do the following to respond to creditors raising objection:
1. Pay off liabilities that are due.
2. Provide adequate assurance for liabilities not yet due.
School legal persons failing to notify creditors of said mergers, pay off liabilities due, or provide adequate assurance shall not exercise their right of claim against the creditors when they seek to enforce their rights.

For mergers approved by the legal person authority, applications shall be made to update the registered information. When applying for registration of transfer of immovable property, movable property and secured claims as a result of the merger, the processing fee, stamp duty and deed tax may be waived by presenting a letter from the legal person authority approving the merger.
Marketable securities transferred as a result of the merger are exempt from the securities transaction tax. Goods and services transferred are not subject to business tax.
Land value increment tax payable as a result of the transfer shall be recorded, and paid when the school legal person that inherits the lands transfers them. When the school legal person that inherits the lands dissolves, priority shall be given to the recorded land value increment tax when it repays its debts.

When a private school plans to convert to a different type of school, it shall prepare a conversion plan and submit it to the school authority for approval. The school authority shall consult the consultative committee before deciding to approve the conversion.

If a school is found to be confronted with one of the following problems, the school legal person shall inform the school authority and shut down the school after being granted approval.
1. Insurmountable hurdles have been encountered which prevent the school from achieving its objective or continuing operating.
2. Improvements have not been made by the date set by the school authority.
If the school legal person fails to inform the school authority of the problem(s) with which the school is confronted, the school authority may order its shutdown after consulting the consultative committee.

If a school legal person is unable to achieve the objective as indicated in the Rules and has shut down its schools according to the preceding article, it may apply to the legal person authority for a change of objective after obtaining approval from its board.
The legal person authority shall consider carefully the donator’s real intention and allow the change after obtaining approval from the relevant supervisory authority and consulting the consultative committee, and request to the court with jurisdiction to process registration of the change.
In the event that the school legal person has shut down its schools and finished the registration of the change, the land value increment tax, transferred from the school legal person as described in Land Tax Act Article 28-1, is exempted from the due retroactively and a fine. Land value increment tax payable as a result of the transfer shall be recorded, and paid when the changed legal person dissolves. However, if the rules governing the changed legal person stipulate that upon dissolution, the remaining property of the entity will be transferred to the local government, then the land value increment tax shall be exempted.
When the changed legal person that inherits the lands dissolves, priority shall be given to the recorded land value increment tax when it repays its debts.

If one of the following exists, a school legal person may inform the legal person authority and dissolve after being granted approval:
1. Its school(s) has shut down in accordance with Article 70, and has been unable to reopen or make improvements after the specified period of time.
2. The school legal person meets the criteria set forth in the Rules for dissolution.
3. The school legal person has donated all its property to the government or other school legal persons.
4. The school legal person has merged with another school legal person and needs to dissolve.
The legal person authority may order school legal persons meeting one of the following criteria to dissolve after consulting the consultative committee:
1. School legal persons in a condition as indicated in Point 1 of the preceding paragraph fail to inform the legal person authority for approval to dissolve.
2. School legal persons shutting down their schools or stopping enrolling students without being granted approval.
3. School legal persons failing to obey the school authority’s order and shut down their schools as stipulated in the paragraph 2 of Article 70.
Priority shall be given to the wages and severance pay the school legal persons owe before they begin dissolving or liquidating.

Unless a school legal person has gone bankrupt, all the board members are the liquidators after it dissolves. The liquidators shall apply to the court with jurisdiction for dissolution of the legal person within 15 days after the legal person authority’s dissolution notice arrives. If all or some of the liquidators are unwilling or unable to take office, the court may appoint persons of its choice as the liquidators on the legal person authority, prosecutor or interested parties’ request.
When necessary, the court may remove all or some of the above liquidators.
The court may consult the legal person authority when appointing or removing the liquidators. The legal person authority may take the initiative to contact the court and express its opinion.
The liquidators shall notify the court of the date they took office within 30 days after taking office.

Unless a school legal person is merged, the property remaining after it dissolves and liquidates shall be handled in the following order. The property remaining shall by no means be handed over to natural persons or for-profit organizations.
1. Handled in accordance with the Rules.
2. Donated to public schools or juridical persons engaged in educational, cultural or social welfare undertakings per the board’s resolution and the legal person authority’s approval.
3. Handed over the city/county in which the school legal person is located. However, the immovable property belongs to the city/county in which it is located.
The city/county government shall use the property for educational, cultural and social welfare purposes only.

The liquidators shall prepare financial statements for the liquidation and submit them along with relevant records to the supervisors for review and the board for approval within 15 days after it is over.
The financial statements and records shall be forwarded to the court within 15 days after the board’s approval.

When a private school shuts down or a school legal person dissolves, the students shall be issued a transfer certificate and transferred to other schools. If necessary, the school authority may assign them to other schools.
The above applies to students unwilling to study at the remaining or newly established school after their school is converted or merged.