Print Time:2022/01/29 04:36
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Chapter Law Content

Title: Foundations Act CH
Category: Ministry of Justice(法務部)
Chapter 1 General Principles
Article 1
This Act is enacted to foster sound organization and operation of foundations, encourage active participation of foundations in public-benefit affairs and increase the public welfare.
The establishment, organization, operation and supervision of foundations shall be governed by this Act unless the law other than the Civil Code provides otherwise; the Civil Code shall apply to the matters not regulated in this Act.
Article 2
In this Act, “foundation” means a private legal person that is dedicated to public-benefit purpose with property endowed by endowers, approved by the competent authority and registered with the court.
In this Act, “government-endowed foundation” means any foundation which meets any of the following conditions:
(1) The foundation is established with property endowed by any government agency, public legal person or government-owned enterprise and such endowment property exceeds 50 percent of its total fund.
(2) The foundation is established with property endowed by any foundation under the preceding subparagraph or together with any government agency, public legal person or government-owned enterprise, and such endowment property exceeds 50 percent of its total fund.
(3) The foundation receives property endowed by any government agency, public legal person, government-owned enterprise or foundation under the preceding two subparagraphs, and such endowment property together with donations received from any government agency, public legal person, government-owned enterprise or foundation under the two preceding subparagraphs, which are included in the fund, exceed 50 percent of its total fund.
(4) The foundation receives property endowed or donated by any foundation under the preceding three subparagraphs or together with any government agency, public legal person or government-owned enterprise, which are included in the fund, exceed 50 percent of its total fund.
A foundation shall be presumed to be a government-endowed foundation if it is established after August 15, 1945, with endowment property from the property left by the Japanese government or people and taken over by the Republic of China (“R.O.C.”) government. This shall apply to any foundation established with endowment property from the property left by the Japanese government or people which should have been taken over, but not taken over, by R.O.C. government.
In this Act, “public-endowed foundation” means any foundation that is not a government-endowed foundation.
In this Act, “fund” means the property required to be registered with the court and the scope are as follows:
(1) Endowment property;
(2) Property included in the fund in accordance with a resolution passed by the foundation’s board of directors (“Board”); and
(3) Property required to be included in the fund under the law.
The regulation on the calculation, determination, property required to be included in the fund, amount, percentage and other matters to be complied with as regards the fund under paragraph 2 and the preceding paragraph shall be stipulated by the Executive Yuan.
In this Acc, “local foundation” means a foundation the main operation or beneficiary of which is limited to a single municipality or county (city) under its charter of endowment and the establishment of which is subject to the local competent authority’s approval.
In this Act, “national foundation” means a foundation the main operation or beneficiary of which is not limited to a single municipality or county (city) under its charter of endowment and the establishment of which is subject to the central competent authority’s approval.
Article 3
Except the matters regarding registration and liquidation, the competent authority of foundations at the central level shall be the regulatory authority of the respective business; at the local level shall be the municipal government if it is in a municipality, or the county (city) government if in a county (city).
If a national foundation’s operation involves more than one central regulatory authority of the respective business, the competent authority shall be the central regulatory authority of the respective business in which the foundation mainly operates.
As regards the establishment approval, its revocation or rescission and supervision of foundations, the competent authority may entrust or mandate its subordinate authority, other government authority, civil organizations, legal persons or individuals to handle.
Article 4
If there is a change to a national foundation’s main operation after its establishment, upon approval of its application, the competent authority may be changed to the central regulatory authority of the respective business in which the foundation mainly operates after the change. With the consent given by the central regulatory authority of the respective business in which the foundation mainly operates after change, the original competent authority may directly transfer the administrative authority without an application.
If there is a change to a local foundation’s main operation after its establishment and accordingly the foundation must transfer its operation to another municipality or county (city), upon approval of its application, the competent authority may be changed to such other municipal or county (city).
A local foundation which meets the criteria for establishment of a national foundation, upon approval of its application, may be converted to a national foundation. A national foundation with justifiable causes, upon approval of its application, may be converted to a local foundation.
The application for approval under the preceding three paragraphs shall be filed with the original competent authority. The regulation on the application procedure, approval conditions, the procedures relating to transfer of administrative authority and other matters to be complied with shall be stipulated by the Ministry of Justice.
The original competent authority, upon its receipt of an application under the preceding paragraph, shall request the prospective competent authority after transfer of administrative authority to respond within 45 days whether it consents to such transfer; a consent shall be deemed given if there is no response within the specified time period.
Article 5
A foundation’s name shall include the word “foundation”. A local foundation’s name shall include the name of the municipality or county (city) where such foundation is established.
No foundation may use a name which is identical with that of another foundation. Where the names of two foundations contain any different kinds, attributes or words that may distinguish the two foundations, such names shall not be considered identical with each other.
No foundation may use a name that is likely to mislead the public about its affiliation with any government agency or implicates discrimination or hatred.
Article 6
A foundation shall be domiciled at the place where its principal office is located and may establish any branch office upon approval by the competent authority.
Article 7
A charter of endowment shall be stipulated when a foundation is established. This shall not apply to a foundation which is established with property endowed by a will.
If there is no will executor for a foundation established with property endowed by a will, the court may appoint a will executor upon application made by the competent authority, a prosecutor or an interested party.
Article 8
The charter of endowment shall specify the following:
(1) Purpose, name and principal office as well as its branch office, if any;
(2) Type and total amount of, and the way to keep and use, the endowment property;
(3) Operation items;
(4) Number, qualification, procedure for the appointment, term of office, selection and removal of directors and, if any, supervisors;
(5) Organization, duties and powers and resolution method of the Board;
(6) Period, if any, for which the foundation is established;
(7) Matters related to merger or consolidation with another foundation if this is permissible; and
(8) The year, month and day when the charter of endowment is stipulated.
If a foundation is established with property endowed by a will and the will states nothing about the matters set out in the preceding paragraph, the charter of endowment shall be stipulated by the will executor.
Article 9
A foundation’s total endowment property at the time of its establishment shall be sufficient to attain its establishment purpose. The competent authority shall stipulate the minimum amount required for establishment (“minimum requirement”) in accordance with the nature of the respective business area under its administrative authority. However, the minimum requirement stipulated by the competent authority for local foundations shall not exceed those for national foundations.
The endowment property set out in the preceding paragraph may be in cash, or movable property, real property or securities in lieu thereof. The competent authority may stipulate the percentage of cash in accordance with the nature of the respective business under its administrative authority.
Article 10
An application for establishment approval of a foundation shall be made with the competent authority together with the following documents:
(1) Application form;
(2) Charter of endowment, or a photocopy of the will if the foundation is to be established with property endowed by a will;
(3) List of endowment property and relevant supporting documents;
(4) Roster of directors and, if any, supervisors, with photocopies of their identification documents and specimen of signatures or seals;
(5) Consent statements to serve as directors or supervisors;
(6) Seal of the foundation;
(7) Endower’s letter to undertake to transfer the ownership of the endowment property to the foundation after the establishment is approved and duly registered;
(8) Work plan;
(9) Anti-money laundering and combating financing of terrorism plan if the place of branch office is located in high-risk countries or areas of money laundering and financing of terrorism; and
(10) Other documents required by the competent authority.
If an application does not comply with the formality or requirement set out in the preceding paragraph and such incompliance is rectifiable, the competent authority shall notify the applicant to rectify within a specified time period. The application may be dismissed if the incompliance is not rectifiable or not rectified within the specified time period.
Article 11
With regard to an application for the establishment of a foundation, the competent authority shall not grant an approval, and shall, if granted, revoke or rescind the approval under any of the following circumstances:
(1) It is not established for public-benefit purpose;
(2) Its residual assets, upon dissolution, may be distributed to natural persons or other profit-seeking legal persons or organizations under the charter of endowment;
(3) The endowment property does not meet the minimum requirement stipulated by the competent authority.
(4) The endowment property or any supporting document is false;
(5) The endower fails to transfer the ownership of endowment property to the foundation;
(6) It collects or offers property or property interest, directly or indirectly, to terrorist organizations, terrorists or persons engaged in terrorist activities; or
(7) The foundation is otherwise in violation of any condition relating to its establishment stipulated under the law or regulation.
Article 12
Within 60 days after its receipt of an application for the establishment of a foundation, the competent authority shall grant approval or dismiss such application; provided that, when necessary, the time period may be extended for not more than 30 days. An approval document shall be issued upon approval of such application.
A foundation’s directors shall, within 15 days after receiving the approval document, apply for registration with the courts having jurisdiction over the places where the principal office and branch office are located. The foundation, within 15 days after its receipt of the registration certificate issued by the court, shall submit a photocopy to the competent authority for record. This shall apply in the event of any change of the registered particulars.
If a foundation fails to register any particular that shall have been registered or any change of the registered particulars after its registration, the foundation may not make any defense relating to this particular or change of particular against any third party.
Article 13
A foundation shall not raise fund or receive property, carry out operation or commit any juristic act in the name of a foundation before its establishment is duly registered.
A person in violation of the preceding paragraph shall be subject to a fine of not less than NT$100,000 and not more than NT$2,000,000.
In the event of a violation of paragraph 1, the fund raised, or property received free of charge shall be returned to donors unless otherwise forfeited under other provision of laws. If a return is difficult as determined by the competent authority, such fund or property shall be handed out to the competent authority and used by the competent authority, or such other organization mandated by the competent authority, in carrying out the plan or relevant public-benefit purpose originally intended by such fund-raising.
A person in violation of the preceding paragraph shall be ordered to make a correction within a specified time period; failing which, the person shall be subject to a fine of not less than NT$50,000 and not more than NT$1,000,000, and the fine may be imposed at each failure to comply therewith.
The competent authority to impose fines or handle the matters under the preceding three paragraphs shall be determined in accordance with the first and second paragraphs of Article 3; if the competent authority may not be determined under the said provisions, the Ministry of Justice shall be the competent authority.
Article 14
A foundation shall not transfer to, or use its property for, the endower or their related party, or other profit-seeking enterprise that the endower or the endower’s related party is the responsible person, a director, a supervisor or a manager.
A person in violation of the preceding paragraph shall be subject to a fine of not less than NT$100,000 and not more than NT$2,000,000.
Article 15
Directors, supervisors, the chief executive officer and persons with similar position shall recuse themselves when conflict of interests occurs in the execution of their duties.
The conflict of interests referred to in the preceding paragraph refers to the situation where directors, supervisors, the chief executive officer and the person with similar position or their related parties gain interest either directly or indirectly through any act or omission in the execution of their duties.
Article 16
Directors, supervisors, the chief executive officer and persons with similar position shall not seek any interest for themselves or their related parties by abusing the power, opportunities or methods in execution of their duties.
Article 17
The interest referred to in the preceding two Articles means, as a result of the director, supervisor, chief executive officer and person with similar position’s execution of their duties, an improper increase of money, articles or other property value to such persons or their related parties.
The related parties referred to in the preceding paragraph and the preceding three Articles means the spouse or relatives within the second degree.
Article 18
A foundation shall use the interest derived from the endowment property and other incomes received after establishment registration in its operation in conformity with the establishment purpose and charter of endowment.
Article 19
A foundation’s property shall be kept and used in the name of the foundation subject to supervision by the competent authority. A foundation shall not deposit its fund with, or make loan to, any director, supervisor, other individual or non-financial institution.
A person who acts in contravention with the preceding paragraph by not keeping and using the property in the name of the foundation shall be subject to a fine of not less than NT$50,000 and not more than NT$1,000,000. A person in violation of the preceding paragraph which restricts the deposit or loan shall be subject to a fine of not less than 2 times and not more than 5 times of the deposit or loan.
Use of property under the first paragraph are as follows:
(1) Deposit in financial institutions;
(2) Purchase of government bond, treasury bills, central bank savings notes, financial bond, negotiable certificate of deposit, bankers' acceptances, commercial papers backed by banks or bills finance companies;
(3) Purchase of moveable and real properties necessary for operation;
(4) Purchase of publicly issued secured corporate bonds, fixed income beneficiary certificates issued by domestic securities investment trust companies pursuant to the principle of security and reliability;
(5) Purchase of shares provided that the total purchase shall not exceed 5 percent of its total property value and the shareholding in a single company shall not exceed 5 percent of this company’s total capital; and
(6) Making other investment which may be helpful to increase its source of funds pursuant to the principle of security and reliability. The type and amount of investment shall be stipulated by the competent authority.
Unless the law provides otherwise, the endowment property shall be used only in any of the following circumstances:
(1) Used in the circumstances set out in subparagraphs (2) to (6) of the preceding paragraph;
(2) Used in the circumstances set out in the second paragraph of Article 62;
(3) Used in the foundation’s operation for its establishment purpose within the period for which it is established if the charter of endowment provides for such use and period; or
(4) Use of the excess, if the endowment property exceeds the minimum requirement stipulated by the competent authority, necessary for the operation set out in the charter of endowment.
Unless otherwise approved by the competent authority, the way to make use of property set out in subparagraphs (4) and (5) of the third paragraph, and the use of endowment property set out in subparagraph (1) of the preceding paragraph shall not be used to purchase the shares or corporate bonds issued by the endower or donor or their affiliates if their total endowment or donation reaches one half of the total fund of the foundation.
If a foundation’s endowment property becomes lower than the minimum requirement stipulated by the competent authority because of its use of the endowment property in accordance with the fourth paragraph, the competent authority shall order the foundation to make up the deficit within a specified time period, and, failing which, the competent authority may rescind its establishment approval.
Article 20
A foundation shall not act as a guarantor of any nature, unless otherwise permitted by any other law or by its charter of endowment.
A foundation shall not be a shareholder of unlimited liability in a company, a general partner of a limited partnership, or a partner of a partnership enterprise.
Directors in violation of the preceding two paragraphs shall be liable for the damages incurred by the foundation as a result thereof. Directors in violation of the first paragraph shall assume the guarantee liability on their own.
Article 21
Any award or donation made by a foundation shall be limited to the operation items set out in its charter of endowment and follow the principle of universality and fairness.
A foundation ’s award or donation to a single organization, legal person or individual shall not exceed 10 percent of its total expenditure of that year unless it meets any of the following conditions:
(1) The award or donation is given to specific parties set out in the charter of endowment;
(2) The award or donation is funded from the endowment property with designated use by the endower;
(3) The amount of the award or donation in that year is below a specified amount; or
(4) The award or donation is given pursuant to other circumstances approved by the competent authority.
The specified amount under subparagraph (3) of the preceding paragraph shall be stipulated by the competent authority.
A person in violation of the second paragraph shall be subject to a fine of not less than NT$30,000 and not more than NT$150,000.
Article 22
A foundation shall not distribute any residual from its endowment property, interest derived thereof and other incomes.
A person in violation of the preceding paragraph shall be subject to a fine of not less than NT$100,000 and not more than NT$2,000,000.
Article 23
The foundation may use the fund to make up its deficit only if it remains insufficient after the foundation shall have used its assets other than the fund to make up the deficit.
Article 24
A foundation shall set up its accounting system and submit to the competent authority for record. The accrual principle shall be adopted as the accounting basis, and the fiscal year shall be based on a calendar year unless otherwise approved by the competent authority. The accounting system shall be formulated in accordance with the generally accepted accounting principle.
A foundation shall establish its internal control and audit system and submit to the competent authority for record if its total property registered with the court or annual income reaches a specified amount. The said foundation shall have its financial statements certified by an accountant and stipulate a code of ethics in management according to the competent authority’s guidance.
The specified amount for the total property and annual income as well as the guidance on the code of ethics in management shall be stipulated by the competent authority.
The accounting principle and principle on the preparation of financial report for foundations shall be stipulated by the competent authority.
Article 25
A foundation’s work plan and budget for the current year shall be passed by the Board within 1 month after the beginning of the year and submitted to the competent authority for record. A foundation’s work report and financial statements for the preceding year shall be passed by the Board within 5 months after the year-end and submitted to the competent authority for record. A risk assessment report shall be attached to the work plan and budget if they are related to the country or areas with high risk in money laundering or financing terrorism.
The work report and financial statements set out in the preceding paragraph shall be submitted to all supervisors, if any, for conducting audit separately after they are passed by the Board, and submitted to the competent authority for record along with a supervisory report for the preceding year prepared by the supervisors.
A foundation shall disclose to the public:
(1) The information submitted to the competent authority for record under the preceding two paragraphs shall be publicly disclosed within 1 month thereafter; provided that, upon the competent authority’s approval, such information of a government-endowed foundation may not be disclosed if the disclosure may adversely affect the national security, diplomatic and military secrecy, overall economic interest or other essential public interest;
(2) The list of the names of the grantors or donors and respective grant or donation amount received by the foundation as well as the list of the names of recipients of grants or donations and respective amount from the foundation in the preceding year; provided that, upon the competent authority’s approval, the information may not be disclosed if the disclosure is opposed by the grantors or donors or recipients of grants or donations in writing in advance or would impede or materially affect the foundation’s operation; and
(3) Other information necessary to facilitate the public’s supervision as designated by the competent authority to be disclosed within a specified time period.
The competent authority may set up a website and order the foundation financial statements of which is required to be certified by an accountant in accordance with the second paragraph of the preceding Article to disclose all or part of the information required to be disclosed in the preceding paragraph by uploading such information on that website.
The regulation regarding the format, items, preparation method, particulars required to be recorded of the work plan, budget, work report and financial statements to be submitted to the competent authority for record in accordance with the first paragraph and other matters to be complied with by a foundation under the preceding paragraph shall be stipulated by the competent authority.
If any of the following circumstances occurs to a foundation, the foundation shall be subject to a fine of not less than NT$30,000 and not more than NT$150,000 and ordered to make a correction within a specified time period; failing which, the foundation may be fined at each failure to comply therewith:
(1) The foundation fails to submit to the competent authority for record in accordance with the first or second paragraph;
(2) The foundation fails to make public disclosure in accordance with the third or fourth paragraph; or
(3) If the information submitted does not conform to the formality, items, preparation method or particulars required to be recorded set out in the regulation stipulated by the competent authority in accordance with the preceding paragraph, the foundation fails to make a correction within the specified time period after it is ordered to do so by the competent authority.
The competent authority may request a foundation to submit the information required to be submitted for record under the first and second paragraphs through electronic transmission. The regulation regarding the procedure and management of transmission as well as other matters to be complied with shall be stipulated by the competent authority.
Article 26
Unless otherwise provided by law or designated by the competent authority, a foundation shall publicly disclose the information through either of the following:
(1) Publish on newspaper or other publications;
(2) Make online search available to the public by transmission through telecommunication networks or any other method; or
(3) Make available for public browsing, transcribing, photocopying, recording, videotaping, photographing, reproduction or duplication.
Article 27
The competent authority, as it deems necessary, may inspect a foundation’s financial status and ascertain whether there is any violation of the conditions on its establishment approval or other legal requirement.
If a foundation fails to comply with the competent authority’s supervision order, or avoids, impedes or refuses to abide such inspection, the person who acts in such violation shall be subject to a fine of not less than NT$ 30,000 and not more than NT$150,000 and may be fined at each failure to comply therewith.
With regard to a foundation that may be easily used for money-laundering or financing terrorist activities because of its establishment purpose or operation, the competent authority shall take any of the following measures:
(1) Conduct risk assessment on anti-money laundering and combating financing terrorism and make updates every two years; and request the foundation to provide relevant information needed within the scope of risk assessment;
(2) Establish risk-based inspection method, inspection frequency and other supervision measures; and
(3) Order the foundation to regularly participate in educational training on the anti-money laundering and combating financing terrorism.
The regulation regarding the scope of the foundation, risk assessment procedure, supervision measures under the preceding paragraph and other matters to be complied with shall be stipulated by the Ministry of Justice.
If a foundation fails to comply with the competent authority’s supervision order in accordance with the third paragraph, or avoids, impedes or refuses to abide such inspection, the person who acts in such violation shall be subject to a fine of not less than NT$ 50,000 and not more than NT$500,000 and may be fined at each failure to comply therewith.
Article 28
If a director’s act in the execution of such director’s duty violates the charter of endowment, the act may be annulled by the court upon an application made by the competent authority, prosecutor or interested party.
A director or supervisor shall be liable for the damages incurred by the foundation as a result of such person’s violation of law or the charter of endowment in the execution of their duties.
Article 29
If any of the following occurs in a director or supervisor’s execution of their duties, the director or supervisor shall be subject to a fine of not less than NT$ 30,000 and not more than NT$150,000 and ordered to make a correction within a specified time period; failing which, the director or supervisor may be fined for each failure to comply therewith; and, in addition hereto, removed from office by the competent authority with a notice to the court for relevant registration:
(1) Records falsely in, or destroy, accounting document, books or statements required to be kept;
(2) Refuses to be inspected by the competent authority or fails to prepare and submit statements to the competent authority pursuant to the law and regulation;
(3) Violates the establishment purpose set out in the charter of endowment; or
(4) Violates other mandatory or prohibitive provisions or fails to perform obligations to be performed under this Act or other regulations authorized hereunder.
Article 30
If any of the following circumstances occurs, the competent authority may order the foundation to make a correction within a specified time period; failing which, the competent authority may rescind the foundation’s establishment approval:
(1) The foundation is in violation of the conditions on its establishment approval;
(2) The foundation is in violation of this Act, the regulations authorized hereunder, charter of endowment or will;
(3) The management and operation of the foundation does not conform to the establishment purpose; or
(4) The establishment purpose of the foundation is not likely to be attained due to improper operation or obvious deterioration of financial status.
Article 31
A dissolved foundation shall be liquidated unless such dissolution results from a merger or consolidation or bankruptcy.
The Civil Code shall apply to the liquidation procedure under the preceding paragraph; for matters not regulated by the Civil Code, the law provisions relating to the liquidation of a company limited by shares shall apply.
A dissolved foundation shall be deemed to continue its existence insofar as it is necessary for the liquidation.
Article 32
Where the establishment approval of a foundation is revoked or rescinded by the competent authority, the preceding Article shall apply mutatis mutandis.
The competent authority, upon revocation or rescission of a foundation’s establishment approval, shall notify the registered court for dissolution registration.
Article 33
The residual assets of a foundation, upon its dissolution or establishment approval being revoked or rescinded by the competent authority and after paying all debts, shall be distributed in accordance with the charter of endowment unless otherwise provided by law or that the establishment approval is void ab initio as a result of revocation hereof; provided, however, that no such residual assets shall be distributed to natural persons or profit-seeking legal persons or organizations.
If the law or charter of endowment does not provide for the matters set out under the preceding paragraph, the residual assets of a foundation shall be distributed to the municipality or county (city) where the foundation is domiciled
If a foundation’s establishment approval is void ab initio as a result of revocation by the competent authority, the residual assets, after paying all debts, shall be returned to the endower; provided, however, that the residual assets shall be distributed to the municipality or county (city) where the legal person is domiciled in the event that:
(1) The revocation of establishment approval is attributable to the endower; or
(2) The return of the residual assets is difficult because of the endower’s domicile being unknown or other reasons.
The residual assets of a foundation under the third paragraph of Article 2 shall be distributed to the public treasury. The preceding three paragraphs shall not apply.
Article 34
If a foundation’s charter of endowment provides for the possibility of a merger or consolidation with another foundation, or there is justifiable cause for a foundation to merge or consolidate with another foundation and the endower expresses no objection, the foundation may be merged or consolidated with another foundation upon a resolution for the merger or consolidation being adopted by a two-thirds majority vote at the Board meeting attended by directors representing three-fourths of all directors and upon an approval by the compete authority on such application.
The application for approval on merger or consolidation of foundations under the preceding paragraph shall be made with the competent authority which shall be the competent authority of the new foundation or the surviving foundation after merger or consolidation, respectively.
The regulation regarding the conditions and procedures for approval on merger or consolidation applications under the first paragraph, revocation of such approval and other matters to be complied with shall be stipulated by the Ministry of Justice.
Article 35
A foundation shall, upon the competent authority’s approval on the merger or consolidation, prepare and publish the financial statements and an inventory of property regarding the merger or consolidation within 10 days as well as give a notice to each creditor of the foundation. A creditor may make objections in writing to the merger or consolidation, if any, within 2 months after the public notice; and, failing which, the creditor shall be deemed to have recognized such merger or consolidation.
A foundation which fails to give the individual notice or the public notice under the preceding paragraph, or to settle its liabilities with or to provide an appropriate security for the claims of the creditors who have made objections within the specified time period under the preceding paragraph shall not use the merger or consolidation as a defense against such creditors.
Article 36
Rights and obligations of a foundation ceasing to exist after consolidation or merger shall be assumed by the surviving or new foundation.
Article 37
The foundation that is surviving, new, or ceasing to exist after the merger or consolidation shall respectively apply for registration of the change, establishment or dissolution with the court.
Article 38
The surviving or newly established foundation shall, no later than 30 days before the date of its assumption of the rights and obligations of the dissolved foundation after merger or consolidation, serve a written notice expressly describing employment conditions to any employee staying after the merger or consolidation according to the negotiation between the existing and the new employers. A written notice regarding the decision of whether to accept the conditions shall be given to the new employer within 10 days beginning with the day on which the employee receives the notice. The absence of such notice from the employee shall be deemed as consent to stay with the new employer after the merger or consolidation.
The service period of the employee accepting the continued employment has served at the dissolved foundation before the merger or consolidation shall be recognized by the surviving or newly established foundation after the merger or consolidation.
The employment contract of any employee not retained or declining the continued employment after merger or consolidation of foundations shall be terminated by the employer prior to such merger or consolidation in accordance with Article 16 of the Labor Standards Act pursuant to which the employee shall be entitled to a prior notice of termination of employment or paid a wage payable during the prior notice period in lieu thereof, and be duly paid the pension or made severance pay as the law prescribes.
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