1. The term “assigned” means that one party, through contractual agreement, gains ownership of either rights or properties that are granted to it by another party. The term “leases” refers to a contract whereby the parties agree that one of them shall let the other use a thing or benefit by it and the latter shall pay a leasing fee or rent for so doing.
2. Viewed from the standpoint of corporate law, the meaning of the term “major part” varies according to the differing operations and management of different companies. From the standpoint of antitrust law, it means the sale of a substantial part of the operations or properties of an enterprise. That is, not only should the assigned properties or business be quantitatively assessed in relation to the total properties or business of the assigning enterprise; they should also be qualitatively assessed in terms of their relative importance to the assigning enterprise’s total properties or business. Even more important is consideration of whether the market position of the enterprises undergoing combination will change as a result. This is assessed by looking at the overall factors involved in specific cases. Various factors that may be considered are as follows:
1. The proportion which the property or business being assigned constitutes in relation to the total value of the assigning enterprise’s property and business volume.
2. The portion of the property or business being assigned may be viewed separately from the assigning enterprise as independently existing business units (for example, sales outlets, individual departments of the enterprise, trademarks, copyright, patents or other rights or interests).
3. The importance of the part of the property or business being assigned in terms of production, sales, distribution, or other market factors.
4. Whether or not the part of the property or business being assigned will increase the economic power of the assignee company and enhance its current market position.

Relevant article of law: Fair Trade Law, Article 6

“Entrustment to operate another’s business” refers to where a certain enterprise entrusts its operations entirely to another enterprise, but where the business is operated in the name of the entrusting enterprise and operational profits and losses go entirely to the entrusting enterprise. Under such circumstances, the entrusting enterprise holds the decision-making authority, may supervise the operations of the entrusted enterprise, and is bound to pay it certain remuneration. An example would be a franchise-type combination whereby a company headquarters entrusts the management of a regular chain store or a new branch store to another enterprise.

Relevant article of law: Fair Trade Law, Article 6

Articles 11(1)(i) and 11(1)(ii) of the Fair Trade Law employ market share as the basis for the determination as to whether a filing is required for a merger of enterprises. However, in certain mergers, either horizontal or vertical, the calculation of market share of products of the individual enterprise may not meet the requirements set forth in the two subparagraphs cited above, yet post-merger restrictive influence on market competition may still appear due to an increase in market influence. Therefore, Article 11(1)(iii) further adds annual sales revenue as an additional criterion, and authorizes the Fair Trade Commission, the competent authorities at the central government level, to set standards according to prevailing economic conditions. On 1 April 1992, the Fair Trade Commission announced the threshold sales volume triggering the filing requirement as NT$2 billion; on 1 February 1999, it raised the figure to NT$5 billion. It subsequently abandoned the original single threshold system in favor of a dual threshold system (of higher and lower amounts for the respective merging companies), and also set separate standards for financial enterprises and non-financial enterprises, and announced the following revised standards on 25 February 2002:

1. Where an enterprise participating in a merger is a non-financial enterprise that had sales revenue exceeding NT$10 billion in the preceding fiscal year, and moreover an enterprise with which it is combining had sales revenue exceeding NT$1 billion in the preceding fiscal year.
2. Where an enterprise participating in a merger is a financial enterprise that had sales revenue exceeding NT$20 billion in the preceding fiscal year, and moreover an enterprise with which it is combining had sales revenue exceeding NT$1 billion in the preceding fiscal year.
3. “Financial enterprise” refers to financial institutions under Article 4 of the Financial Institution Merger Law and financial holding companies under Article 4 of the Financial Holding Company Law. When determining the sales volume of a financial holding company or other holding company for the preceding fiscal year, the sales volumes in the preceding fiscal year of all subsidiaries in which it has controlling shareholding shall be counted in mergere therewith.
   Relevant article of law: Fair Trade Law, Article 11

The scope of term "enterprise" as used in the Fair Trade Law includes not only companies but also sole proprietorships and partnerships, trade associations, and any other person or organization engaging in transactions through the provision of goods or services. The term "merger" in the Fair Trade Law refers not only to two enterprise merged into one but also to other arrangements by which an enterprise may obtain assets or shares of another enterprise or control its business operations or the appointment and discharge of its personnel. Analyzed from this perspective, the definition of "merger of enterprises" in the Fair Trade Law is broader in scope than that of "merger of companies" in the Company Law.

When two foreign companies undergo a particular merger outside the territory under circumstances outlined in the provisions of Article 6(1) of this Law, and their merger has direct, substantial, and reasonably foreseeable effects on the domestic market and also conforms to the various provisions of Article 11(1), the ultimate controlling foreign parent company shall file to the Commission for approval prior to the merger. The local branches need not make separate applications except that when necessary, they may file the application on behalf of their respective parent companies, adding their own names to it as well.

Relevant article of law: Fair Trade Law, Article 11

Where the merger of two or more enterprises meets any one of the requirements set forth in Article 11(1) of this Law, application for such merger shall be filed in advance with the Commission for approval regardless of whether a parent company-subsidiary relationship exists. According to the provisions of Article 11-1 of the Fair Trade Law, the enterprises fall within any of the following circumstances shall not be filed with the Commission:

1. Where any of the enterprises participating in a merger already holds no less than 50% of the voting shares or capital contribution of another enterprise in the merger and merges such other enterprise.
2. Where enterprises of which 50% or more of the voting shares or capital contribution are held by the same enterprise merge.
3. Where an enterprise assigns all or a principal part of its business or assets, or all or part of any part of its business that could be separately operated, to another enterprise newly established by the former enterprise solely.
4. Where an enterprise, pursuant to the proviso of Article 167, Paragraph 1 of the Company Law or Article 28-2 of the Securities and Exchange Law, redeems its shares held by shareholders so that its original shareholders’ shareholding falls within the circumstances provided for in Article 6, Paragraph 1, Subparagraph 2 herein.

Whether the the enterprises need to file to the Fair Trade Commission for approval as a subsidiary merges with its parent company, it should still be determined on a case-by-case basis.

Relevant article of law: Fair Trade Law, Articles 11, 11-1

According to Article 7 of the Enforcement Rules to the Fair Trade Law, a report of a merger of enterprises required by Article 11(1) of this Law shall be filed:

1. by all enterprises participating in the combination, where an enterprise is merging with, acquiring, or leasing the business or properties of, frequently operating with, or entrusted with the right to operate business for another enterprise(s);
2. by the holding or acquiring enterprise, where an enterprise holds or acquires shares or the capital contribution of another enterprise; or
3. by the controlling enterprise, where an enterprise directly or indirectly controls the business operation or personnel employment and discharge of another enterprise.

If an enterprise required to file a report has not yet been established, the existing enterprises in the merger shall file the report(s).
Relevant articles of law: Fair Trade Law, Article 11; Enforcement Rules to the Fair Trade Law, Article 7.

Although mergers among enterprises can reduce market competition or obstruct the function of market competition, they can also, in many instances, enhance the economic scale of production, lower product cost, increase the overall competitiveness of the resulting enterprise, or lead to a more rational production and distribution process. Therefore, when reviewing a filing the Fair Trade Commission will take into account, under Article 12 of the Fair Trade Law, both the overall economic benefit of the merger would bring and any disadvantages that would result from the restrained competition of market. Where the former outweigh the latter, the Fair Trade Commission may not prohibit the merger. In any decision it makes on a merger filing case in which it has extended the review period, the Commission furthermore may attach conditions or burdens to ensure that the overall economic benefit of the merger outweighs any disadvantages that would result from the restrained competition.
Relevant articles of law: Fair Trade Law, Article 12

Article 12 of the Fair Trade Law provides that the Central Competent Authority, the Fair Trade Commission, may not prohibit any merger filed if the overall economic benefit of the merger outweighs the disadvantages resulting from competition restraint.
The Commission may attach conditions or require undertakings in any of the decisions it makes on the filing cases referred to in Article 11, Paragraph 4 herein in order to ensure that the overall economic benefit of the merger outweighs the disadvantages resulted from competition restraint.
The main reasons for this provision are as follows:

1. To ensure that the benefits to the overall economy outweigh any disadvantages resulting from the restraints on competition, the Commission, as the competent authority, may impose additional conditions or burdens, with consideration to the content of the merger report and to the requirements of the enterprises. This provision is in line with Article 93 of the Administrative Procedure Law: "Where an administrative agency enjoys discretion in making an administrative disposition, it may impose riders. Where it does not enjoy discretion, it may do so only where expressly provided by law or necessary to ensure performance of the statutory preconditions of the administrative disposition and where the content of the rider is limited to such preconditions:
1. time limits
2. conditions
3. burdens;
4. reserving the right of revocation of the administrative disposition;
5. reserving the right to subsequently impose burdens or amend burdens.
2. It increases flexibility in the application of Article 12(1) of the Law, which should facilitate swifter handling of merger cases.

Relevant articles of law: Fair Trade Law, Article 12; Administrative Procedure Law, Article 93