Cha & Kwon Law Offices advised a business operator seeking to introduce a subscription-based payment service and provided a legal review of a long-term installment sales structure and a related plan for securitizing receivables.

The business involved a structure under which consumers would pay the purchase price of products in installments over a certain period, with sales, payment processing, and settlement carried out through multiple entities. The key issues included ownership of the products, the legal relationship upon early termination, the attribution of receivables, and the feasibility of securitizing such receivables.

Cha & Kwon Law Offices reviewed the contractual structure, focusing on the requirements for installment sales with retention of title and the legal attribution of receivables. Based on the premise that product ownership and receivables constitute separate legal relationships, we analyzed how each right should be attributed under the proposed structure.

We also reviewed how the transferability and securitization of receivables may vary depending on the contractual structure, and proposed restructuring measures aligned with the client’s business objectives.

As a result, Cha & Kwon Law Offices provided key considerations and practical guidance for designing a contract and transaction structure that would ensure legal consistency between the subscription-based sales model and the securitization of receivables.

Cha & Kwon Law Offices provides legal advisory services for subscription-based sales models and financing structures using receivables by comprehensively reviewing contractual relationships and the attribution of receivables, and by designing transaction structures suited to each business model.