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ENFORCEMENT DECREE OF THE SOCIAL ENTERPRISE PROMOTION ACT

Presidential Decree No. 20141, jun. 29, 2007

Amended by Presidential Decree No. 20681, Feb. 29, 2008

Presidential Decree No. 21230, Dec. 31, 2008

Presidential Decree No. 21590, jun. 30, 2009

Presidential Decree No. 21928, Dec. 30, 2009

Presidential Decree No. 22075, Mar. 15, 2010

Presidential Decree No. 22269, Jul. 12, 2010

Presidential Decree No. 22520, Dec. 9, 2010

Presidential Decree No. 23488, Jan. 6, 2012

Presidential Decree No. 23838, jun. 5, 2012

Presidential Decree No. 24020, Aug. 3, 2012

Presidential Decree No. 25048, Dec. 30, 2013

Presidential Decree No. 25532, Aug. 6, 2014

Presidential Decree No. 27299, jun. 30, 2016

 Article 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Social Enterprise Promotion Act and matters necessary for the enforcement of said Act.
 Article 2 (Detailed Standards for Vulnerable Groups)
“Vulnerable social group” (hereinafter referred to as "vulnerable group") referred to in subparagraph 2 of Article 2 of the Social Enterprise Promotion Act (hereinafter referred to as the "Act"), means any of the following:
1. A person whose monthly average household income does not exceed 60/100 of the national average household income;
5. A person who is eligible for an incentive to promote employment under Article 26 (1) and attached Table 1 of the Enforcement Decree of the Employment Insurance Act, among youths referred to in subparagraph 1 of Article 2 of the Special Act on the Promotion of Youth Employment or among career-interrupted women referred to in subparagraph 1 of Article 2 of the Act on Promotion of Economic Activities of Career-Interrupted Women, etc.;
6. A North Korean refugee referred to in subparagraph 1 of Article 2 of the North Korean Refugees Protection and Settlement Support Act;
8. A person eligible for protection referred to in Articles 5 and 5-2 of the Single-Parent Family Support Act;
9. A marriage-based immigrant referred to in subparagraph 3 of Article 2 of the Framework Act on Treatment of Foreigners Residing in the Republic of Korea;
10. A person eligible for rehabilitation referred to in Article 3 (3) of the Act on Probation, Etc.;
11. Any of the following persons:
(a) Where a victim eligible for relief referred to in Article 16 of the Crime Victim Protection Act suffers from a disability, such victim eligible for relief, his/her spouse, lineal blood-relatives, and brothers and sisters who reside with such victim eligible for relief;
(b) Where a victim eligible for relief referred to in Article 16 of the Crime Victim Protection Act dies, his/her spouse, lineal blood-relatives, and brothers and sisters who have resided with such victim eligible for relief;
12. Any other person recognized by the Minister of Employment and Labor as belonging to a vulnerable group after deliberation by the employment policy deliberative council under Article 10 of the Framework Act on Employment Policy (hereinafter referred to as the "policy deliberative council") in consideration of the situation of employment, etc., such as a person who has been unemployed for at least one year.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 3 (Kinds of Social Services)
“Services in the fields prescribed by Presidential Decree” referred to in subparagraph 3 of Article 2 of the Act, means any of the following:
1. A child care service;
2. An art, tourism, and sports service;
3. A forest conservation and management service;
4. A nursing and housekeeping support service;
5. A service relating to the preservation and utilization of cultural heritage;
6. A business facility management service, including cleaning;
7. An employment service referred to in subparagraph 9 of Article 2-2 of the Employment Security Act;
8. Other services recognized by the Minister of Employment and Labor after deliberation by the policy deliberative council.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 4 and 5 Deleted. <by Presidential Decree No. 22520, Dec. 9, 2010>
 Article 6 (Matters to Be Included in Master Plan for Promotion of Social Enterprises)
“Matters prescribed by Presidential Decree” referred to in Article 5 (2) 4 of the Act, means the following matters:
1. Incorporating a foundation to support social enterprises;
2. Training social enterprise managers, and educating and training social enterprise workers;
3. Financing needed to push forward a master plan for the promotion of social enterprises under Article 5 of the Act (hereinafter referred to as "master plan");
4. Other important measures relating to social enterprises.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 7 (Formulation and Implementation of Master Plan, etc.)
(1) Where necessary to formulate and implement a master plan pursuant to Article 5 (4) of the Act and annual implementation plans subordinate to the master plan, the Minister of Employment and Labor may request the heads of relevant central administrative agencies or the heads of local governments for cooperation in the provision, etc., of relevant information or data.
(2) The heads of relevant central administrative agencies or the heads of local governments in receipt of a request for cooperation referred to in paragraph (1), shall cooperate with such request.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 7-2 (Formulation, etc. of City/Do Plans to Support Social Enterprises)
(1) The Special Metropolitan City Mayor, Metropolitan City Mayors, Do Governors, and the Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor"), shall formulate a City/Do plan to support social enterprises (hereinafter referred to as "support plan") every five years under Article 5-2 (1) of the Act: Provided, That where matters referred to in paragraph (2) are included in a master plan on local employment policies referred to in Article 9 of the Framework Act on Employment Policy, no support plans shall be formulated.
(2) A support plan shall include the following matters:
1. Basic directions and implementation strategy to support social enterprises;
2. Social services provided through social enterprises and target levels of employment to be created through such social services;
3. Discovering and promoting social enterprises;
4. Creating an environment to activate social enterprises, including subsidization of facility costs, etc., referred to in Article 11 of the Act, preferential purchases referred to in Article 12 of the Act, and tax reduction and exemption and subsidization of social insurance premiums referred to in Article 13 of the Act;
5. Plans to raise finances, including budgets;
6. Other necessary matters to promote and support social enterprises.
(3) Each year, Mayors and Do Governors shall compile implementation results for the previous year and a support plan for the relevant year (hereinafter referred to as "annual support plan").
(4) Mayors and Do Governors shall submit a support plan and an annual support plan to the Minister of Employment and Labor after deliberation by a local employment deliberative council referred to in Article 10 (1) of the Framework Act on Employment Policy by the following dates:
1. A support plan: January 15 of each quinquennial year from 2011;
2. An annual support plan: January 15 of each year from 2012.
(5) Upon receipt of a support plan and an annual support plan submitted pursuant to paragraph (4), the Minister of Employment and Labor shall report them to the policy deliberative council.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 8 (Forms of Organizations of Social Enterprises)
“The form of an organization prescribed by Presidential Decree, such as a corporation established under a Special Act, or a non-profit, non-governmental organization” referred to in Article 8 (1) 1 of the Act, means any of the following: <Amended by Presidential Decree No. 23838, Jun. 5, 2012; Presidential Decree No. 24020, Aug. 3, 2012>
2. A non-profit, non-governmental organization referred to in Article 2 of the Assistance for Non-Profit, Non-Governmental Organizations Act;
3. A social welfare corporation referred to in subparagraph 3 of Article 2 of the Social Welfare Services Act;
4. A consumer cooperative referred to in Article 2 of the Consumer Cooperatives Act;
5. A cooperative referred to in subparagraph 1 of Article 2 of the Framework Act on Cooperatives; a federation of cooperatives referred to in subparagraph 2 of the same Article; a social cooperative referred to in subparagraph 3 of the same Article; and a federation of social cooperatives referred to in subparagraph 4 of the same Article;
6. A corporation or non-commercial organization referred to in other Acts.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 9 (Standards for Determining whether Social Objectives Are Realized)
(1) The standards for determining whether the primary objective of an organization is to realize social objectives under the latter part of Article 8 (1) 3 of the Act shall be as classified hereunder: <Amended by Presidential Decree No. 25048, Dec. 30, 2013; Presidential Decree No. 27299, Jun. 30, 2016>
1. Where the primary objective of the organization is to provide social services to vulnerable groups: the proportion of vulnerable groups among persons provided with social services by such organization, shall be at least 50/100 (from 30/100 until December 31, 2018);
2. Where the primary objective of the organization is to provide employment to vulnerable groups: the proportion of vulnerable groups employed by such organization among the total workers of such organization, shall be at least 50/100 (from 30/100 until December 31, 2018);
3. Where the primary objective of the organization is to contribute to a community as classified hereunder:
(a) Where the primary objective is to increase the income and employment of community residents by utilizing human and material resources of the community (referring to a community recognized by the Minister of Employment and Labor as needing contribution from social enterprises after deliberation by the policy deliberative council; hereafter the same shall apply in this subparagraph): the proportion of vulnerable groups employed by such organization, who reside in the community in which such organization is located (hereinafter referred to as "vulnerable groups of the community") among the total workers of such organization or the proportion of vulnerable groups of the community among persons provided with social services by such organization, shall be at least 20/100;
(b) Where the primary objective is to solve social issues, such as poverty, alienation, crime, etc., in the community: the proportion of revenue or expenditure of the part corresponding to the primary objective of such organization, shall be at least 40/100 of the total revenue or expenditure of such organization;
(c) Where the primary objective is to support a group seeking social objectives first, such as providing the community with social services or employment, enhancing the quality of life of community residents, etc., with consulting or marketing services, funds, etc.: the proportion of revenue or expenditure of the part corresponding to the primary objective of such organization, shall be at least 40/100 of the total revenue or expenditure of such organization.
4. Where the primary objective of such organization is to provide vulnerable groups with social services and employment: the proportion of vulnerable groups employed by such organization, among the total workers of such organization and the proportion of vulnerable groups provided with social services by such organization, among persons provided with social services by such organization, shall be at least 30/100 (from 20/100 until December 31, 2018), respectively.
(2) Notwithstanding paragraph (1), where it is impractical to determine whether social objectives are realized as prescribed by subparagraphs of paragraph (1), the Minister of Employment and Labor shall determine whether social objectives are realized after deliberation by the policy deliberative council.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 10 (Standards for Revenue through Business Activities)
“Revenue generated through its business activities shall at least meet the standards prescribed by Presidential Decree” referred to in Article 8 (1) 5 of the Act, means where the proportion of total revenue earned by the relevant organization through business activities for six months immediately before the month in which the relevant organization applies for certification of a social enterprise pursuant to Article 8 (3) of the Act, shall be at least 50/100 of total labor cost (referring to the cost of human resources input into services or production) disbursed by that organization during the same period. <Amended by Presidential Decree No. 25048, Dec. 30, 2013>
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 11 (Matters to Be Stipulated in Articles of Incorporation, etc.)
“Matters prescribed by Presidential Decree” referred to in subparagraph 10 of Article 9 of the Act, means the following matters:
1. Branches of the relevant social enterprise;
2. Raising funds for the relevant social enterprise;
3. Accounting of the relevant social enterprise.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12 (Entrustment of Duties of Support for Management)
(1) “Government-funded institution or non-governmental organization prescribed by Presidential Decree” referred to in Article 10 (2) of the Act, means any of the following institutions or non-governmental organizations: <Amended by Presidential Decree No. 23838, Jun. 5, 2012>
1. An institution (limited to an institution to which the government contributed) designated as a public institution pursuant to Article 4 of the Act on the Management of Public Institutions;
2. Any of the following non-governmental organizations:
(a) A management consulting company with at least three full-time consultants;
(b) A corporation with capabilities to provide specialized consultation services, etc., on technologies, taxation, labor, and accounting;
(c) Deleted. <by Presidential Decree No. 23838, Jun. 5, 2012>
(d) A social enterprise or a non-governmental organization having a track record of assisting corporations or organizations participating in the projects of creating jobs in the social service sector for at least one year pursuant to Article 28 (1) of the Framework Act on Employment Policy;
3. A research institution affiliated with a university referred to in subparagraph 1 of Article 2 of the Higher Education Act.
(2) Where the Minister of Employment and Labor entrusts an institution or organization referred to in paragraph (1) with the duties of providing support pursuant to Article 10 (2) of the Act, he/she may fully or partially subsidize the entrusted institution or organization expenses incurred in the implementation of entrusted duties, within budgetary limits.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12-2 (Notification of Purchase Plans and Purchase Records)
(1) By the end of February each year, pursuant to Article 12 (2) of the Act, the head of a public institution referred to in subparagraph 2 of Article 2 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of their Markets shall notify the Minister of Employment and Labor of the relevant year's plan to purchase goods and services manufactured by social enterprises (hereinafter referred to as "social enterprise product"), purchase records for the previous year, the proportion of the amount of social enterprise products purchased by the relevant institution among the total purchase amount of the relevant institution, etc.
(2) The Minister of Employment and Labor shall compile purchase plans and purchase records for the previous year by public institution under paragraph (1) and post notice thereof on the Internet homepage by April 30 every year.
[This Article Newly Inserted by Presidential Decree No. 23838, Jun. 5, 2012]
 Article 12-3 (Standards for Practical Identicalness)
“Enterprise deemed practically identical” referred to in the former part of Article 18 (2) of the Act, means any of the following enterprises:
1. An enterprise, the representative or manager of which is the same as that of an enterprise of which certification is revoked;
2. An enterprise that acquires main business rights or assets of an enterprise, certification of which is revoked;
3. Where an enterprise of which certification is revoked merges with another enterprise or is spun off, an enterprise established following the merger or spin off;
4. An enterprise deemed by the Minister of Employment and Labor practically identical to an enterprise, certification of which is revoked, in comprehensive consideration of the objectives of business, details of business, members such as executives and workers, decision-making structure, etc.
[This Article Newly Inserted by Presidential Decree No. 23838, Jun. 5, 2012]
 Article 12-4 (Articles of Incorporation)
(1) The articles of incorporation of the Korea Social Enterprise Promotion Agency referred to in Article 20 (1) of the Act (hereinafter referred to as the "Promotion Agency") shall include the following matters:
1. Name and purpose;
2. Main office and branch offices;
3. Executives;
4. Board of directors;
5. Business;
6. Budget and settlement of accounts;
7. Property and accounting;
8. Amendment of articles of incorporation;
9. Establishment, amendment, and repeal of by-laws;
10. Dissolution;
11. Matters concerning public announcement.
(2) Unless the Minister of Employment and Labor permits amendment of articles of incorporation of the Promotion Agency, any amendment thereto shall be invalid.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12-5 (Executives)
(1) The Promotion Agency shall have not exceeding 15 directors, including a president of the Promotion Agency (hereinafter referred to as the "president"), and an auditor to serve as executives.
(2) The president shall represent the Promotion Agency and manage the duties of the Promotion Agency.
(3) The president shall be appointed and dismissed by the Minister of Employment and Labor according to the procedures specified by the articles of incorporation.
(4) The following persons from among the executives referred to in paragraph (1), shall become ex officio executives:
1. One person designated by the Minister of Employment and Labor from among public officials with Senior Executive Service status who are in charge of promoting social enterprises in the Ministry of Employment and Labor;
2. One person designated by the Minister of Strategy and Finance from among public officials with Senior Executive Service status who are in charge of the budget of the Promotion Agency in the Ministry of Strategy and Finance.
(5) Directors, excluding ex officio directors, and an auditor shall be appointed and dismissed by the Minister of Employment and Labor according to the procedures specified by the articles of incorporation.
(6) No non-executive directors shall be paid any remuneration: Provided, That actual expenses incurred in the performance of duties may be paid to non-executive directors, excluding ex officio directors.
(7) The terms of office of the president and directors shall be three years, and the term of office of an auditor shall be two years: Provided, That the term of office of an ex officio director, shall coincide with the period during which he/she serves in his/her original office.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12-6 (Board of Directors)
(1) The Promotion Agency shall establish a board of directors to deliberate on and determine the following matters:
1. Amendment of articles of incorporation;
2. Organization of the Promotion Agency;
3. Appointment and dismissal of the president;
4. Establishment, amendment, and repeal of important by-laws;
5. Business plans, budget, and settlement of accounts;
6. Acquisition and disposal of major property;
7. Other important matters concerning the operation of the Promotion Agency.
(2) The board of directors shall consist of the president and directors.
(3) The president shall convene and preside over meetings of the board of directors.
(4) The auditor may present himself/herself at the meetings of the board of directors and state his/her opinions.
(5) Matters necessary for the operation, etc., of the board of directors shall be specified by the articles of incorporation.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12-7 (Accounting)
The fiscal year of the Promotion Agency shall coincide with the fiscal year of the Government.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12-8 (Cooperation in Duties)
Where necessary for the performance of duties to develop and promote social enterprises, the president may request relevant agencies to submit data.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 12-9 (Registration of Establishment)
(1) The Promotion Agency shall come into existence by having its incorporation registered at the seat of its main office.
(2) Matters to be registered for the Promotion Agency referred to in paragraph (1) shall be as follows:
1. Name and purpose;
2. Locations of main office and branch offices;
3. Names and addresses of executives.
[This Article Newly Inserted by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 13 (Delegation of Authority)
The Minister of Employment and Labor shall delegate to the heads of local employment and labor offices, authority over the following matters pursuant to Article 21 of the Act:
1. Providing financial support to social enterprises providing social services under Article 14 of the Act;
2. Receiving business reports and issuing orders to submit reports or relevant documents necessary for duties, and corrective orders under Article 17 of the Act;
3. Holding hearing and revoking certification under Article 18 of the Act;
4. Imposing and collecting administrative fines under Article 23 of the Act.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
 Article 13-2 (Processing Personally Identifiable Information)
The Minister of Employment and Labor (including persons to whom the Minister of Employment and Labor entrust or delegates his/her authority or duties pursuant to Article 21 of the Act) or the heads of local governments (including persons to whom the relevant authority is delegated or entrusted) may process data, including resident registration numbers or alien registration numbers under subparagraph 1 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, where essential performing the following duties:
1. Certifying social enterprises under Article 7 (1) of the Act;
2. Funding the purchase of sites and for facility expenses, etc., under Article 11 of the Act;
3. Subsidizing labor costs under Article 14 (1) of the Act.
[This Article Wholly Amended by Presidential Decree No. 25532, Aug. 6, 2014]
 Article 14 (Imposition of Administrative Fines)
Criteria for imposing administrative fines under Article 23 (3) of the Act, shall be as listed in the attached Table.
[This Article Wholly Amended by Presidential Decree No. 22520, Dec. 9, 2010]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2007.
Article 2 (Exceptions to Application of Detailed Standards for Determining Whether Social Objectives Are Realized)
Where any of the following requirements are met by December 31, 2008, social objectives shall be deemed realized, notwithstanding the provisions of subparagraphs of Article 9 (1):
1. The proportion of vulnerable groups employed, among the total workers of an organization, shall be at least 30/100 where the primary objective of the organization is to provide employment to vulnerable groups;
2. The proportion of vulnerable groups provided with social services, among persons provided with social services by an organization, shall be at least 30/100, where the primary objective of the organization is to provide social services to vulnerable groups;
3. The proportion of vulnerable groups employed, among the total workers of an organization and the proportion of vulnerable groups provided with social services, among persons provided with social services by an organization, shall be at least 20/100, respectively, where the primary objective of the organization is to provide social services to vulnerable groups.
ADDENDA <Presidential Decree No. 20681, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 21230, Dec. 31, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 22, 2009.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 21590, Jun. 30, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2009: Provided, That the amended provisions of Articles 8 and 9 shall enter into force on January 1, 2010.
Articles 2 through 9 Omitted.
ADDENDA <Presidential Decree No. 21928, Dec. 30, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2010.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 22075, Mar. 15, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 19, 2010. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 22269, Jul. 12, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 22520, Dec. 9, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Exceptions to Submission of Support Plans)
Notwithstanding the amended provisions of Article 7-2 (4) 1, the deadline for the submission of a support plan for year 2011 shall be March 15, 2011.
Article 3 (Transitional Measures concerning Administrative Fines)
Notwithstanding the amended provisions of the attached Table, the former provisions shall apply to criteria for imposition of an administrative fine for a violation committed before this Decree enters into force.
ADDENDA <Presidential Decree No. 23488, Jan. 6, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 23838, Jun. 5, 2012>
This Decree shall enter into force on August 2, 2012: Provided, That the amended provisions of subparagraph 5 of Article 8, shall enter into force on December 1, 2012.
ADDENDA <Presidential Decree No. 24020, Aug. 3, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on August 5, 2012. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 25048, Dec. 30, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 10 shall enter into force on July 1, 2014
Article 2 (Applicability, etc., concerning Standards for Revenues through Business Activities)
(1) The amended provisions of Article 10 shall begin to apply to an entity certified as a social enterprise after the enforcement date referred to in the proviso to Article 1 of the Addenda.
(2) An entity that is certified as a social enterprise pursuant to Article 7 of the Act before the enforcement date referred to in the proviso to Article 1 of the Addenda and falls short of the standards under the amended provisions of Article 10, shall ensure that it meets the standards under the amended provisions of the same Article by December 31, 2015.
ADDENDUM <Presidential Decree No. 25532, Aug. 6, 2014>
This Decree shall enter into force on August 7, 2014.
ADDENDA <Presidential Decree No. 27299, Jun. 30, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2016. (Proviso Omitted.)
Articles 2 through 15 Omitted.