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ENFORCEMENT DECREE OF THE COMMERCIAL ACT

Wholly Amended by Presidential Decree No. 23720, Apr. 10, 2012

Amended by Presidential Decree No. 24076, Aug. 31, 2012

Presidential Decree No. 24697, Aug. 27, 2013

Presidential Decree No. 25214, Feb. 24, 2014

Presidential Decree No. 27205, May 31, 2016

Presidential Decree No. 27261, jun. 28, 2016

Presidential Decree No. 27556, Oct. 25, 2016

Presidential Decree No. 27971, Mar. 29, 2017

Presidential Decree No. 28211, Jul. 26, 2017

PART I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to provide for the matters delegated by the Commercial Act and matters necessary for the enforcement thereof.
 Article 2 (Scope of Petty Merchants)
"Petty merchant" in Article 9 of the Commercial Act (hereinafter referred to as the "Act") shall be defined as a "merchant whose equity capital does not amount to ten million won and who is not a company.
 Article 3 (Preservation of Documents by Electronic Information Processing System)
Where trade books and other important documents relating to business referred to in Article 33 (1) of the Act (hereafter referred to as "books and documents" in this Article) are preserved on microfilm or in any other electronic information processing system in accordance with Article 33 (3) of the Act (hereafter referred to as "electronic information processing system" in this Article), they shall be preserved in a manner described below: Provided, That if books and documents contain signatures or seals affixed by the persons who prepared the books and documents in accordance with the Act, the original books and documents shall be preserved: <Amended by Presidential Decree No. 24076, Aug. 31, 2012>
1. Preservation as an electronic document in accordance with Article 5 (2) of the Framework Act on Electronic Documents and Transactions;
2. Preservation in compliance with the following guidelines in cases other than those subject to subparagraph 1:
(a) Records of the development, changes, and operation of the programs used to preserve books and documents shall be kept in the electronic information processing system in a manner that allows easy understanding of the progress of and procedure for the preservation;
(b) Books and documents shall be preserved in a manner that allows easy understanding of their contents as provided in the Act or accounting practices generally accepted as fair and valid;
(c) Stakeholders shall be allowed to inspect the preserved contents in the form of images or printed documents, if necessary;
(d) Measures shall be prepared against the loss or destruction of data preserved in the electronic information processing system.
PART II COMMERCIAL ACTIVITIES
 Article 4 (Scope of Lakes, Rivers, Ports, and Bays)
The scope of lakes, rivers, ports, and bays referred to in Article 125 of the Act shall be limited to smooth waters as defined in Article 2 (1) 3 (a) of the Enforcement Decree of the Ship Safety Act.
PART III COMPANIES
 Article 5 (Scope of Financial Statements of Limited Liability Companies)
"Documents determined by Presidential Decree" in Article 287-33 of the Act means the following documents:
1. A statement of changes in equity;
2. A statement of appropriation of retained earnings or a statement of disposition of deficits.
 Article 6 (Public Notice of Companies by Electronic Means)
(1) When a company intends to give public notice by electronic means in accordance with the proviso to Article 289 (3) of the Act, it shall be made by using its Internet website.
(2) When a company stipulates in its articles of incorporation that it shall give public notice by electronic means in accordance with the proviso to Article 289 (3) of the Act, the company shall register its Internet website address.
(3) When a company intends to give public notice by electronic means in accordance with the proviso to Article 289 (3) of the Act, it shall ensure easy access to relevant information on the front page of its Internet website and shall take other measures to ensure user convenience.
(4) If it is impossible for a company to give public notice by electronic means due to a failure in the electronic information processing system or any other unexpected event, although the company stipulates in its articles of incorporation that it shall give public notice by electronic means in accordance with the proviso to Article 289 (3) of the Act, the company shall publish the notice in the Official Gazette or a daily newspaper dealing with current affairs, as stipulated in its articles of incorporation in accordance with the main body of Article 289 (3) of the Act.
(5) "Period prescribed by Presidential Decree" in the main body of Article 289 (4) of the Act means the period that ends on a date specified below (hereafter referred to as "public notice period" in this Article):
1. Where it is required to give public notice before the end of a certain period beginning on the date specified by the Act: The specified date;
2. Where it is required by the Act to file a written objection or conduct a certain activity within the period specified in the public notice: The day immediately after the end of the period;
3. Any case other than the cases described in subparagraphs 1 and 2: The day immediately after three months from the date of public notice.
(6) If the total number of days during which public notice is interrupted (referring to where it is impossible to provide many and unspecified people with the published information or where the published information is altered or destroyed) does not exceed one-fifth of the public notice period, the interruption of public notice shall not adversely affect the validity of the public notice, although the public notice is interrupted during the public notice period specified in paragraph (5): Provided, That the foregoing shall not apply where public notice is interrupted by an intentional act or omission or gross negligence of the company.
 Article 7 (Exemption of Inspector's Duties to Investigate and Report)
(1) "Amount determined by Presidential Decree" in Article 299 (2) 1 of the Act means 50 million won.
(2) "Market price calculated by the method determined by Presidential Decree" in Article 299 (2) 2 of the Act means the lower of the following prices:
1. The arithmetic average amount of the average closing price at the exchange for one month retroactive to the date on which the articles of incorporation take effect under Article 292 of the Act (hereafter referred to as "effective date" in this paragraph), the average closing price at the exchange for one week retroactive to the effective date, and the closing price at the exchange on the trading day immediately before the effective date;
2. The closing price at the exchange on the trading day immediately before the effective date.
(3) Paragraph (2) shall not apply where the assets mentioned in subparagraph 2 or 3 of Article 290 of the Act are subject to limitation or encumbrance based on a real right or claim against the use, enjoyment, offering as security, or transfer of ownership.
 Article 8 (Qualification for Transfer Agents)
In order for a person to be qualified as a transfer agent under Article 337 (2) of the Act, the person shall be either the Korea Securities Depository established under Article 294 (1) of the Financial Investment Services and Capital Markets Act (hereinafter referred to as the "Korea Securities Depository") or a stock company registered with the Financial Services Commission in accordance with Article 365 (1) of the aforesaid Act.
 Article 9 (Methods, etc. for Acquisition of Own Shares)
(1) "Methods determined by Presidential Decree" in Article 341 (1) 2 of the Act means either of the following:
1. Method by which a company makes a private or public offer to all shareholders to acquire shares;
2. Method by which a public tender offer is made under Articles 133 through 146.
(2) A company that acquires its own shares shall keep at its head office the statement of acquisition of treasury stock which includes the details of acquisition for six months. In such cases, shareholders and creditors may inspect the statement of acquisition of treasury stock at any time and may request the company to issue certified transcripts or copies of such statement after paying fees determined by the company.
 Article 10 (Guidelines for Acquisition of Own Shares)
A company shall comply with the following guidelines, when it intends to acquire its own shares in accordance with subparagraph 1 of Article 9:
1. When the company intends to acquire its own shares in accordance with a resolution adopted under Article 341 (2) of the Act, it shall determine the following matters by a resolution of its board of directors. In such cases, the conditions for acquisition of shares shall be uniformly determined each time the board of directors adopts a resolution:
(a) Purpose of acquiring its own shares;
(b) Classes and the number of shares to be acquired;
(c) Details of the money or other assets to be delivered in exchange for each share (excluding its treasury stock; hereafter referred to as "money or other assets" in this Article) and the method of calculation thereof;
(d) Total amount of the money or other assets to be delivered in exchange for the stock;
(e) The period during which a share transfer application may be filed, which shall not be less than 20 days nor more than 60 days (hereafter referred to as "filing period for a transfer application" in this Article);
(f) The time to deliver money or other assets in exchange for a transfer, which shall not be later than one month from the end of the filing date of a transfer application (referring to where it is impossible to provide many and unspecified people with the information publicly notified or where the information publicly notified is altered or destroyed), and other conditions for acquisition of shares;
2. The company shall notify each shareholder of its financial standing, the current holdings of its own shares, and the information specified in subparagraph 1, in writing or by electronic document, subject to each shareholder's consent thereto, by not later than two weeks before the commencement of the filing period for a transfer application: Provided, That if the company has issued unregistered stock certificates, it shall give public notice by not later than three weeks before the filing period for a transfer application;
3. A shareholder who intends to transfer his/her shares to the company shall file a share transfer application in writing, stating the class and number of shares he/she intends to transfer, by not later than the last day of the filing period for a transfer application;
4. Where a shareholder files a share transfer application with the company under subparagraph 3, the last day of the filing period for a transfer application shall be the date of formation of the agreement on stock acquisition between the company and the shareholder; and the number of shares calculated by multiplying the number of shares that the shareholder offers to sell in the application filed under subparagraph 3 by the figure obtained by dividing the number of shares that the company intends to acquire under subparagraph 1 (b) by the total number of shares offered to sell in the application (a fraction, if any, shall be cut off) shall be the scope of the agreement formed, if the total number of shares that the shareholder offers to sell in the application exceeds the total number of shares that the company intends to acquire.
 Article 11 (Electronic Register of Shareholders)
(1) Where a company keeps an electronic register of shareholders in accordance with Article 352-2 of the Act, it shall be deemed to keep a register of shareholders in accordance with Article 396 (1) of the Act, if it is possible to print out the descriptions of the electronic register of shareholders at the head office of the company or at a place of business of its transfer agent.
(2) Shareholders and creditors may request to the company, at any time during normal business hours, inspection of the details recorded in the electronic register of shareholders or issuance of the copies thereof in either paper or electronic format. In such cases, the company shall take measures to exclude from the subject matters of inspection or copying other shareholders' e-mail addresses entered therein in accordance with Article 352-2 (2).
 Article 12 (Rejection of Shareholders' Proposals)
"Cases as prescribed by Presidential Decree" in the former part of Article 363-2 (3) of the Act means those cases where the contents of a shareholder's proposal fall under any of the following subparagraphs:
1. Where another proposal is presented again within three years from the date on which a proposal with the same contents was rejected because it obtained merely less than 10/100 of the votes at a general meeting of shareholders;
2. Where the proposal concerns a shareholder's personal grievance;
3. Where the proposal concerns a matter that involves a right of minority shareholders obligated to hold shares in excess of a certain ratio to exercise shareholders' rights;
4. Where the proposal concerns a matter that involves the removal of an incumbent executive officer (applicable only to a listed company as defined in Article 542-2 (1) of the Act (hereinafter referred to as "listed company"));
5. Where the proposal concerns a matter that the company is unable to materialize, is based on an evidently false ground, or defames a particular person.
 Article 13 (Exercise of Voting Rights by Electronic Means)
(1) Where shareholders exercise their voting rights by electronic means pursuant to Article 368-4 of the Act (hereafter referred to as "electronic voting" in this Article), shareholders shall use their official digital signatures as defined in subparagraph 3 of Article 2 of the Digital Signature Act, for identification and electronic voting.
(2) A company that has determined the exercise of voting rights by electronic means pursuant to Article 368-4 of the Act shall include the following information in the individual or public notice for holding a general meeting of shareholders:
1. The Internet website address for electronic voting;
2. The period of electronic voting (which shall be closed on the day immediately before the date on which the general meeting of shareholders is held);
3. Other technical matters necessary for electronic voting.
(3) A shareholder who exercises his/her voting right by electronic voting shall not withdraw or change the vote exercised for relevant shares.
(4) In order to ensure the efficiency and fairness of electronic voting, a company may designate an agency for the management of electronic voting and commission the agency to operate a process for the exercise of voting rights, including verification of shareholders' identifications.
(5) No company, agency designated for the management of electronic voting under paragraph (4), or person in charge of the management of electronic voting shall divulge the results of electronic voting or use such results for any purpose other than those for official duties, until vote counting starts at the general meeting of shareholders.
 Article 14 (Exemption from Investigation of Investment in Kind)
(1) "Amount determined by Presidential Decree" in Article 422 (2) 1 of the Act means 50 million won.
(2) "Market value calculated by the method determined by Presidential Decree" in Article 422 (2) 2 of the Act means the smaller of the following amounts:
1. The arithmetic average amount of the average closing price at the exchange for one month retroactive to the date on which a resolution is adopted at a directors' meeting or at a general meeting of shareholders pursuant to Article 416 of the Act (hereafter referred to as "date of resolution" in this Article), the average closing price at the exchange for one week retroactive to the date of resolution, and the closing price at the exchange on the trading day immediately before the date of resolution;
2. The closing price at the exchange on the trading day immediately before the date of resolution.
(3) Paragraph (2) shall not apply where an asset to be invested in kind is subject to a limitation or encumbrance based on a real right or claim against the use, enjoyment, offering as security, or transfer of ownership.
 Article 15 (Accounting Principles)
"Those provided for in Presidential Decree" in Article 446-2 of the Act means the accounting standards specified in the following subparagraphs: <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
1. A company subject to external audit under Article 2 of the Act on External Audit of Stock Companies: The accounting standards set forth in Article 13 (1) of the aforesaid Act;
2. A public institution under Article 2 of the Act on the Management of Public Institutions: Accounting principles applicable to public enterprises and quasi-governmental institutions under the aforesaid Act;
3. A company, etc. other than the companies specified in subparagraphs 1 and 2: Accounting standards publicly notified by the Minister of Justice in consultation with the Minister of SMEs and Startups and the Financial Services Commission.
 Article 16 (Scope, etc. of Financial Statements of Stock Companies)
(1) "Documents prescribed by Presidential Decree" in Article 447 (1) 3 of the Act means the following documents: Provided, That in cases of a company subject to external audit under Article 2 of the Act on External Audit of Stock Companies, a cash flow statement and footnotes shall be included in such documents in addition to all the following documents:
1. A statement of changes in equity;
2. A statement of appropriation of retained earnings or a statement of disposition of deficits.
(2) "Company determined by Presidential Decree" in Article 447 (2) of the Act means a parent company as defined in subparagraph 2 of Article 1-2 of the Act on External Audit of Stock Companies, of the companies subject to external audit under Article 2 of the aforesaid Act.
 Article 17 (Contents of Business Reports)
Matters required to be described in a business report in accordance with Article 447-2 (2) of the Act are as follows:
1. Objectives of the company; details of significant business activities; current conditions of the places of business, factories, and employees; and current situation of shares and corporate bonds;
2. Progress in and performance of business operations during the pertinent business year (including the current situation of financing and facility investment);
3. Relationship with the parent company; current conditions of subsidiaries; and other important facts about business combination;
4. Business performance and changes in property during the latest three years;
5. Tasks the company is to handle;
6. Names of directors and auditors incumbent in the pertinent business year; their positions in the company; business affairs assigned to them or their main occupations; and business relationships with the company;
7. At least five major shareholders (if a shareholder is a company, the shares held by each subsidiary of the company shall be aggregated); the number of shares held by them; relationships with the company; current situation of investment by the company in such major shareholders;
8. The number of another company's shares held by the company alone, by the company and its subsidiaries, or by the company's subsidiaries, if the number of such shares held by the company alone, by the company and its subsidiaries, or by the company's subsidiaries exceeds 1/10 of the total number of such another company's outstanding shares; the name of such company; and the number of the company's shares held by such company;
9. Important creditors; the amount of obligations owed to them; and the number of the company's shares held by the creditors;
10. Material facts of events that have occurred since the settlement of accounts;
11. Other matters relevant to business operations and deemed important.
 Article 18 (Extent of Capital Reserves to be Set Aside)
Pursuant to Article 459 (1) of the Act, a company shall set aside capital surplus as capital reserves in accordance with the accounting standards prescribed in Article 15.
 Article 19 (Scope of Unrealized Profits)
(1) "Unrealized profits determined by Presidential Decree" in Article 462 (1) 4 of the Act means the net assets on the balance sheet, which have increased as a result of valuation of assets and liabilities according to the accounting principles under Article 446-2 of the Act but have not been offset against unrealized losses. <Amended by Presidential Decree No. 25214, Feb. 24, 2014>
(2) In either of the following cases, unrealized profits may be offset against unrealized losses, notwithstanding paragraph (1): <Newly Inserted by Presidential Decree No. 25214, Feb. 24, 2014>
1. Where unrealized profits and unrealized losses have been incurred as a result of a transaction of derivative-linked securities under Article 4 (2) 5 of the Financial Investment Services and Capital Markets Act and subsequent transactions linked to the former transaction for hedging risks of the transaction;
2. Where unrealized profits and unrealized losses have been incurred as a result of a transaction of derivatives under Article 5 of the Financial Investment Services and Capital Markets Act and subsequent transactions linked to the former transaction for hedging risks of the transaction.
 Article 20 (Issuance of Corporate Bonds)
"Assets or indexes determined by Presidential Decree" in Article 469 (2) 3 of the Act means the prices, interest rates, indexes, or units of underlying assets as defined in Article 4 (10) of the Financial Investment Services and Capital Markets Act, or indexes based on such prices, rates, indexes, or units.
 Article 21 (Issuance of Participating Bonds)
(1) When a company intends to issue corporate bonds the holder of which is entitled to participate in the issuer's distribution of dividends (hereinafter referred to as "participating bonds"), its board of directors shall determine the following matters, if its articles of incorporation do not provide for the matters: Provided, That the foregoing shall not apply where the articles of incorporation provide that such matters shall be determined at a general meeting of shareholders:
1. Total amount of participating bonds;
2. Conditions for and details of participation in the distribution of dividends;
3. A statement that shareholders shall be granted the right to subscribe for participating bonds and the amount of participating bonds subject to the right of subscription.
(2) When a company intends to issue participating bonds to any person other than shareholders, the value of participating bonds that the company is authorized to issue and the details of participation in the distribution of dividends shall be determined by a special resolution adopted at a general meeting of shareholders under Article 434 of the Act, if its articles of incorporation do not provide otherwise for such matters.
(3) When a resolution is adopted pursuant to paragraph (2), the outlines of the resolution on the issuance of participating bonds shall be stated in the individual or public notice given under Article 363 of the Act.
(4) A shareholder who has the subscription right for participating bonds is entitled to acquire the participating bonds allocated in proportion to the number of shares held by him/her: Provided, That the foregoing shall not apply to a fraction that falls short of the minimum amount, of the amount of each participating bond.
(5) A company shall set a specific date and publicly notify that shareholders recorded on the register of shareholders as of the date is entitled to acquire the participating bonds allocated, at least two weeks before the set date: Provided, That the public notice shall be given at least two weeks before the first day of the period specified in Article 354 (1) of the Act, if the date falls within the period.
(6) If shareholders have the right to acquire participating bonds, each shareholder shall be notified of the amount and issue price of participating bonds, conditions for participation in the distribution of dividends, and the purport that he/she will forfeit the right to acquire participating bonds if he/she fails to subscribe for the participating bonds by the specified deadline.
(7) When a company issues unregistered stock certificates, it shall give public notice of the matters specified in paragraph (6).
(8) Individual notice under paragraph (6) or public notice under paragraph (7) shall be given at least two weeks before the date specified in paragraph (5).
(9) If a person who has the right to acquire participating bonds fails to apply for subscription for the participating bonds by the deadline, notwithstanding individual notice under paragraph (6) or public notice under paragraph (7), the person shall forfeit such right.
(10) When a company issues participating bonds, it shall register the following matters with the registry having jurisdiction over its head office within two weeks after payment is fully made in accordance with Article 476 of the Act:
1. The total amount of participating bonds;
2. The amount of each participating bond;
3. The amount paid for each participating bond;
4. A statement that the bond holder is entitled to participate in the distribution of dividends, and the conditions for and details of participation in the distribution of dividends.
(11) If a change occurs to any matter specified in paragraph (10), the change shall be registered with the registry having jurisdiction over the company's head office within two weeks and with the registry having jurisdiction over the company's branch office within three weeks, respectively.
(12) If an event subject to registration occurs in a foreign country when participating bonds are offered in the foreign country, the period for registration shall begin on the date the relevant notice arrives.
 Article 22 (Issuance of Exchangeable Bonds)
(1) When a company intends to issue exchangeable bonds the holder of which may exchange them with shares or any other securities held by the company pursuant to Article 469 (2) 2 of the Act (hereinafter referred to "exchangeable bonds"), the following matters shall be determined by a resolution of its board of directors:
1. Classes and details of the shares or securities subject to exchange;
2. Conditions for exchange;
3. The period during which exchange may be requested.
(2) When a company intends to issue bonds exchangeable with the issuer's treasury stock, to any person other than a shareholder, matters concerning the party to whom the bonds may be issued shall be determined by its board of directors, if its articles of incorporation do not provide for such matters.
(3) A company that issues exchangeable bonds shall deposit shares or securities necessary for exchange in the Korea Securities Depository until the bond holder requests exchange or the end of the period for request for exchange of the bonds. In such cases, the Korea Securities Depository shall earmark and manage the shares or securities as trust property.
(4) A person who requests the exchange of bonds shall submit two sets of written requests to the company, along with the bond certificates.
(5) Written requests made under paragraph (4) shall include the class, descriptions, and number of shares or securities subject to exchange and the date of request, and shall be affixed with the seal or signature of the requesting person.
 Article 23 (Issuance of Redeemable Bonds)
(1) When a company intends to issue bonds redeemable for shares or other securities held by it pursuant to Article 469 (2) 2 of the Act (hereinafter referred to as "redeemable bonds"), the following matters shall be determined by its board of directors:
1. The class and descriptions of the shares or securities with which the bonds are to be redeemed;
2. Conditions for redemption;
3. A statement that the bonds shall be redeemed in exchange for shares or other securities at the company's option or upon the fulfillment of a certain condition or at maturity.
(2) Where a company intends to issue bonds that may be redeemed in exchange for the issuer's treasury stock, to any person other than a shareholder, matters concerning the party to whom such bonds may be issued shall be determined by its board of directors, if its articles of incorporation do not provide for such matters.
(3) A company that issues bonds redeemable upon fulfillment of a certain condition or at maturity shall deposit shares or securities necessary for redemption in the Korea Securities Depository before the fulfillment of a certain condition or the maturity. In such cases, the Korea Securities Depository shall earmark and manage the shares or securities as trust property.
 Article 24 (Issuance of Derivative-Linked Bonds)
When a company intends to issue bonds, the value of which redeemable or payable is determined by the predetermined methods linked to the fluctuation of such things as securities, currencies, or other assets or indexes specified in Article 20, pursuant to Article 469 (2) 3 of the Act (hereinafter referred to as "derivative-linked bonds"), the following matters shall be determined by its board of directors:
1. The securities, currencies, or other assets or indexes to be linked for determining the amount redeemable or payable;
2. The method for determining the amount redeemable or payable in link with the assets or indexes mentioned in subparagraph 1.
 Article 25 (Contents of Bond Subscription Agreement Form, etc.)
At the time of issuance of the bonds described in the subparagraphs of Article 469 (2) of the Act, the bond subscription agreement forms and the register of debentures or bonds shall contain the following matters:
1. Where participating bonds are issued: Matters specified in Article 21 (1) 1 through 3;
2. Where exchangeable bonds are issued: Matters specified in Article 22 (1) 1 through 3;
3. Where redeemable bonds are issued: Matters specified in Article 23 (1) 1 through 3;
4. Where derivative-linked bonds are issued: Matters specified in subparagraphs 1 and 2 of Article 24.
 Article 26 (Eligibility as Bond Administration Companies)
"A bank, trust company, or any other person determined by Presidential Decree" in Article 480-3 (1) means any of the following persons: <Amended by Presidential Decree No. 27556, Oct. 25, 2016>
1. A bank established under the Banking Act;
2. The Korea Development Bank established under the Korea Development Bank Act;
3. The Industrial Bank of Korea established under the Industrial Bank of Korea Act;
4. The Nonghyup Bank established under the Agricultural Cooperatives Act;
5. The Suhyup Bank established under the Fisheries Cooperatives Act;
6. A person authorized to engage in trust business under the Financial Investment Services and Capital Markets Act to safe-keep money entrusted by ordinary investors;
7. A person authorized to engage in investment trading business under the Financial Investment Services and Capital Markets Act to underwrite securities for ordinary investors;
8. The Korea Securities Depository;
9. A securities finance company established under the Financial Investment Services and Capital Markets Act.
 Article 27 (Special Interests in Bond Issuing Company)
"Person determined by Presidential Decree" in Article 480-3 (3) of the Act means a company that intends to become a bond administration company in any of the following cases (including persons in any of the following cases after they become bond administration companies):
1. Where the bond administration company is the largest shareholder described in Article 542-8 (2) 5 of the Act or a significant shareholder described in Article 542-8 (2) 6 of the Act, of the company issuing the relevant bonds;
2. Where the company issuing the relevant bonds falls within either of the following categories in terms of the relationship with the bond administration company:
(a) If the bond administration company is a bank as defined in subparagraph 1 of Article 26: A major shareholder as defined in Article 2 (1) 10 of the Banking Act;
(b) If the bond administration company is a person specified in subparagraph 6 or 7 of Article 26: A major shareholder as defined in Article 9 (1) of the Financial Investment Services and Capital Markets Act;
3. Where the company issuing the relevant bonds and the bond administration company are affiliated companies as defined in subparagraph 3 of Article 2 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as "affiliated companies");
4. Where the company owns shares in the company issuing the relevant bonds or concurrently serves as an executive of the company issuing the relevant bonds and thus it is impracticable to manage bonds impartially because of its special interests in conflict with the interests of bond holders, and where it meets the criteria determined and publicly notified by the Minister of Justice.
 Article 28 (Reporting of Dormant Companies)
(1) A report filed under Article 520-2 (1) of the Act to inform that a company has not closed its business shall be filed in writing.
(2) A written report filed under paragraph (1) shall contain the following information, and the representative of the company or his/her agent shall affix his/her seal or signature thereon:
1. The name of the company; the location of its head office; and the name and address of its representative;
2. The name and address of the agent, if the report filed under paragraph (1) is filed by an agent;
3. A statement that the company has yet to close its business;
4. Descriptions of the competent court;
5. The date of report.
(3) If a report under paragraph (1) is filed by an agent, the written report under paragraph (1) shall be accompanied by a document certifying the power of attorney.
(4) The seal impression of the representative of a company to be affixed on a written report filed under paragraph (1) or (3) shall be identical to the one submitted to the competent registry in accordance with Article 24 (1) of the Commercial Registration Act: Provided, That the foregoing shall not apply where the report is accompanied by written notice sent by the court under Article 520-2 (2) of the Act.
 Article 29 (Scope of Application of Special Provisions concerning Listed Companies)
(1) "Securities market prescribed by Presidential Decree" in the main body of Article 542-2 (1) of the Act means a securities market as defined in Article 8-2 (4) 1 of the Financial Investment Services and Capital Markets Act. <Amended by Presidential Decree No. 24697, Aug. 27, 2013>
(2) "Stock companies determined by Presidential Decree" in the proviso to Article 542-2 (1) of the Act means the stock companies that function as vehicles for making collective investments under Article 6 (5) of the Financial Investment Services and Capital Markets Act.
 Article 30 (Stock Options)
(1) "Relevant company determined by Presidential Decree" in the main body of Article 542-3 (1) of the Act means a corporation specified in any of the following subparagraphs: Provided, That the scope of the corporations falling under subparagraph 1 or 2 shall be limited to those engaging in manufacturing or sales which affect the results of export of the company that grants a stock option, or those engaging in research and development projects for technical innovation of such company:
1. A foreign corporation in which investments made by the relevant company as the largest investor are at least 30/100 of the corporation's total equity capital;
2. A foreign corporation in which investments made by the foreign corporation mentioned in subparagraph 1 as the largest investor are at least 30/100 of the former foreign corporation's equity capital, or a foreign corporation in which investments made by such foreign corporation as the largest investor are at least 30/100 of the former foreign corporation's equity capital;
3. If the relevant company is a financial holding company as defined in the Financial Holding Companies Act, an unlisted corporation among subsidiaries and sub-subsidiaries of the financial holding company.
(2) "Persons determined by Presidential Decree, including the largest shareholder" in the proviso to Article 542-3 (1) of the Act means the following persons: Provided, That persons who fall within specially related persons when they become executives of a relevant company or an affiliated company under paragraph (1) (including where the executive is a director or auditor who does not engage in the regular business of the affiliated company) shall be excluded herefrom:
1. The largest shareholder as defined in Article 542-8 (2) 5 of the Act and persons specially related to the largest shareholder;
2. Major shareholders as defined in Article 542-8 (2) 6 of the Act and persons specially related to such major shareholders.
(3) "Limit determined by Presidential Decree" in Article 542-3 (2) of the Act means the number of shares equivalent to 15/100 of the total number of stocks issued and outstanding. In this regard, stock options granted pursuant to Article 542-3 (3) of the Act shall be included in calculating the number of shares.
(4) "Limit determined by Presidential Decree" in the former part of Article 542-3 (3) of the Act means the number of shares determined according to the following classification:
1. A corporation with equity capital valued at 300 billion won or more as at the end of the latest business year: The number of shares equivalent to 1/100 of the total number of stocks issued and outstanding;
2. A corporation with equity capital valued at less than 300 billion won as at the end of the latest business year: The number of shares equivalent to 3/100 of the total number of stocks issued and outstanding.
(5) "Cases provided for by Presidential Decree" in Article 542-3 (4) means such cases where a person granted a stock option dies, retires or resigns from office due to an event not attributable to the person. Such events not attributable to the person shall not include retirement or resignation due to old age.
(6) In any of the following cases, a listed company may revoke the grant of a stock option by resolution of its board of directors, as stipulated by its articles of incorporation:
1. If the person granted the stock option voluntarily retires or resigns from office;
2. If the person granted the stock option intentionally or negligently inflicts substantial loss on the company;
3. If the company is unable to accept the exercise of the stock option due to bankruptcy or any similar event;
4. If any other event stipulated as a ground for revocation in the stock option grant agreement made with the person granted the stock option occurs.
(7) Where the date for retirement or resignation of a director, auditor or employee is set as the date for exercising a stock option, but such director, auditor or employee retires or resigns from office due to an event not attributable to him/her, a period of at least three months from the date of retirement or resignation shall be additionally given for the exercise of the stock option.
 Article 31 (Public Notification of Convocation of General Meetings of Shareholders)
(1) "Stocks, the number of which does not exceed the number determined by Presidential Decree" in Article 542-4 (1) of the Act means stocks not exceeding 1/100 of the total number of voting stocks issued and outstanding.
(2) A listed company may give public notice under Article 542-4 (1) through the electronic public disclosure system operated by the Financial Supervisory Service established under Article 24 of the Act on the Establishment, etc. of Financial Services Commission, or by an exchange that has obtained permission under Article 373-2 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "exchange"). <Amended by Presidential Decree No. 24697, Aug. 27, 2013>
(3) "Matters prescribed by Presidential Decree" in Article 542-4 (2) of the Act means the following matters:
1. Relationship between the candidates and the largest shareholder;
2. Details of transactions between the candidates and the company during the latest three years.
(4) "Matters determined by Presidential Decree, including activities and salaries of outside directors, and outlines of business" in the main body of Article 542-4 (3) of the Act means the following matters:
1. Activities of outside directors and other directors who do not engage in the regular business of the company, including records of attendance at directors' meetings and opinions expressed by votes on resolutions in the directors' meetings, and remunerations for them;
2. Details of transactions under the subparagraphs of Article 542-9 (3) of the Act;
3. An overview of business, including the current status of business, and documents prepared for reference in the manner prescribed by the Financial Services Commission for each item of the agenda brought before a general meeting of shareholders.
(5) "Methods prescribed by Presidential Decree" in the proviso to Article 542-4 (3) of the Act means the methods by which a listed company publishes the documents specified in paragraph (4) on its Internet website and keeps such documents at the following places to make them avaliable to the general public for inspection. <Amended by Presidential Decree No. 24697, Aug. 27, 2013>
1. The head office and branch offices of the listed company;
2. Transfer agents;
3. The Financial Services Commission;
4. The exchange.
 Article 32 (Companies subject to Reduced Requirements for Exercise of Minority Shareholders' Rights)
"Listed companies determined by Presidential Decree" in Article 542-6 (2) through (5) means listed companies with equity capital valued at 100 billion won or more as at the end of the latest business year.
 Article 33 (Companies subject to Special Provisions concerning Cumulative Voting)
"Listed company determined by Presidential Decree" in Article 542-7 (2) of the Act means a listed company with total assets valued at two trillion won or more as at the end of the latest business year.
 Article 34 (Outside Directors, etc. of Listed Companies)
(1) "Cases determined by Presidential Decree" in the main body of Article 542-8 (1) of the Act means the following cases: <Amended by Presidential Decree No. 24697, Aug. 27, 2013>
1. Where the listed company is a venture business as defined in the Act on Special Measures for the Promotion of Venture Businesses with total assets valued at less than 100 billion won as at the end of the latest business year, which has listed its stocks on the KOSDAQ market (referring to the KOSDAQ market specified in Article 8 of the Addenda to the Enforcement Decree of the Financial Investment Services and Capital Markets Act as amended by Presidential Decree No. 24697; the same shall apply hereinafter) or the KONEX market (referring to the KONEX market specified in Article 11 (2) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; the same shall apply hereinafter);
2. Where the listed company is a listed company for which rehabilitation proceedings have commenced or which has been declared bankrupt under the Debtor Rehabilitation and Bankruptcy Act;
3. Where the listed company is a listed company that has newly listed its stocks on the securities market (referring to the securities market specified in Article 176-9 (1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; the same shall apply hereinafter), the KOSDAQ market, or the KONEX market (applicable only until the day preceding the date of the first general meeting of shareholders held since listing): Provided, That the foregoing shall not apply where a company that has listed its stocks on the securities market and is required to appoint outside directors becomes a company that has listed its stocks on the KOSDAQ or KONEX market, or a company that has listed its stocks on the KOSDAQ or KONEX market and is required to appoint outside directors becomes a company that has listed its stocks on the securities market;
4. The listed company is a corporate restructuring real estate investment trust under the Real Estate Investment Company Act;
5. The listed company is a listed company that has resolved to dissolve.
(2) "Listed companies determined by Presidential Decree" in the proviso to Article 542-8 (1) of the Act means listed companies with total assets valued at two trillion won or more as at the end of the latest business year.
(3) "Act separately determined by Presidential Decree" in Article 542-8 (2) 4 of the Act means any of the following finance-related Acts and subordinate statutes (including corresponding foreign finance-related Acts and subordinate statutes): <Amended by Presidential Decree No. 27205, May 31, 2016>
2. The Banking Act;
19. The Use and Protection of Credit Information Act;
23. The Special Purpose Companies for Mortgage-Backed Bonds Act;
(4) “Persons who have a special relationship with the shareholder as prescribed by Presidential Decree" in Article 542-8 (2) 5 of the Act means the following persons (hereinafter referred to as "specially related persons"):
1. Persons who fall within any of the following categories, if the shareholder is a private individual:
(a) Spouse (including a person who has a de facto marital relationship);
(b) Blood relatives in the sixth or closer degree;
(c) Marriage relatives in the fourth or closer degree;
(d) A corporation or organization and directors, executive officers and auditors thereof, where the shareholder, alone or jointly with the persons specified in items (a) through (c) above, has invested at least 30/100 of the equity capital of such corporation or organization or has de facto control over important matters in the management of the corporation or organization, including appointment and dismissal of directors, executive officers, and auditors;
(e) A corporation or organization and directors, executive officers and auditors thereof, where the shareholder, alone or jointly with the persons specified in items (a) through (d) above, has invested at least 30/100 of the equity capital of such corporation or organization, or has de facto control over important matters in the management of the corporation or organization, including appointment and dismissal of directors, executive officers, and auditors;
2. The following persons, if the shareholder is a corporation or organization;
(a) Directors, executive officers, and auditors;
(b) Affiliated companies and directors, executive officers and auditors thereof;
(c) A private individual who, alone or jointly with the persons specified in the items of subparagraph 1, has invested at least 30/100 of the equity capital of the shareholder or has de facto control over important matters in the management of the shareholder, including appointment and dismissal of directors, executive officers and auditors of the shareholder; persons or organizations in a relationship specified in the items of subparagraph 1 (excluding their affiliated companies; the same shall apply hereafter in this subparagraph) with the private individual; and directors, executive officers and auditors of such persons or organizations;
(d) An organization and directors, executive officers and auditors thereof, where the shareholder, alone or jointly with the persons specified in items (a) through (c) above, has invested at least 30/100 of the equity capital of such organization or has de facto control over important matters in the management of the organization, including appointment and dismissal of directors, executive officers, and auditors.
(5) "Person determined by Presidential Decree" in Article 542-8 (2) 7 of the Act means any of the following: <Amende by Presidential Decree No. 27261, Jun. 28, 2016>
1. A person who currently, or during the latest two years, engaged in the regular business of an affiliated company of the listed company as a director, executive officer, auditor or employee;
2. A person who currently, or during the latest two years, worked for any of the following corporations or entities (referring to an attorney-at-law or a foreign legal consultant who works for a law firm, a law firm (limited liability), a law firm partnership, a law office operated by at least two attorneys-at-law in a uniform manner in accepting and handling cases or performing legal affairs as attorneys-at-law, distributing dividends or sharing expenses, joint law firm, or a law office specializing in foreign legal consulting, if such law firm, law firm partnership, or law office is involved) as a director, executive officer, auditor, or employee:
(a) A corporation whose total amount of transactions with the listed company during the latest three years is at least 10/100 of the total assets (referring to the total assets of the listed company on the balance sheet as at the end of the latest business year) or the gross sales (referring to the gross sales of the listed company on the income statement as at the end of the latest business year; the same shall apply hereafter in this Article);
(b) A corporation who has entered into a single contract with the relevant listed company during the latest business year for an amount of at least 10/100 of the gross sales of the listed company;
(c) A corporation whose aggregate amount of money, securities, and other certificates or deeds lent or borrowed by the listed company and other obligations guaranteed by the listed company, including collaterals provided is at least 10/100 of the equity capital (referring to the equity capital of the listed company on the balance sheet as at the end of the latest business year);
(d) A corporation, at least 5/100 of the equity capital (referring to the equity capital of the corporation in which the listed company has invested) of which has been invested by the listed company as of the date of an annual general meeting of shareholders of the listed company;
(e) A corporation which has entered into a technical cooperation agreement with the listed company;
(f) An accounting firm appointed as the auditor of the listed company;
(g) A law firm, law firm (limited liability), law firm partnership, law office operated by at least two attorneys-at-law uniformly in accepting and handling cases or performing legal affairs as attorneys-at-law, distributing dividends or sharing expenses, joint law firm, or law office specializing in foreign legal consulting, accounting firm, or tax firm that mainly provides the listed company with legal advice or business consulting under an advisory agreement, or a corporation that otherwise provides the listed company with consulting services;
3. A person who currently works for at least two companies in addition to the listed company as a director, executive officer, or auditor;
4. An attorney-at-law (including foreign legal consultants who work for the attorney-at-law), certified public accountant, or certified tax accountant who conducts an accounting audit on the listed company, serves as a tax agent for the listed company, or provides the listed company with legal advice or business consulting services under an advisory agreement;
5. A person whose share holdings (as defined in Article 133 (3) of the Financial Investment Services and Capital Markets Act) are at least 1/100 of the total number of issued and outstanding shares of the listed company;
6. A person whose balance of transactions (excluding standardized transactions conducted with the listed company in accordance with standard terms and conditions as defined in subparagraph 1 of Article 2 of the Act on the Regulation of Terms and Conditions) with the listed company is at least 100 million won.
(6) Notwithstanding paragraph (5) 2, the following corporate institutional investors and foreign financial companies equivalent to such institutional investors shall be excluded from among the persons listed in paragraph (5): <Amended by Presidential Decree No. 27205, May 31, 2016>
1. Banks established under the Banking Act;
2. The Korea Development Bank established under the Korea Development Bank Act;
3. The Industrial Bank of Korea established under the Industrial Bank of Korea Act;
4. The Export-Import Bank of Korea established under the Export-Import Bank of Korea Act;
5. The National Agricultural Cooperative Federation and the Nonghyup Bank established under the Agricultural Cooperatives Act;
6. The National Federation of Fisheries Cooperatives established under the Fisheries Cooperatives Act;
7. The Korea Federation of Savings Banks and mutual savings banks established under the Mutual Savings Banks Act;
8. Insurance companies established under the Insurance Business Act;
9. Specialized credit financial companies established under the Specialized Credit Finance Business Act;
10. The National Credit Union Federation of Korea established under the Credit Unions Act;
11. The National Forestry Cooperatives Federation established under the Forestry Cooperatives Act;
12. The Korean Federation of Community Credit Cooperatives established under the Community Credit Cooperatives Act;
13. The Korea Housing Finance Corporation established under the Korea Housing Finance Corporation Act;
14. Investment traders and investment brokers established under the Financial Investment Services and Capital Markets Act;
15. Merchant banks established under the Financial Investment Services and Capital Markets Act;
16. Collective investment business entities established under the Financial Investment Services and Capital Markets Act;
17. Securities finance companies established under the Financial Investment Services and Capital Markets Act;
18. The following corporations engaged in the management and operation of a fund established under an Act:
(a) The Government Employees Pension Service established under the Public Officials Pension Act;
(b) The Korea Teachers Pension established under the Pension for Private School Teachers and Staff Act;
(c) The Korea Sports Promotion Foundation established under the National Sports Promotion Act;
(d) The Korea Credit Guarantee Fund established under the Credit Guarantee Fund Act;
(e) The Korea Technology Finance Corporation established under the Korea Technology Finance Corporation Act;
(f) The Korea Trade Insurance Corporation established under the Trade Insurance Act;
(g) The Korea Federation of Small and Medium Business established under the Small and Medium Enterprise Cooperatives Act;
(h) The Arts Council Korea established under the Culture and Arts Promotion Act;
19. The following corporations that provide mutual aid services under an Act;
(a) The Korean Teachers' Credit Union established under the Korean Teachers' Credit Union Act;
(b) The Military Mutual Aid Association established under the Military Personnel Mutual Aid Association Act;
(c) The Construction Guarantee and the Korea Specialty Contractor Financial Cooperative established under the Framework Act on the Construction Industry;
(d) The Electric Contractors' Financial Cooperative established under the Electric Constructors' Financial Cooperative Act;
(e) The Information and Communication Financial Cooperative established under the Information and Communications Construction Business Act;
(f) The Public Officials Benefit Association Act established under the Public Officials Benefit Association Act;
(g) The Korea Scientists and Engineers Mutual-Aid Association established under the Korea Scientists and Engineers Mutual-Aid Association Act.
 Article 35 (Transactions with Interested Persons Including Major Shareholders)
(1) "Transactions determined by Presidential Decree" in Article 542-9 (1) of the Act means the following transactions:
1. Providing an asset as security;
2. Endorsement (excluding endorsement that does not have the effect of guaranteeing acceptance and payment under Article 15 (1) of the Bills of Exchange and Promissory Notes Act) of a bill of exchange or promissory note (including electronic bills under the Issuance and Distribution of Electronic Bills Act);
3. Promise to make an investment;
4. A transaction falling under any item of Article 38 (1) 4 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, the purpose of which is to avoid restrictions on credit extension to the persons listed in the subparagraphs of Article 542-9 (1) of the Act (referring to restrictions on transactions falling under any of subparagraphs 1 through 3, such as lending money, securities, and other assets with economic value, guaranteeing the payment of debts, and purchase of securities for financing purposes);
(2) "Granting of credit determined by Presidential Decree" in Article 542-9 (2) 1 of the Act means lending money to subsidize welfare expenses such as school expenses, housing funds, or medical expenses, within 300 million won as determined by the company.
(3) "Credit granting determined by Presidential Decree" in Article 542-9 (2) 3 of the Act means provision of credit to any of the following persons according to a legal procedure, as necessary to achieve a business objective of a company:
1. A major corporate shareholder;
2. A corporation in which case the total sum of shares invested by the company (including its subsidiaries) and shares invested by its major corporate shareholders, of the specially-related persons of its major corporate shareholders, is larger than the total sum of shares invested by its major individual shareholders and persons specially related to such major individual shareholders (excluding the company and its subsidiaries);
3. A corporation in which case the total sum of shares invested by the company (including its subsidiaries) and shares invested by the corporations referred to in subparagraphs 1 and 2, of the specially-related persons of its major individual shareholders, is larger than the total sum of shares invested by its major individual shareholders and persons specially related to such major individual shareholders (excluding the company and its subsidiaries).
(4) "Listed company determined by Presidential Decree" in Article 542-9 (3) of the Act means a listed company with total assets valued at two trillion won ore more as at the end of the latest business year.
(5) "Persons prescribed by Presidential Decree" in Article 542-9 (3) of the Act means the specially related persons described in Article 34 (4).
(6) "Scale determined by Presidential Decree" in Article 542-9 (3) 1 of the Act means either of the following scales based on total assets or gross sales:
1. If the company referred to in paragraph (4) is an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission: 1/100 of the total assets of the company as at the end of the latest business year;
2. If the company referred to in paragraph (4) is not an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission: 1/100 of the total assets or gross sales of the company as at the end of the latest business year.
(7) "Amount determined by Presidential Decree" in Article 542-9 (3) 2 of the Act means either of the following amounts, as relevant:
1. If the company referred to in paragraph (4) is an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission: 5/100 of the total assets of the company as at the end of the latest business year;
2. If the company referred to in paragraph (4) is not an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission: 5/100 of the total assets or gross sales of the company as at the end of the latest business year.
(8) "Matters determined by Presidential Decree" in Article 542-9 (4) of the Act means the following matters:
1. Details, date, period, and conditions of transactions;
2. Total amount and the balance of transactions with each counterparty during the pertinent business year.
(9) "Transactions determined by Presidential Decree" in Article 542-9 (5) 1 of the Act means transactions conducted in accordance with standard terms and conditions as defined in subparagraph 1 of Article 2 of the Act on the Regulation of Terms and Conditions.
 Article 36 (Full-time Auditors)
(1) "Listed company determined by Presidential Decree" in the main body of Article 542-10 (1) of the Act means a listed company with total assets valued at 100 billion won or more as at the end of the latest business year.
(2) "Person determined by Presidential Decree" in Article 542-10 (2) 3 of the Act means either of the following categories of person:
1. The spouse or a lineal ascendant or descendant of a director or executive officer who engages in the regular business of the company;
2. A person who currently, or during the latest two years, engaged in the regular business of the company as a director, executive officer, or employee.
 Article 37 (Audit Committees)
(1) "Listed company determined by Presidential Decree" in Article 542-11 (1) of the Act means a listed company with total assets valued at two trillion won or more as at the end of the latest business year: Provided, That any of the following categories of listed companies shall be excluded herefrom:
1. A listed company which is a real estate investment company as defined in the Real Estate Investment Company Act;
3. A listed company for which rehabilitation proceedings have commenced under the Debtor Rehabilitation and Bankruptcy Act;
4. A listed company that has newly listed its stocks on the securities market or the KOSDAQ market (applicable only until the day preceding the date of the first general meeting of shareholders held since listing): Provided, That this shall not apply where a company that has listed its stocks on the securities market and is required to establish the audit committee corresponds to a company that has listed its stocks on the KOSDAQ market or where a company that has listed its stocks on the KOSDAQ market and is required to establish the audit committee corresponds to a company that has listed its stocks on the securities market.
(2) "Accounting or financing expert as determined by Presidential Decree" in Article 542-11 (2) 1 of the Act means any of the following persons: <Amended by Presidential Decree No. 23720, Apr. 10, 2012>
1. A certified public accountant engaged in the relevant business for at least five years;
2. A person who holds at least a master’s degree in accounting or finance and who has worked for a research institute or university at least as a researcher or an assistant professor in accounting or finance for an aggregate of at least five years;
3. A person who has worked for a listed company as an executive officer in charge of accounting or finance for an aggregate of at least five years or who has worked for a listed company as an executive officer or employee in accounting or finance for an aggregate of at least ten years;
4. A person who has worked for an institution listed in the items of Article 29 (2) 4 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act in charge of accounting or finance or in charge of supervision over accounting or finance for an aggregate of at least five years.
 Article 38 (Restrictions on Voting Rights on Appointment or Dismissal of Auditors, etc.)
(1) "Persons determined by Presidential Decree" in the main body of Article 542-12 (3) of the Act means the following persons:
1. Persons who hold shares on account for the largest shareholder or persons specially related to the largest shareholder;
2. Persons who have delegated their voting rights (applicable only to the voting rights delegated for the relevant case) to the largest shareholder or persons specially related to the largest shareholder (including the power to instruct the exercise of a voting right).
(2) "Listed company determined by Presidential Decree" in the main body of Article 542-12 (3) of the Act means a listed company with total assets valued at two trillion won or more as at the end of the latest business year.
 Article 39 (Scope of Application of Compliance Guidelines and Compliance Officers)
"Listed company determined by Presidential Decree" in Article 542-13 (1) of the Act means a company with total assets valued at 500 billion won or more as at the end of the latest business year: Provided, That listed companies required to establish internal control standards and appoint a compliance officer under any other Act shall be excluded herefrom.
 Article 40 (Compliance Guidelines ,etc.)
(1) Compliance guidelines under Article 542-13 (1) of the Act (hereinafter referred to as "compliance guidelines") shall include the following matters:
1. Procedures for the establishment and amendment of compliance guidelines;
2. Procedures for the appointment and dismissal of compliance officers under Article 542-13 (2) of the Act;
3. Guarantees of compliance officers' independence in performance of their duties;
4. Laws, regulations, and legal procedures with which executives and employees shall comply in the course of their duties;
5. Education of executives and employees on the compliance guidelines;
6. Procedures and methods for ascertaining whether executives and employees comply with the compliance guidelines;
7. Dispositions against executives and employees who violate the compliance guidelines in the course of executing business affairs;
8. Methods for conveying information necessary for compliance control to compliance officers;
9. Evaluation of the validity of the compliance guidelines.
(2) Establishment or amendment of the compliance guidelines shall be subject to resolution by the board of directors.
 Article 41 (Qualification Criteria, etc. for Compliance Officers)
"Persons determined by Presidential Decree" in Article 542-13 (5) 3 of the Act means the following:
1. Persons who have worked for a listed company as an auditor, audit committee member, or compliance officer, or in the legal affairs department relating to such functions for an aggregate of at least ten years;
2. Persons who hold at least a master’s degree in law and who have worked for a listed company as an auditor, audit committee member, or compliance officer, or in the legal affairs department relating to such functions for an aggregate of at least ten years.
 Article 42 (Restrictions on Duties of Compliance Officers)
No compliance officer shall take charge of any business affair that may affect the performance of his/her duties as a compliance officer.
 Article 43 (Scope of Documents Equivalent to Balance Sheets)
"Balance sheets or their equivalents determined by Presidential Decree" in Article 616-2 (1) of the Act means documents describing the current situation of all assets, liabilities, and equity capital as at the end of the relevant fiscal year in a form equivalent to balance sheets, so as to clearly state the financial standing of the relevant company in accordance with the principles of double-entry bookkeeping.
 Article 44 (Procedures for Imposition and Collection of Fines for Negligence)
(1) When the Minister of Justice intends to impose a fine for negligence under Article 637-2 of the Act, he/she shall investigate into and ascertain the relevant violation and then give written notice to the person upon whom the fine for negligence is to be imposed, that the person shall pay the fine for negligence, stating the relevant fact, amount of the fine for negligence, methods and period for filing a petition for objection, etc. in detail.
(2) When the Minister of Justice intends to impose a fine for negligence under paragraph (1), he/she shall provide an opportunity to make an oral or written statement (including a statement by electronic document) within a specified period of at least ten days, to the person upon whom the fine for negligence is to be imposed. If a person fails to present any statement by the specified deadline, the person shall be deemed to have no objection to the fine for negligence.
(3) The Minister of Justice shall take into consideration the motive and consequences of the relevant violation, the duration and degree of the violation, etc. when he/she determines the amount of a fine for negligence.
(4) Fines for negligence shall be collected in accordance with the procedure for the collection of revenues under the Acts and subordinate statutes regarding the management of national funds. In such cases, a formal demand for payment shall also state the methods and period for filing a petition for objection.
PART IV MARINE COMMERCE
 Article 45 (Scope of Ships Excluded from Application of Provisions in Part for Marine Commerce)
"Cases as prescribed by Presidential Decree" in the proviso to Article 741 (1) of the Act means those cases where a State-owned or public ship falls within any of the following categories:
1. A warship or a police ship;
2. A ship for the inspection of fisheries or for the surveillance of smuggling;
3. Any other ship not used for profit-making but for actual public use, such as a ship for emergency or for human rescue.
 Article 46 (Extent of Navigable Coastal Areas)
The extent of the navigable coastal areas to which special provisions regarding the contribution in general average, etc. apply under the proviso to Article 872 (2) of the Act shall be the waters inside of the line that links the northern coast of Bulgapcheon-gu, Yeonggwang-gun to Gaeumdo also in Yeonggwang-gun; Jaewondo, Bigeumdo, and Sindo in Sinan-gun; Gasado and Jindo in Jindo-gun; Bogildo, Jajido, and Cheongsando in Wando-gun; and Chodo and Sorido in Yeosu-si, Jollanam-do; and then to Geojedo in Geoje-gun, Gyeongsangnam-do; and finally Yeongdo and Seungdumal in Busan Metropolitan City.
PART V CARRIAGE BY AIR
 Article 47 (Scope of Ultra-light Planes)
"Ultra-light planes as prescribed by Presidential Decree" in the proviso to Article 896 of the Act means ultra-light planes as defined in subparagraph 3 of Article 2 of the Aviation Safety Act. <Amended by Presidential Decree No. 27971, Mar. 29, 2017>
 Article 48 (Scope of Aircraft Excluded from Application Mutatis Mutandis of Provisions for Carriage by Air)
"Cases prescribed by Presidential Decree" in the proviso to Article 897 of the Act means where a State-owned or public airplane falls within any of the following categories: <Amended by Presidential Decree No. 27971, Mar. 29, 2017>
1. An airplane for military forces, police, or customs;
2. An airplane used for a purpose specified in any item of subparagraph 1 of Article 2 of the Aviation Safety Act;
3. Any other airplane not used for profit-making, but for actual public use, such as an airplane for emergency or for human rescue.
 Article 49 (Advance Payments, etc. for Aircraft Accidents)
(1) The amount of an advance payment that a carrier shall pay in accordance with the former part of Article 906 (1) of the Act shall be determined as follows:
1. If a passenger dies: An amount equivalent to 16,000 units of account per person;
2. If a passenger sustains a bodily injury: The amount actually borne by the legitimate claimant under Article 906 (1) of the Act (hereafter referred to as "legitimate claimant" in this Article) or the legal guardian of the passenger under the Civil Act, of the expenses incurred in the medical treatment of the bodily injury, whatsoever such expenses are called, including examination, checkup, provision of medicine and materials for treatment, operations, surgery, and other treatment, preventive measures, rehabilitation, hospitalization, nursing, and transfer, within 8,000 units of account per person.
(2) When a legitimate claimant intends to claim an advance payment in accordance with the former part of Article 906 (1) of the Act, he/she shall file a claim in writing or by electronic document, clearly stating his/her intention to claim the advance payment from the carrier and the amount of claim, along with the following documents:
1. A transcript of the relevant family relation register or a document proving that the claimant has a legitimate claim under a relevant Act;
2. A document proving that expenses incurred in medical treatment of an injury have been actually paid, if the relevant passenger sustained a bodily injury.
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on April 15, 2012.
Article 2 (Applicability to Requirements and Procedure for Issuance of Participating Bonds, etc.)
The amended provisions of Articles 21 through 25 shall apply where participating bonds, exchangeable bonds, redeemable bonds, or derivative-linked bonds are issued in accordance with a resolution adopted at a directors' meeting on or after the date this Decree enters into force.
Article 3 (Applicability to Stock Options)
The amended provisions of Article 30 (5) shall apply where stock options are granted in accordance with a resolution adopted at a general meeting of shareholders or at a directors' meeting on or after the date this Decree enters into force.
Article 4 (Applicability to Grounds for Disqualification of Outside Directors)
If an outside director elected in accordance with the former provisions fails to meet the requirements of the amended provisions of Article 34 (4) and (5) when this Decree enters into force, an outside director shall be elected at the first general meeting of shareholders held on or after the date this Decree enters into force, so as to meet the requirements prescribed in the amended provisions of Article 34 (4) and (5).
Article 5 (Special Provisions concerning Application of Compliance Guidelines and Compliance Officer System)
Notwithstanding the amended provisions of Article 39, the expression "500 billion won" in the aforesaid Article shall be construed as "one trillion won" during the period from the enforcement date of this Decree until December 31, 2013.
Article 6 (Transitional Measure concerning Unrealized Profits)
If retained earnings accrued up until the business year in which this Decree enters into force have already been reflected by the company as unrealized profits, such unrealized profits shall not be deemed included in the unrealized profits under the amended provisions of Article 19.
Article 7 (Transitional Measure concerning Credit Extension to Persons Specially Related to Major Corporate Shareholders)
Notwithstanding the amended provisions of Article 35 (3) 2, credit extensions granted by a company to a person specially related to a major corporate shareholder under the former provisions before this Decree enters into force, shall be deemed credit extensions compliant with the amended provisions of the aforesaid subparagraph.
Article 8 Omitted.
Article 9 (Relationship to other Acts and Subordinate Statutes)
A citation of any provision of the former Enforcement Decree of the Commercial Act by any other Act or subordinate statute in force as at the time this Decree enters into force shall be deemed a citation of the relevant provision of this Decree in lieu of the former provision, if this Decree contains such equivalent relevant provision.
ADDENDA <Presidential Decree No. 24076, Aug. 31, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 2, 2012. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 24697, Aug. 27, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on August 29, 2013. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Presidential Decree No. 25214, Feb. 24, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Application of Offsetting of Unrealized Profits)
The amended provisions of Article 19 (2) shall apply where the distribution of dividends is determined by a resolution adopted at a general meeting of shareholders or at a directors' meeting on or after the date this Decree enters into force.
ADDENDA <Presidential Decree No. 27205, May 31, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 30, 2016. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 27261, Jun. 28, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2016.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 27556, Oct. 25, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on December 1, 2016.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 27971, Mar. 29, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 30, 2017. (Proviso Omitted.)
Articles 2 through 11 Omitted.
ADDENDA <Presidential Decree No. 28211, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended parts of Presidential Decrees amended by Article 8 of the Addenda, which were promulgated before this Decree enters into force but the enforcement dates of which have not yet arrived, shall enter into force on the enforcement dates of the respective Presidential Decrees.
Articles 2 through 8 Omitted.