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ENFORCEMENT DECREE OF THE SUPPORT FOR SMALL AND MEDIUM ENTERPRISE ESTABLISHMENT ACT

Wholly Amended by Presidential Decree No. 20262, Sep. 10, 2007

Amended by Presidential Decree No. 20331, Oct. 23, 2007

Presidential Decree No. 20388, Nov. 16, 2007

Presidential Decree No. 20728, Feb. 29, 2008

Presidential Decree No. 20780, May 9, 2008

Presidential Decree No. 20947, Jul. 29, 2008

Presidential Decree No. 21506, May 28, 2009

Presidential Decree No. 21590, jun. 30, 2009

Presidential Decree No. 21641, Jul. 27, 2009

Presidential Decree No. 21835, Nov. 20, 2009

Presidential Decree No. 22131, Apr. 20, 2010

Presidential Decree No. 22493, Nov. 15, 2010

Presidential Decree No. 22519, Dec. 9, 2010

Presidential Decree No. 22870, Apr. 5, 2011

Presidential Decree No. 22966, jun. 8, 2011

Presidential Decree No. 22977, jun. 24, 2011

Presidential Decree No. 23644, Feb. 29, 2012

Presidential Decree No. 24076, Aug. 31, 2012

Presidential Decree No. 24317, Jan. 16, 2013

Presidential Decree No. 24432, Mar. 23, 2013

Presidential Decree No. 24638, jun. 28, 2013

Presidential Decree No. 25050, Dec. 30, 2013

Presidential Decree No. 25079, Jan. 14, 2014

Presidential Decree No. 25807, Dec. 3, 2014

Presidential Decree No. 25945, Dec. 30, 2014

Presidential Decree No. 26181, Mar. 31, 2015

Presidential Decree No. 26222, May 1, 2015

Presidential Decree No. 26600, Oct. 23, 2015

Presidential Decree No. 26804, Dec. 30, 2015

Presidential Decree No. 26905, Jan. 19, 2016

Presidential Decree No. 27205, May 31, 2016

Presidential Decree No. 27407, Jul. 28, 2016

Presidential Decree No. 27414, Jul. 28, 2016

Presidential Decree No. 27632, Nov. 29, 2016

Presidential Decree No. 27751, Dec. 30, 2016

Presidential Decree No. 28213, Jul. 26, 2017

Presidential Decree No. 28380, Oct. 17, 2017

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to provide for the matters delegated by the Support for Small and Medium Enterprise Establishment Act and matters necessary for the enforcement of the Act.
 Article 2 (Scope of Business Start-up)
(1) "Business start-up" defined in subparagraph 1 of Article 2 of the Support for Small and Medium Enterprise Establishment Act (hereinafter referred to as the "Act") means establishing a new small and medium enterprise and commencing its business operations, excluding the following cases: <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
1. Where a person succeeds to a business from a third party and continues the same type of business: Provided, That cases where an executive officer or employee of an enterprise or any other person commences business operations of a division spun off from the enterprise shall be excluded herefrom, if the criteria prescribed by Ordinance of the Ministry of SMEs and Startups are met in such cases;
2. Where the company form of a small and medium enterprise operated by a sole proprietor is changed through conversion into a corporation, reorganization of the corporation, etc., and the small and medium enterprise continues the same type of business;
3. Where a person commences another business after closing a business but continues the same type of business.
(2) The scope of the same type of business prescribed in paragraph (1) shall be based on the relevant subgroup according to the Korea Standard Industrial Classification, prescribed and publicly notified by the Commissioner of the Statistics Korea pursuant to Article 22 (1) of the Statistics Act (hereinafter referred to as the "Korea Standard Industrial Classification"). If a person continues to engage in a business after adding another type of business to the existing type of business, the person shall be deemed to continue the same type of business, only if the turnover of the added type of business is less than 50/100 of gross turnover. <Amended by Presidential Decree No. 20331, Oct. 23, 2007>
(3) The turnover of the added type of business or gross turnover in the latter part of paragraph (2), means the turnover or gross turnover for the two quarters immediately subsequent to the quarter in which another type of business is added.
 Article 2-2 (Scope of Business Recommencement)
Business recommencement prescribed in subparagraph 1-2 of Article 2 of the Act, means where a person closes a small and medium enterprise due to default on payment, bankruptcy, or any similar event and establishes a new small and medium enterprise subsequently.
[This Article Newly Inserted by Presidential Decree No. 27407, Jul. 28, 2016]
 Article 3 (Commencement Date of Business Operations)
The commencement date of business prescribed in subparagraph 2, 2-2, or 2-3 of Article 2 of the Act, means either of the following dates: <Amended by Presidential Decree No. 24638, Jun. 28, 2013; Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 27632, Nov. 29, 2016>
1. The date of registration for incorporation of the corporation, if the business starter or he/she who recommences business is a corporation;
2. The commencement date of business prescribed in Article 8 (1) of the Value-Added Tax Act, if the business starter or he/she who recommences business is an individual: Provided, That it shall be the registration date of the business operator prescribed in Article 8 (1) of the Value-Added Tax Act, if a person commences business operations with approval of the relevant business plan prescribed in Article 33 of the Act.
 Article 4 (Types of Business Excluded from Scope of Business Start-up)
(1) "Types of business specified by Presidential Decree" in the proviso to subparagraph 1 of Article 3 of the Act, means the types of business which meet each of the following criteria. The types of business in such cases shall be classified according to the Korea Standard Industrial Classification: <Newly Inserted by Presidential Decree No. 27632, Nov. 29, 2016>
1. The relevant business shall be a finance business or an insurance business that engages in the business of rendering financial services through information and communications technology as its main business (referring to the main business defined in Article 4 of the Enforcement Decree of the Framework Act on Small and Medium Enterprises);
2. The relevant business shall not engage in any credit finance business other than those specified above as its main business.
(2) "Types of business specified by Presidential Decree" in subparagraph 3 of Article 3 of the Act means any of the following types of business. The types of business in such cases shall be classified according to the Korea Standard Industrial Classification: <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 22966, Jun. 8, 2011; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Lodging business or restaurant business (excluding a hotel business; business operating resort condominiums; business operating other tourist lodging facilities, and a restaurant business with at least 20 full-time employees in the form of a corporation);
2. Business operating a dance hall;
3. Business operating golf courses or a ski resort;
4. Other business of gambling or betting;
5. Other personal service business (excluding any personal service business other than those classified as miscellaneous personal service businesses);
6. Other types of non-manufacturing business specified by Ordinance of the Ministry of SMEs and Startups.
 Article 5 (Formulation, etc. of Plans for Supporting Business Start-ups)
(1) The plan for supporting the establishment of new small and medium enterprises prescribed in Article 4 (1) of the Act, shall include the following matters: <Amended by Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 21835, Nov. 20, 2009>
1. Matters concerning support to be provided to business starters;
2. Fostering institutions and organizations related to support for business start-ups;
3. Operating funds for supporting the establishment of new small and medium enterprises, which shall be provided from the Fund for Establishment and Promotion of Small and Medium Enterprises prescribed in Article 63 of the Small and Medium Enterprises Promotion Act;
4. Other matters necessary for supporting business start-ups.
(2) "Persons who engage in the business of supporting business start-ups, as prescribed by Presidential Decree" in Article 4 (2) of the Act means the following persons: <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. The operator of a business incubator prescribed in Article 6 (1) of the Act;
2. A graduate school of entrepreneurship prescribed in Article 8 (1) of the Act;
3. An investment company for establishing small and medium enterprises;
4. An investment association for establishing small and medium enterprises;
5. A small and medium enterprise consulting company;
6. An organization exclusively dedicated to promoting business start-ups prescribed in Article 39 of the Act;
7. Other business entities who meet the criteria publicly announced by the Minister of SMEs and Startups, among the persons who engage in projects for supporting business start-ups, including holding classes for business start-ups and providing information on business start-ups.
 Article 5-2 (Procedures, etc. for Funding or Subsidizing Projects for Promoting Business Start-ups)
(1) The Minister of SMEs and Startups shall formulate and publicly announce a plan for funding or subsidizing the projects for promoting business start-up prescribed in Article 4-2 (1) of the Act, including the following matters: <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
1. Scope of projects eligible for funding or subsidization;
2. Qualifications for applying for fund contribution or subsidization (hereafter referred to as "contributed or subsidized fund" in this Article) and the procedures and methods for applying for such funding;
3. The amount of contributed or subsidized funds;
4. Other matters that the Minister of SMEs and Startups deems necessary for funding or subsidization.
(2) When the Minister of SMEs and Startups intends to contribute a fund or grant a subsidy to a university, college, research institute, public institution, organization related to business start-up, small and medium enterprise, or intending entrepreneur pursuant to Article 4-2 (3) of the Act, he/she shall conclude an agreement, including the following matters, with a person who performs the relevant project: <Amended by Presidential Decree No. 26222, May 1, 2015; Presidential Decree No. 28213, Jul. 26, 2017>
1. Details of the project;
2. The purpose of use of the fund contributed or subsidized and the plan for management of the fund;
3. Utilization of outcomes of the project;
4. Provisions regarding the amendment of the agreement;
5. Other matters that the Minister of SMEs and Startups deems necessary for implementing the project.
(3) The Minister of SMEs and Startups may pay a contributed or subsidized fund prescribed in paragraph (2) in a lump sum or in installments, considering details of the project, the timing for commencing the project, etc. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
(4) The person to whom a contributed or subsidized fund is paid under paragraph (3) shall open a separate bank account for managing the fund and shall use the contributed or subsidized fund only for the purpose stipulated in the relevant agreement.
[This Article Newly Inserted by Presidential Decree No. 22519, Dec. 9, 2010]
 Article 5-3 (Projects for Promoting Business Start-ups)
"Other projects prescribed by Presidential Decree, such as business start-up training and expansion of the infrastructure for business start-up" in Article 4-2 (1) 4 of the Act means the following projects: <Amended by Presidential Decree No. 25807, Dec. 3, 2014>
1. Education of intending entrepreneurs in business start-ups;
2. Provision of information on business start-ups;
3. Provision of space for business start-ups;
4. Assistance in making prototypes;
5. Assistance in developing markets for business starters;
6. Operation of an information system for business start-up.
[This Article Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014]
 Article 5-4 (Scope of Intending Young Entrepreneurs Eligible for Preferable Treatment in Implementing Projects for Promotion of Business Start-ups)
"Aspiring or actual young business starters prescribed by Presidential Decree" in Article 4-2 (2) of the Act means intending entrepreneurs or business starters not older than 39 years.
[This Article Newly Inserted by Presidential Decree No. 26222, May 1, 2015]
 Article 6 (Designation of Operators of Business Incubators)
(1) "Professional specified by Presidential Decree" in Article 6 (1) 2 of the Act means any of the professionals listed in attached Table 1.
(2) Any person who wishes to be designated as the operator of a business incubator shall file an application for designation with the Minister of SMEs and Startups, along with the documents specified by Ordinance of the Ministry of SMEs and Startups. The same procedure shall also apply where any change occurs in regard to any of the facts relevant to the designation. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 7 (Exemption from Rent for State-Owned Property)
(1) "Amount specified by Presidential Decree" in Article 6 (3) of the Act means the amount determined by multiplying the property value calculated in accordance with Article 29 (2) of the Enforcement Decree of the State Property Act, by 1/100, also calculable monthly. <Amended by Presidential Decree No. 25079, Jan. 14, 2014>
(2) If annual rent calculated under paragraph (1) is increased by at least ten percent of the rent for the preceding year, where the same tenant (referring to a person who is admitted to a business incubator; hereinafter the same shall apply) rents the same State-owned property for at least two years consecutively, the rent shall be determined by the amount calculated in accordance with Article 31 of the Enforcement Decree of the State Property Act. <Amended by Presidential Decree No. 21641, Jul. 27, 2009; Presidential Decree No. 25079, Jan. 14, 2014>
 Article 7-2 (Exemption from Rent for Public Property)
(1) Annual rent for public property prescribed in Article 6 (5) of the Act shall be determined by multiplying the assessed value of the relevant property prescribed in Article 14 (1) of the Enforcement Decree of the Public Property and Commodity Management Act by 1/100, and it shall be calculable monthly.
(2) If annual rent calculated under paragraph (1) is increased by at least ten percent of the rent for the preceding year, where the same tenant rents the same State-owned property for at least two years consecutively, the rent shall be determined by the amount calculated in accordance with Article 16 of the Enforcement Decree of the Public Property and Commodity Management Act.
[This Article Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014]
 Article 7-3 (Business Activities of Organizations Exclusively Dedicated to Support for Business Start-ups in Universities and Colleges)
An organization exclusively dedicated to support for business start-ups prescribed in Article 7-2 (1) of the Act (hereinafter referred to as "specialized business start-up support organization") shall conduct the following business activities:
1. Planning and coordinating support for business start-ups in the university or college;
2. Improving education in the spirit of challenge, creativity, competence for innovation, etc. (hereinafter referred to as "entrepreneurship") and start-up in the university or college;
3. Search for business starters and assistance in commercialization;
4. Managing organizations for supporting business start-ups, including business incubators in the university or college;
5. Assisting in investment in startup businesses in the university or college;
6. Subsidizing for laboratory factories prescribed in Article 2 (5) of the Act on Special Measures for the Promotion of Venture Businesses and for companies specialized in the start-up of new technology-based businesses prescribed in Article 2 (8) of the aforesaid Act;
7. Collecting and providing information about demand and activities for business start-ups and advertising;
8. Educating and training staff members in charge of business affairs related to programs for supporting business start-ups in the relevant university or college;
9. Linking and coordinating programs for supporting business start-ups between universities and colleges.
[This Article Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014]
 Article 8 (Preferential Subsidization of Funds)
In order to be eligible for preferential subsidization from the Small and Medium Business Establishment and Promotion Fund prescribed in Article 63 of the Small and Medium Enterprises Promotion Act, a person shall be an investment company for the establishment of small and medium enterprises who has invested at least 50/100 of its paid-in capital or its debt-to-equity ratio does not exceed the standard rate determined and publicly announced by the Minister of SMEs and Startups or a small and medium enterprise establishment investment association organized by such investment company for the establishment of small and medium enterprises. <Amended by Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 21835, Nov. 20, 2009; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 8-2 (Formation of Policy Council)
(1) The Business Startup Policy Council prescribed in Article 9-2 (1) of the Act (hereinafter referred to as "Policy Council") shall be comprised of not more than 15 members, including one chairperson.
(2) The Deputy Minister of SMEs and Startups shall serve as the chairperson of the Policy Council. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
(3) Members of the Policy Council shall be comprised of the following persons: <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
1. One public official appointed by the head of each government agency to which the public official belongs, from among public officials who belong to the Senior Executive Service of the Ministry of Strategy and Finance; the Ministry of Science and ICT; the Ministry of Culture, Sports and Tourism; the Ministry of Trade, Industry and Energy; the Ministry of Employment and Labor; the Ministry of SMEs and Startups; and the Financial Services Commission;
2. Persons commissioned by the Minister of SMEs and Startups from among executive officers and employees of institutions supporting business start-up.
(4) The Policy Council shall have one secretary, appointed by the Minister of SMEs and Startups from among public officials of the Ministry of SMEs and Startups. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 27407, Jul. 28, 2016]
 Article 8-3 (Functions of Policy Council)
The Policy Council shall discuss the following matters:
1. Formulation of plans for supporting business start-ups prescribed in Article 4 of the Act;
2. Implementation of projects for promoting business start-ups prescribed in Article 4-2 of the Act;
3. Support for business re-commencement prescribed in Article 4-3 of the Act;
4. Support for business start-ups of specialized local industry prescribed in Article 4-4 of the Act;
5. Provision of information about business start-ups prescribed in Article 5 of the Act;
6. Education in business start-ups prescribed in Article 7 of the Act;
7. Coordination of functions of ministries and government agencies related to the promotion of business start-ups and support for business re-commencement;
8. Other matters that the chairperson of the Policy Council refers to the Council for discussion as necessary for promoting business start-ups and supporting business re-commencement.
[This Article Newly Inserted by Presidential Decree No. 27407, Jul. 28, 2016]
 Article 8-4 (Operation of Policy Council)
(1) The chairperson of the Policy Council shall call meetings of the Policy Council and preside over the meetings.
(2) If the chairperson of the Policy Council is unable to perform his/her duties due to any extenuating circumstances, the committee member designated in advance by the chairperson of the Policy Council shall act on behalf of the chairperson.
(3) If necessary, the chairperson of the Policy Council may organize and operate an advisory group with persons who have abundant knowledge and experience in promoting business start-ups and support for business re-startup.
(4) Except as otherwise expressly provided for in this Decree, matters necessary for the operation of the Policy Council shall be determined by the chairperson of the Policy Council after resolution by the Policy Council thereon.
[This Article Newly Inserted by Presidential Decree No. 27407, Jul. 28, 2016]
CHAPTER II INVESTMENT COMPANIES FOR ESTABLISHMENT OF SMALL AND MEDIUM ENTERPRISES
 Article 9 (Criteria for Registration of Investment Companies for the Establishment of Small and Medium Enterprises)
(1) “Criteria prescribed by Presidential Decree" in Article 10 (2) 1 of the Act means the following criteria: <Amended by Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 28380, Oct. 17, 2017>
1. The paid-in capital shall be at least two billion won;
2. The borrowed loans shall be less than 20/100 of the paid-in capital.
(2) "Finance-related statues prescribed by Presidential Decree" in Article 10 (2) 2 (e) of the Act means the following Acts: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 20947, Jul. 29, 2008; Presidential Decree No. 27205, May 31, 2016; Presidential Decree No. 27414, Jul. 28, 2016>
1. The Act on the Structural Improvement of the Finance Industry;
2. The Banking Act;
4. through 7. Deleted; <by Presidential Decree No. 27414, Jul. 28, 2016>
(3) "Person prescribed, respectively, by Presidential Decree" in Article 10 (2) 2 (e) and (f) of the Act means any of the following persons:
1. A representative director;
2. An auditor;
3. A person who gives an instruction to commit an offence that will constitute the grounds for revoking registration.
(4) "Person prescribed by Presidential Decree" in Article 10 (2) 2 (g) of the Act means a person whose debts are overdue, without good cause, for at least three months after the agreed due date and exceed ten million won.
(5) "Investor prescribed by Presidential Decree" in Article 10 (2) 2 (h) of the Act means any of the following persons: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 20947, Jul. 29, 2008; Presidential Decree No. 27414, Jul. 28, 2016; Presidential Decree No. 27632, Nov. 29, 2016>
1. The principal where the principal and his/her related persons prescribed in Article 3 (1) of the Enforcement Decree of the Act on Corporate Governance of Financial Companies (hereinafter referred to as "related persons") own the greatest number of outstanding voting stocks, and the number of such stocks exceeds 10/100 of the total number of outstanding voting stocks;
2. A person who owns at least 30/100 of the total number of outstanding voting stocks on his/her account, regardless of in whose name the stocks are held;
3. A stockholder who exercises de facto control over essential matters regarding the management of the relevant investment company for the establishment of small and medium enterprises, including appointment and dismissal of executive officers.
(6) "Social credit as prescribed by Presidential Decree" in Article 10 (2) 2-2 of the Act means cases that meet all the following criteria: Provided, That cases where the Minister of SMEs and Startups deems that the degree of the relevant violation is minor shall be excluded herefrom: <Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014; Presidential Decree No. 28213, Jul. 26, 2017>
1. The stockholder shall not have any criminal record of a fine or heavier punishment for a violation of the Act, any of the finance-related statutes specified in paragraph (2), the Monopoly Regulation and Fair Trade Act, or the Punishment of Tax Evaders Act during the latest three years: Provided, That excluded herefrom are any cases where the shareholder was punished under Article 49 of the Act or joint penalty provisions of any other relevant Act;
2. The stockholder shall not have any record of breaching sound practices in credit transactions by default on debts, etc. during the latest three years;
3. The stockholder shall not have been designated as an insolvent financial institution under the Act on the Structural Improvement of the Financial Industry nor shall have any permission, authorization, or registration for business revoked under the Act or any of the finance-related statutes specified in paragraph (2).
(7) The standards for full-time specialized human resources and facilities with which an investment company for the establishment of small and medium enterprises shall be equipped in accordance with Article 10 (2) 3 of the Act shall be as follows: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 21835, Nov. 20, 2009; Presidential Decree No. 22977, Jun. 24, 2011; Presidential Decree No. 25079, Jan. 14, 2014; Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. At least two experts who fall within any of the following categories: Provided, That a person who falls under Article 10 (2) 2 (f) or (i) of the Act shall be excluded herefrom, for whom three years (or five years from the cancellation date of registration, if the period exceeds five years from the cancellation date of registration) have not yet passed since the date the person's registration had been revoked or the date the person was notified of the ground for such revocation:
(a) An attorney-at-law prescribed in the Attorney-at-Law Act, a certified public accountant prescribed in the Certified Public Accountant Act, or a patent attorney prescribed in the Patent Attorney Act;
(b) A person who has been qualified as a professional engineer under the National Technical Qualifications Act or a person who holds a doctorate in science, engineering, economics, or commerce;
(c) The founder of a corporation that was or is listed on the securities market prescribed in Article 8-2 (4) 1 of the Financial Investment Services and Capital Markets Act or the representative director of such corporation as at the time the corporation is listed on the securities market;
(d) A business consultant or technical consultant prescribed in Article 50 of the Small and Medium Enterprises Promotion Act or a holder of a master's degree in science, engineering, economics, or commerce, with at least three years' relevant work experience;
(e) A holder of a bachelor's degree or any higher degree in science or engineering, who has engaged in a relevant job in a national or public research institute, a Government-funded research institute under the Act on the Establishment, Operation and Fostering of Government-Funded Research Institutes, Etc. or the Act on the Establishment, Operation and Fostering of Government-Funded Science and Technology Research Institutes, etc., or a research institute annexed to a company prescribed in Article 14 (1) 2 of the Basic Research Promotion and Technology Development Support Act for at least four years;
(f) A holder of a bachelor's degree, who has engaged in a job for examination of investments (excluding a job for examination of loans) for at least three years in an institution subject to inspection prescribed in Article 38 of the Act on the Establishment, etc. of Financial Services Commission (excluding a company engaging in a new technology venture business prescribed in Article 41 of the Specialized Credit Finance Business Act) or a foreign company (including its affiliates and branches) engaging in a business similar to the business of an investment company for the establishment of small and medium enterprises;
(g) A person who has engaged in a job for examination of investments for at least two years in an investment company for the establishment of small and medium enterprises, a specialized corporate restructuring company prescribed in Article 14 of the Industrial Development Act (referring to the Industrial Development Act before being wholly amended by Act No. 9584) (hereinafter referred to as "specialized corporate restructuring company"), a company engaging in a new technology venture business prescribed in Article 41 of the Specialized Credit Finance Business Act, a limited company prescribed in Article 4-3 (1) 3 of the Act on Special Measures for the Promotion of Venture Businesses;
(h) A person who fails to meet the criteria for work experience, among the persons who meet the criteria for qualification and work experience under item (d) through (f), or fails to meet the criteria for work experience under item (f) but has completed the educational course recognized by the Minister of SMEs and Startups for training specialized human resources for investment companies for the establishment of small and medium enterprises;
2. An office that meets the standards determined by the Minister of SMEs and Startups, including securing of exclusive premises for consulting on investment.
 Article 10 (Restrictions on Activities of Investment Companies for Establishment of Small and Medium Enterprises)
(1) "As prescribed by Presidential Decree" in the proviso to the main sentence of Article 15 (1) of the Act means any of the following: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 20947, Jul. 29, 2008; Presidential Decree No. 22966, Jun. 8, 2011; Presidential Decree No. 26181, Mar. 31, 2015; Presidential Decree No. 26600, Oct. 23, 2015; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017; Presidential Decree No. 28380, Oct. 17, 2017>
1. Where stocks are acquired in the securities market referred to in Article 8-2 (4) 1 of the Financial Investment Services and Capital Markets Act as recognized and publicly announced by the Minister of SMEs and Startups;
2. Where the company participates in the relevant activity as an executive member or an executive employee of any of the following associations or companies:
(a) A corporate restructuring association prescribed in Article 15 of the Industrial Development Act (referring to the Industrial Development Act before being wholly amended by Act No. 9584) (hereinafter referred to as "corporate restructuring association");
(b) A private equity fund prescribed in Article 9 (19) 1 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "private equity fund");
(c) An association or a company recognized and publicly notified by the Minister of SMEs and Startups as an association or a company, the business of which is suitable for a small and medium enterprise establishment investment association or an investment company for the establishment of small and medium enterprises, among other associations or companies established under any other statute;
3. Where an investment company for the establishment of small and medium enterprises acquires stocks of another investment company for the establishment of small and medium enterprises for the purpose of acquisition and merger: Provided, That, if it does not succeed in acquisition and merger within six months from the date of initial acquisition of stocks, it shall dispose of the acquired stocks within nine months from the date of initial acquisition of stocks;
4. In cases falling under Article 15 (1) 1 of the Act, where an investment company for the establishment of small and medium enterprises invests in any type of business recognized as needing support for fostering small and medium enterprises and publicly notified by the Minister of SMEs and Startups, from among the types of business referred to in the main sentence of subparagraph 1 and subparagraphs 2 and 3 of Article 3 of the Act;
5. In cases falling under Article 15 (1) 2 of the Act, where an investment company for the establishment of small and medium enterprises invests in any of the projects recognized and publicly notified by the Minister of SMEs and Startups, including cultural contents projects, through a company specialized in cultural industries prescribed in Article 43 of the Framework Act on the Promotion of Cultural Industries (hereafter referred to as "company specialized in cultural industries" in this Article): Provided, That excluded herefrom shall be an investment company for the establishment of small and medium enterprises which belongs to an enterprise group subject to limitations on mutual investment under Article 9 of the Monopoly Regulation and Fair Trade Act, if it invests in a company specialized in the cultural industries by acquiring or owning stocks or equity shares of the company specialized in the cultural industries which belongs to the same enterprise group subject to limitations on mutual investment.
(2) "Financial institution specified by Presidential Decree" in Article 15 (1) 3 of the Act means any of the following persons: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 26600, Oct. 23, 2015; Presidential Decree No. 27632, Nov. 29, 2016>
1. A financial institution defined in subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality;
2. A specialized corporate restructuring company or a corporate restructuring association;
3. A private equity fund.
(3) "Real property for business purposes within the extent prescribed by Presidential Decree" in Article 15 (1) 4 of the Act means any of the following: <Amended by Presidential Decree No. 25079, Jan. 14, 2014; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. A business incubator established directly by the relevant investment company for the establishment of small and medium enterprises;
2. The office referred to in Article 9 (7) 2 (including branches);
3. Other real property recognized by the Minister of SMEs and Startups as directly necessary for the projects referred to in Article 10 (1) 5 of the Act.
(4) "Activities prescribed by Presidential Decree" in Article 15 (1) 5 of the Act means the following activities: <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 22131, Apr. 20, 2010; Presidential Decree No. 22493, Nov. 15, 2010; Presidential Decree No. 22966, Jun. 8, 2011; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 25079, Jan. 14, 2014; Presidential Decree No. 26600, Oct. 23, 2015; Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 27632, Nov. 29, 2016; ; Presidential Decree No. 28213, Jul. 26, 2017; Presidential Decree No. 28380, Oct. 17, 2017>
1. Transactions with any of the following persons:
(a) A small and medium enterprise establishment investment association organized by the relevant investment company for establishing small and medium enterprises: Provided, That excluded herefrom shall be transactions that the investment company for the establishment of small and medium enterprises conduct due to dissolution of the small and medium enterprise establishment investment association or any of the events recognized as extenuating circumstances by the Minister of SMEs and Startups;
(b) A person related to the relevant investment company for the establishment of small and medium enterprises: Provided, That the foregoing shall not apply where the investment company for the establishment of small and medium enterprises, invests for the purpose of acquiring business control prescribed in subparagraph 6;
(c) A major stockholder of the relevant investment company for the establishment of small and medium enterprises (referring to a stockholder who owns at least 10/100 of the total number of outstanding voting stocks, in whosever name the stocks may be held, on his/her account or a stockholder who exercises de facto control over essential matters regarding the management of the relevant investment company for the establishment of small and medium enterprises, including appointment and dismissal of executive officers) or any person related to such stockholder: Provided, That excluded herefrom are subsidiaries and invested companies (referring to the persons defined as a subsidiary or invested company by any of the following statutes but excluding subsidiaries or invested companies of any of related persons of the person who exercises de facto control over essential matters regarding the management of a major stockholder who falls within any of the following categories) of a major stockholder who falls within any of the following categories, among persons related to a major stockholder:
(ii) A company specialized in the start-up of new technology-based businesses prescribed in Article 11-2 of the Act on Special Measures for the Promotion of Venture Businesses;
(d) A major investor in a small and medium enterprise establishment investment association organized by the relevant investment company for the establishment of small and medium enterprises (referring to the principal investor, where the principal investor and his/her related persons own at least 10/100 of equity shares in the total amount of investment, in whosever name the equity shares may be held, on his/her account; hereafter in this item, the same shall apply) and any person related thereto: Provided, That the following cases shall be excluded herefrom:
(i) Where the investment company for the establishment of small and medium enterprises sells any asset owned by it, including stocks, to an association organized mainly for the purpose of purchasing assets, including stocks owned by investment companies for the establishment of small and medium enterprises, etc. in the Korea Venture Fund under Article 4-3 of the Act on Special Measures for the Promotion of Venture Businesses (hereinafter referred to as the "Korea Venture Fund"), which is a person related to major investors of the small and medium enterprise establishment investment association organized by the company itself;
(ii) Where the investment company for the establishment of small and medium enterprises engages in a transaction with any other small and medium enterprise establishment investment association, which is a person related to any of the following persons, among major investors of the small and medium enterprise establishment investment association organized by the company itself or with the Korea Venture Fund:
a) Fund of funds for investment in small and medium enterprises prescribed in Article 4-2 (1) of the Act on Special Measures for the Promotion of Venture Businesses;
b) A person who manages and operates any of the funds listed in attached Table 2 of the National Finance Act, as a fund managing entity prescribed in Article 8 (1) of the said Act;
c) A bank prescribed in the Banking Act (including domestic branches, agents, and offices of a foreign bank authorized under Article 58 (1) of the said Act);
d) The Korea Development Bank prescribed in the Korea Development Bank Act;
e) The Industrial Bank of Korea prescribed in the Industrial Bank of Korea Act;
f) The National Agricultural Cooperative Federation prescribed in the Agricultural Cooperatives Act;
g) A mutual savings bank prescribed in the Mutual Savings Banks Act;
h) An insurance company prescribed in the Insurance Business Act;
i) A post office prescribed in the Postal Savings and Insurance Act;
j) A corporation that provides mutual aid services prescribed in an Act;
k) Deleted; <by Presidential Decree No. 25945, Dec. 30, 2014>
(iii) Where the investment company for the establishment of small and medium enterprises conducts a transaction to dissolve a small and medium enterprise establishment investment association organized by the company or to recover investment shares not saleable to a third party;
(iv) Where the sound management of assets of a small and medium enterprise establishment investment association organized by the investment company for the establishment of small and medium enterprises, risks being undermined and the company conducts a transaction with consent of all members of the small and medium enterprise establishment investment association thereon;
(v) Where the investment company for the establishment of small and medium enterprises conducts a transaction with a subsidiary or an invested company of a major investor who falls within any of the following categories (referring to the persons as defined as subsidiaries or invested companies by any of the following statutes but excluding subsidiaries or invested companies of any of related persons of the person who exercises de facto control over essential matters regarding the management of a major stockholder who falls within any of the following categories), among persons related to a major stockholder of the small and medium enterprise establishment investment association organized by the company itself:
b) A company specialized in new technology-based businesses start-ups prescribed in Article 11-2 of the Act on Special Measures for the Promotion of Venture Businesses;
2. Transactions that a small and medium enterprise establishment investment association organized by the relevant investment company for the establishment of small and medium enterprises conducts with any of the following associations or companies: Provided, That this subparagraph shall apply only to the transactions between the relevant investment company for the establishment of small and medium enterprises and an executive member of such association or the association or company that is an executive member of such association:
(a) A small and medium enterprise establishment investment association;
(b) The Korea Venture Fund;
(c) A corporate restructuring association;
(d) A private equity fund;
3. Provision of any asset of the investment company for the establishment of small and medium enterprises as security or guaranteeing of payment of debts for another person;
4. A loan lent to an executive officer or employee of the relevant investment company for the establishment of small and medium enterprises in excess of the amount specified by Ordinance of the Ministry of SMEs and Startups;
5. Acquisition of stocks for a third party in the name of the investment company for the establishment of small and medium enterprises or acting as a broker for funding;
6. Investment for the purpose of acquiring business control: Provided, That excluded herefrom shall be cases that meet each of the following criteria:
(a) The investment company for the establishment of small and medium enterprises shall hold stocks or equity shares of the relevant small and medium enterprise for six months from the date of acquisition of business control, as prescribed by Ordinance of the Ministry of SMEs and Startups (such period may be shortened, if the Minister of SMEs and Startups concludes that the holding of such stocks or equity shares is obviously likely to undermine the interest of the investment company for the establishment of small and medium enterprises or the small and medium enterprise establishment investment association);
(b) The investment company for the establishment of small and medium enterprises shall sell all stocks or equity shares of the relevant small and medium enterprise within seven years from the date of acquisition of business control, as prescribed by Ordinance of the Ministry of SMEs and Startups (such period may be extended by not more than one year, if the sale agreement is delayed or the Minister of SMEs and Startups finds that a ground exists to believe that it is impracticable to sell the relevant stocks or equity shares);
7. Receipt of funds through any transaction other than a normal transaction accompanied by investment, such as borrowing a loan from a company in which the investment company for the establishment of small and medium enterprises has invested or selling an asset;
8. Other activities specified by Ordinance of the Ministry of SMEs and Startups as those for investment for an improper purpose.
(5) "Transactions" prescribed in paragraph (4) 1 or 2 means the following activities: <Newly Inserted by Presidential Decree No. 22131, Apr. 20, 2010; Presidential Decree No. 28213, Jul. 26, 2017>
1. Investing in a person referred to in any item of paragraph (4) 1 or 2 or acquiring securities issued by such person;
2. Providing credit to a person referred to in any item of paragraph (4) 1 or 2 (referring to the lending of property with economic value, such as money and securities or the purchase of securities for financial support);
3. Other direct or indirect transactions determined and publicly notified by the Minister of SMEs and Startups, as likely to undermine sound management of assets of the investment company for the establishment of small and medium enterprises and are accompanied by credit risk in transactions, among activities similar to those referred to in subparagraphs 1 and 2.
(6) "His/her specially related persons prescribed by Presidential Decree" in the main sentence of Article 15-2 (1) of the Act means specially related persons defined in Article 3 (1) of the Enforcement Decree of the Act on Corporate Governance of Financial Companies, of a major stockholder of an investment company for the establishment of small and medium enterprises. <Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014; Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 27632, Nov. 29, 2016>
 Article 11 (Ratio Mandatorily Invested by Investment Company for Establishment of Small and Medium Enterprises)
(1) "Ratio prescribed by Presidential Decree" in the main sentence of Article 16 (1) of the Act, means 40/100. <Amended by Presidential Decree No. 25079, Jan. 14, 2014>
(2) The ratio mandatorily invested under paragraph (1) shall be determined as follows:
1. Where capital after an increase, exceeds the paid-in capital as at registration, the ratio mandatorily invested for the increase shall be separately determined annually from the date of increase (or the date of residual increase, if the paid-in capital has been reduced after an increase and there is a residual increase after subtracting the decrease from the latest increase in sequence);
2. Where capital decreases and falls below the paid-in capital as at registration, the ratio mandatorily invested for the paid-in capital after the decrease shall be determined as on the date of registration.
(3) "At least the scale prescribed by Presidential Decree" in the proviso to Article 16 (1) of the Act means cases where the total amount of investments in a small and medium enterprise establishment investment association prescribed in Article 20 of the Act, is at least 200/100 of the paid-in capital of the investment company for the establishment of small and medium enterprises. <Amended by Presidential Decree No. 27632, Nov. 29, 2016>
 Article 12 (Limits on Overseas Investment of Investment Company for Establishment of Small and Medium Enterprises)
"Ratio specified by Presidential Decree" in Article 17 (2) of the Act means 40/100.
 Article 13 (Annual Reports, etc. of Investment Company for Establishment of Small and Medium Enterprises)
(1) Pursuant to Article 19 of the Act, an investment company for the establishment of small and medium enterprises shall submit the annual report to the Minister of SMEs and Startups within three months after each business year, along with a written audit opinion of the accounting firm prescribed in Article 23 of the Certified Public Accountant Act (hereinafter referred to as "accounting firm"). <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
(2) If the Minister of SMEs and Startups concludes, according to the findings of the review on an annual report submitted under paragraph (1), that it is necessary for promoting investment of the relevant investment company for the establishment of small and medium enterprises and for the improvement of its financial structure, he/she may require the company to offset reserves for losses on investments and loans against losses on investments with respect to unrecoverable invested assets or to write off unrecoverable invested assets as bad debts. <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
CHAPTER II-2 ACCELERATORS
 Article 13-2 (Criteria for Registration of Accelerators)
(1) "Amount specified by Presidential Decree" in Article 19-2 (2) 1 (a) of the Act means 100 million won.
(2) "Amount specified by Presidential Decree" in Article 19-2 (2) 1 (b) of the Act means 50 million won: Provided, That the amount for a specialized institution designated under Article 16-4 (3) of the Framework Act on Science and Technology shall be ten million won.
(3) "Finance-related Act specified by Presidential Decree" in Article 19-2 (2) 2 (e) of the Act means any of the following Acts:
1. The Act on the Structural Improvement of the Finance Industry;
14. The Banking Act;
(4) "Standards prescribed by Presidential Decree" in Article 19-2 (2) 4 of the Act means the following standards: <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
1. Standards for full-time specialized human resources: An accelerator shall have at least two experts who fall within any of the following categories:
(a) A person who has at least three years' work experience in the planning of business start-ups in any of the following companies or institutions:
(i) A business incubator;
(ii) An investment company for the establishment of small and medium enterprises;
(iii) An accelerator;
(iv) A specialized institution designated under Article 16-4 (3) of the Framework Act on Science and Technology;
(b) A person who has at least three years' work experience in the examination of investments in any of the following companies:
(i) An investment company for the establishment of small and medium enterprises;
(ii) A specialized corporate restructuring company;
(iii) A new technology venture business entity prescribed in subparagraph 14-3 of Article 2 of the The Specialized Credit Finance Business Act;
(d) A person who has at least three years' work experience as an executive member of a private investment association prescribed in Article 13 of the Act on Special Measures for the Promotion of Venture Businesses;
(e) A person who has at least three years' work experience as an executive officer of a company with annual average sales for the latest three business years, of at least ten billion won;
(f) A person who has work experience as an executive officer of a company in an initial public offering or the sale of the company at a price of at least five billion won;
(g) An attorney-at-law prescribed in the Attorney-at-Law Act;
(h) A certified public accountant prescribed in the Certified Public Accountant Act;
(i) A patent attorney prescribed in the Patent Attorney Act;
(j) A person qualified as a professional engineer prescribed in the National Technical Qualifications Act;
(k) A holder of a doctorate in science, engineering, economics, or commerce;
(l) Any other person who meets the qualifications specified by the Minister of SMEs and Startups;
2. Standards for facilities: An accelerator shall be equipped with all of the following facilities:
(a) Offices that business starters at an early stage require in conducting activities for business start-ups. Offices in such cases shall be those owned by the accelerator or the lease contract for such offices shall be maintained for the period of registration of the accelerator;
(b) Equipment for assisting in producing test products (limited to where assistance is rendered to business starters at an early stage who engaged in a manufacturing business falling within a section of the Korea Standard Industrial Classification).
[This Article Newly Inserted by Presidential Decree No. 27632, Nov. 29, 2016]
 Article 13-3 (Support for Business Starters at Early Stage)
(1) "Amount specified by Presidential Decree" in Article 19-3 (1) of the Act means ten million won.
(2) "Period specified by Presidential Decree" in the main sentence of Article 19-4 (1) of the Act means three months.
[This Article Newly Inserted by Presidential Decree No. 27632, Nov. 29, 2016]
CHAPTER III SMALL AND MEDIUM ENTERPRISE ESTABLISHMENT INVESTMENT ASSOCIATION
 Article 14 (Requirements and Procedures for Registration of Small and Medium Enterprise Establishment Investment Associations)
(1) A small and medium enterprise establishment investment association prescribed in Article 20 of the Act shall meet each of the following requirements: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 22131, Apr. 20, 2010; Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 27632, Nov. 29, 2016>
1. The total amount of investments shall be at least two billion won: Provided, That the amount of the initial investment shall be at least ten billion won, if the full amount of investments is invested in installments in accordance with Article 20 (5) of the Act;
2. Each proportion of investment shall be at least one million won;
3. The number of members with limited liability shall not exceed 49 persons. In such cases, if a collective investment scheme prescribed in Article 9 (18) of the Financial Investment Services and Capital Markets Act is in the form of an association, the collective investment scheme shall be deemed one member with limited liability, if it invests less than 10/100 in the relevant small and medium enterprise establishment investment association, while each member of the collective investment scheme shall be deemed one member with limited liability, if it invests at least 10/100;
4. The executive member's proportion of investment shall be at least 1/100 of the total amount of investment;
5. The duration of existence shall be at least five years.
(2) When an investment company for the establishment of small and medium enterprises intends to organize a small and medium enterprise establishment investment association, it shall submit an organization plan, stating the following matters, to the Minister of SMEs and Startups: <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Overview of business;
2. The total amount of investment, the amount of each proportion of investment, the timing and method for investment;
3. A plan for inviting members with limited liability;
4. A plan for the management and distribution of the small and medium enterprise establishment investment association;
5. Personal information of experts exclusively in charge of examination of investments by the small and medium enterprise establishment investment association (referring to names, resident registration numbers, personal history in brief, work experience in investment, etc.; hereinafter the same shall apply).
(3) When an investment company for the establishment of small and medium enterprises completes the organization of a small and medium enterprise establishment investment association, it shall file a registration application with the Minister of SMEs and Startups within seven days from the date of the general meeting of members, along with the following documents: <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 20947, Jul. 29, 2008; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Bylaws of the small and medium enterprise establishment investment association;
2. A list of members;
3. Documents certifying the amount to be invested by each member and the completion of investment;
4. Personal information of experts exclusively in charge of examination of investments by the small and medium enterprise establishment investment association;
5. A document certifying that the safekeeping of property of the small and medium enterprise establishment investment association is entrusted pursuant to Article 22 (1) 1 of the Act to a trust business entity prescribed in Article 8 (7) of the Financial Investment Services and Capital Markets Act or to a financial institution concurrently engaging in trust business.
 Article 15 (Keeping, etc. of Registers)
(1) The Minister of SMEs and Startups shall keep a register of each small and medium enterprise establishment investment association, as prescribed by Ordinance of the Ministry of SMEs and Startups, and shall record the following matters therein: <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. The name of the small and medium enterprise establishment investment association and the address of its office;
2. Names and addresses of executive members;
3. The amount of investment and the number of investment shares of each member;
4. The duration of existence of the association;
5. Personal information of experts exclusively in charge of examining investments by the small and medium enterprise establishment investment association
(2) If any change occurs in any of the matters specified in paragraph (1), the executive member of the small and medium enterprise establishment investment association shall file an application for the amendment of registration with the Minister of SMEs and Startups within seven days from the date of change, along with documents certifying such change. <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
(3) When the Minister of SMEs and Startups registers an applicant prescribed in paragraph (1) or (2), he/she shall issue a certified transcript to the applicant, as prescribed by Ordinance of the Ministry of SMEs and Startups. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
(4) The Minister of SMEs and Startups shall keep a register of each small and medium enterprise establishment investment association and shall make the register available to members of the association or the persons designated by any member of the association for perusal. <Amended by Presidential Decree No. 20780, May 9, 2008; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 16 (Ratio of Mandatory Investment by Small and Medium Enterprise Establishment Investment Associations)
(1) "Ratio prescribed by Presidential Decree" in the main sentence of, and the proviso to, Article 21 (3) of the Act means 40/100, respectively. <Amended by Presidential Decree No. 25079, Jan. 14, 2014>
(2) If the amount of capital becomes greater than the capital paid in as at the time of registration, the ratio of mandatory investment for the increase shall be calculated separately annually as at the date of increase for the purpose of determining the ratio of mandatory investment made under paragraph (1).
(3) Article 10 (1) 1 and (2) through (4) and Article 12 shall apply mutatis mutandis to the restrictions on activities of a small and medium enterprise establishment investment association and requirements for overseas investment. In such cases, "investment company for the establishment of small and medium enterprises" in Article 10 (4) 1 (a), (c), and (d) and Article 10 (4) 2 and 7 shall be construed as "executive member," respectively; and "investment company for the establishment of small and medium enterprises" in other provisions as "small and medium enterprise establishment investment association," respectively. <Amended by Presidential Decree No. 27632, Nov. 29, 2016>
[This Article Wholly Amended by Presidential Decree No. 20780, May 9, 2008]
 Article 17 (Annual Reports, etc. of Associations)
(1) Pursuant to Article 23 of the Act, executive members of a small and medium enterprise establishment investment association shall submit an annual report to the Minister of SMEs and Startups within three months after the end of each business year, along with the written auditor's opinion of an accounting firm. <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
(2) The Minister of SMEs and Startups may prescribe standard bylaws of small and medium enterprise establishment investment associations for efficient operation of small and medium enterprise establishment investment associations. <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 18 (Grounds, etc. for Dissolution)
(1) "Cause or event prescribed by Presidential Decree" in Article 25 (1) 5 of the Act means any of the following cases: <Amended by Presidential Decree No. 22131, Apr. 20, 2010; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Where all members of a small and medium enterprise establishment investment association agree that the association has attained the objectives of organization;
2. Where a small and medium enterprise establishment investment association has difficulties in continuing its business operations due to the revocation of registration of the investment company for the establishment of small and medium enterprises, which is its executive member, the bankruptcy of the company, or any similar event;
3. Where the Minister of SMEs and Startups deems it necessary for protecting members of a small and medium enterprise establishment investment association due to the impairment of assets of the association or the occurrence of any other event, and members who own a majority of all equity shares in the association attend the general meeting of members for dissolution and at least two-thirds of equity shares of the members present and at least one-third of all equity shares in the association consent to dissolution.
(2) A person who intends to continue the operation of a small and medium enterprise establishment investment association by inviting another person as an executive member pursuant to Article 25 (2) of the Act, shall file an application stating the following matters, with the Minister of SMEs and Startups, along with an explanatory statement on the reason why the person intends to avoid the dissolution of the association and written consents of all members with limited liability: <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. The name of the small and medium enterprise establishment investment association and the address of its office;
2. The name and address of the new executive member who will join the association and the name of its representative;
3. The amount of investment and the number of investment shares of each member.
(3) A person who files an application prescribed in paragraph (2) shall be deemed to have filed an application to amend registration prescribed in Article 15 (2).
(4) When a small and medium enterprise establishment investment association is dissolved, the executive member of the association shall notify the Minister of SMEs and Startups thereof within seven days. <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 19 (Methods, etc. for Calculation of Return on Investment)
(1) The return on investment for the payment of performance-based remunerations prescribed in Article 28 of the Act shall be determined by deducting the amount of investment and the operating expenses specified by the Minister of SMEs and Startups from the assessed value of assets of the association. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
(2) An executive member in receipt of performance-based remunerations according to the return on investment prescribed in Article 28 of the Act may pay a bonus to the executive officers and employees who have contributed to the accrued return on investment within the maximum of the amount that it receives as performance-based remunerations.
CHAPTER IV SMALL AND MEDIUM BUSINESS CONSULTING COMPANIES
 Article 20 (Requirements for Registration of Small and Medium Business Consulting Companies)
(1) "Aamount prescribed by Presidential Decree" in Article 31 (2) 1 of the Act means 50 million won.
(2) Specialized human resources and facilities with which a small and medium enterprise consulting company shall be equipped, shall be as follows: <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
1. At least two of the specialized human resources in attached Table 1 shall be full-time workers;
2. An office with the auxiliary facilities specified by Ordinance of the Ministry of SMEs and Startups.
(3) "Person prescribed by Presidential Decree" in Article 31 (2) 2 (e) of the Act means a person whose debts overdue for at least three months after the agreed due date, without just cause, exceed ten million won.
 Article 21 (Subsidization of Service Fees)
(1) In order to be eligible for subsidization of service fees prescribed in Article 32 of the Act, a person shall be a small and medium enterprise consulting company which does not concurrently operate an investment company for the establishment of small and medium enterprises, and the amount of the subsidy shall not exceed 80/100 of the relevant service fees. <Amended by Presidential Decree No. 27632, Nov. 29, 2016>
(2) A person who wishes to obtain a subsidy for service fees prescribed in Article 32 of the Act shall file an application for the subsidization of service fees with an institution or organization designated by the Minister of SMEs and Startups, along with the documents specified by Ordinance of the Ministry of SMEs and Startups. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
CHAPTER V PROCEDURES, ETC. FOR BUSINESS START-UP
 Article 22 (Approval of Business Plans)
(1) A business starter who wishes to obtain approval of a business plan prescribed in Article 33 (1) of the Act shall file an application for the approval of the business plan with the head of a Si/Gun/Gu (Gu means an autonomous Gu; hereinafter the same shall apply) having jurisdiction over the area in which he/she plans to build a factory, along with the documents specified by Ordinance of the Ministry of SMEs and Startups. The same procedure shall also apply where a person intends to obtain approval for the amendment of the business plan. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
(2) "Important matter prescribed by Presidential Decree" in the latter part of Article 33 (1) of the Act means any of the following matters: <Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014>
1. Business operator (limited to cases falling under the proviso to Article 37 (1) 2 of the Act);
2. Type of business (based on classification into classes according to the Korea Standard Industrial Classification);
3. Area of the site for the factory;
4. Building area of the factory (excluding cases where the area is changed within the maximum of the ratio of area of the existing factory prescribed in subparagraph 2 of Article 8 of the Industrial Cluster Development and Factory Establishment Act);
5. Area of auxiliary facilities (excluding cases where the area is changed within the maximum of the ratio of area of the existing factory prescribed in subparagraph 2 of Article 8 of the Industrial Cluster Development and Factory Establishment Act).
 Article 23 (Establishment of Council for Processing Civil Petitions on Business Start-ups)
(1) The Minister of SMEs and Startups may establish a council for processing civil petitions on business start-ups within a regional SMEs and Startups office for assistance in the approval of business plans prescribed in Article 33 of the Act and for consultation thereon. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
(2) Matters necessary for the organization of the council for processing civil petitions on business start-ups, the method of operating the council, etc. shall be prescribed by Ordinance of the Ministry of SMEs and Startups. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 24 (Guidelines on Processing Approval of Business Plans)
(1) The guidelines on processing approval of business plans prescribed in Article 33 (4) of the Act shall include guidelines on processing permission, authorization, licensing, approval, designation, reporting, cancellation, consent, inspection, disuse, etc. prescribed in Article 35 of the Act (hereafter referred to as "guidelines for authorization, permission, etc.").
(2) The head of a related administrative agency shall notify the Minister of SMEs and Startups of the guidelines for authorization, permission, etc. as necessary for formulating the guidelines on processing prescribed in paragraph (1). The foregoing shall also apply where guidelines for authorization, permission, etc. are amended. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
 Article 25 (Procedures for Preliminary Consultation)
(1) A business starter who intends to apply for preliminary consultation on the possibility of approval of a business plan, etc. pursuant to Article 34 (1) of the Act shall file an application therefor with the head of the Si/Gun/Gu having jurisdiction over the area in which a factory is to be built, along with the documents specified by Ordinance of the Ministry of SMEs and Startups. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 24432, Mar. 23, 2013; Presidential Decree No. 28213, Jul. 26, 2017>
(2) The head of a Si/Gun/Gu shall notify the applicant of the likelihood of approval of a business plan, etc. within seven days from the filing date of the application for preliminary consultation held under paragraph (1).
 Article 26 (Period of Consultation with other Administrative Agencies)
"Period prescribed by Presidential Decree" in the former part of Article 35 (4) of the Act means ten days.
 Article 27 (Revocation, etc. of Approval of Business Plans)
(1) "Period prescribed by Presidential Decree" in Article 37 (1) 1 of the Act means three years from the date a business plan is approved (or two years from the date a business plan is approved, if the conversion of farmland is deemed permitted or reported by legal fiction under Article 35 (1) 9 of the Act), and "period prescribed by Presidential Decree after commencement of such works for the factory" in the same subparagraph means one year after the commencement of construction works for a factory. <Amended by Presidential Decree No. 21506, May 28, 2009>
(2) "Period prescribed by Presidential Decree" in Article 37 (1) 4 of the Act means four years.
(3) When the head of a Si/Gun/Gu intends to revoke approval of a business plan and the permission for the construction of a factory prescribed in Article 37 (1) of the Act, he/she shall take the relevant measure only if the person subject to the measure does not accept his/her proposal after proposing that person to amend the business plan or to build the factory within a pre-specified period.
 Article 28 (Establishment and Operation of Business Start-Up Ombudsman Offices)
(1) The head of each Si/Gun/Gu shall establish a business start-up ombudsman office for small and medium enterprises prescribed in Article 38 (1) of the Act (hereafter referred to as "business start-up ombudsman office for small and medium enterprises" in this Article) in order to receive and process civil petitions on business start-ups and shall assign employees to take exclusive charge of administrative affairs regarding business start-ups.
(2) The head of each Si/Gun/Gu may additionally prescribe matters necessary for the establishment and operation of the business start-up ombudsman office for small and medium enterprises.
 Article 29 (Establishment of Departments Exclusively Dedicated to Promotion of Business Start-Ups)
(1) The Minister of SMEs and Startups may establish a department exclusively dedicated to the affairs pertaining to the promotion of business start-ups under Article 39 (1) of the Act (hereafter referred to as "specialized organization" in this Article), upon receipt of a request from a nonprofit institution or organization specialized in the business start-ups of small and medium enterprises. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
(2) The specialized organization shall perform the following business activities: <Amended by Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 25807, Dec. 3, 2014>
1. Research on policies for promoting business start-ups and search for tasks for improving systems;
2. Providing information regarding funds, human resources, markets, site location, etc. and assistance to business starters;
3. Development, operation, and distribution of educational models for promoting business start-ups;
4. Survey on and analysis of actual conditions of business start-ups;
5. Exchange and cooperation with international organizations and foreign countries with regard to business start-ups;
6. Search for, and assistance to, intending good business starters;
7. Enhancement of entrepreneurship, including education of youths, intending business starters, etc. in business start-ups;
8. Promoting business start-ups in universities, colleges, research institutes, etc.;
9. Training of human resources specialized in business start-ups;
10. Other business activities entrusted by the head of a related central administrative agency.
(3) Other matters necessary for the establishment, performance, and operation of a department exclusively dedicated to the affairs pertaining to the promotion of business start-ups shall be determined and publicly announced by the Minister of SMEs and Startups. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
 Article 29-2 (Procedures and Methods for Exemption from Charges)
(1) A business starter intending to be exempted from charges prescribed in Article 39-3 (2) of the Act shall request the head of a Si/Gun/Gu having jurisdiction over his/her principal place of business to exempt him/her from charges by filing an application for exemption from charges in the form prescribed by Ordinance of the Ministry of SMEs and Startups, along with the following documents: <Amended by Presidential Decree No. 26222, May 1, 2015; Presidential Decree No. 28213, Jul. 26, 2017>
1. In cases of a sole proprietor:
(a) A report on turnover for two quarters after a type of business is added (limited to cases where a type of business is added);
(b) Other documents that the head of each Si/Gun/Gu deems necessary for ascertaining the status of business start-ups;
2. In cases of a corporation:
(a) An agreement on the division of business and statement of changes in stocks during the month the business is established (limited to where a business is divided);
(b) A report on turnover during two quarters after a type of business is added (limited to where a type of business is added);
(c) Other documents that the head of each Si/Gun/Gu deems necessary for ascertaining the status of business start-ups.
(2) Upon receipt of an application for exemption from charges prescribed in paragraph (1), the head of a Si/Gun/Gu shall verify the following matters by data matching administrative information available for sharing under Article 36 (1) of the Electronic Government Act: Provided, That if the applicant does not consent to the verification of the matter prescribed in subparagraph 1, the applicant shall be required to submit a copy of the relevant document: <Amended by Presidential Decree No. 26222, May 1, 2015>
1. A business registration certificate;
2. A certificate of a corporate register (limited to where the applicant is a corporation);
3. Deleted. <by Presidential Decree No. 26222, May 1, 2015>
(3) The head of a Si/Gun/Gu shall notify the applicant whether the applicant is eligible for exemption from charges, within 14 days from the filing date of the application for exemption from charges prescribed in paragraph (1).
(4) If deemed necessary for the operation of the system for exemption from charges prescribed in Article 39-3 of the Act, the Minister of SMEs and Startups may request the head of a related administrative agency to provide necessary information, including outcomes of exemption from charges. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
[This Article Wholly Amended by Presidential Decree No. 25079, Jan. 14, 2014]
 Article 29-3 (Administrative Affairs Handled by Support System to Help Starting Home-Based Business)
Administrative affairs that may be handled by the system under which a company can be established through the information and communications network prescribed in Article 39-5 (1) of the Act (support system to help starting a home-based business) shall be as follows:
1. Registration for establishing a company prescribed in the Commercial Act and the Commercial Registration Act;
2. Payment of registration and license tax and local education tax prescribed in the Local Tax Act;
3. Registration of businesses prescribed in the Corporate Tax Act or the Value-Added Tax Act;
4. Reporting on the National Pension under the National Pension Act, the National Health Insurance under the National Health Insurance Act, the Employment Insurance under the Employment Insurance Act, and the Industrial Accident Compensation Insurance under the Industrial Accident Compensation Insurance Act.
[This Article Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014]
CHAPTER VI SUPPLEMENTARY PROVISIONS
 Article 30 (Reporting and Inspection of Status, etc. of Business Operations)
(1) Pursuant to Article 40 (1) of the Act, an investment company for the establishment of small and medium enterprises, an accelerator, the executive operator of a small and medium enterprise establishment investment association, a small and medium enterprise consulting company, and the operator of a business incubator shall report matters regarding the status, etc. of business operations to the Minister of SMEs and Startups in accordance with the following guidelines: <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. An investment company for the establishment of small and medium enterprises or the executive operator of a small and medium enterprise establishment investment association; Monthly;
2. An accelerator, a small and medium enterprise consulting company, or a business incubator: Semi-annually.
(2) Reports on the status, etc. of business operations filed under paragraph (1) may be made by electronic documents (referring to electronic documents defined in subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions; hereinafter the same shall apply). <Amended by Presidential Decree No. 20388, Nov. 16, 2007; Presidential Decree No. 24076, Aug. 31, 2012>
(3) "Books of accounts, documents, etc. specified by Presidential Decree, including audit reports of an investment company for the establishment of small and medium enterprises; an accelerator, or a small and medium enterprise establishment investment association" in the main sentence of Article 40 (1) of the Act means the following documents: <Amended by Presidential Decree No. 27632, Nov. 29, 2016>
1. Audit reports of an investment company for the establishment of small and medium enterprises; an accelerator, or a small and medium enterprise establishment investment association;
2. A certified transcript of a corporate register of an investment company for the establishment of small and medium enterprises or an accelerator;
3. Documents certifying the status of specialized human resources of an investment company for the establishment of small and medium enterprises or an accelerator, and their qualifications;
4. Documents regarding the current status of offices secured by an investment company for the establishment of small and medium enterprises or an accelerator;
5. A list of stockholders of an investment company for the establishment of small and medium enterprises or an accelerator;
6. A list of investors in a small and medium enterprise establishment investment association;
7. Contracts for transactions of an investment company for the establishment of small and medium enterprises, an accelerator, or a small and medium enterprise establishment investment association;
8. The general ledger of an investment company for the establishment of small and medium enterprises; an accelerator, or a small and medium enterprise establishment investment association;
9. Lists of stockholders of the companies that have conducted transactions with an investment company for the establishment of small and medium enterprises, an accelerator, or a small and medium enterprise establishment investment association and certified transcripts of a corporate register of such companies.
(4) "Where any of the grounds specified by Presidential Decree exists" in Article 40 (1) 8 of the Act means any of the following cases: <Amended by Presidential Decree No. 27632, Nov. 29, 2016>
1. Where it is necessary to ascertain whether a change in any of the material facts regarding an investment company for the establishment of small and medium enterprises is registered, in accordance with the latter part of the main sentence of Article 10 (1) of the Act;
2. Where it is necessary to ascertain whether a change in any of the material facts regarding an accelerator is registered in accordance with the latter part of the main sentence of Article 19-2 (1) of the Act;
3. Where it is necessary to ascertain whether an investment company for the establishment of small and medium enterprises complies with standards for soundness of business management and assets prescribed in Article 42-2 (1) of the Act.
 Article 31 (Standards for Soundness of Business Management)
"Standards for soundness of business management prescribed by Presidential Decree" in Article 42-2 (1) of the Act means that the capital impairment rate (referring to the rate by which total stockholder's equity falls short of paid-in capital) is less than 50/100.
[This Article Wholly Amended by Presidential Decree No. 25079, Jan. 14, 2014]
 Article 31-2 (Exceptions to Revocation of Registration)
"Requirements prescribed by Presidential Decree" in the proviso to Article 43 (1) 3 of the Act means the following requirements: <Amended by Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. The investment company for the establishment of small and medium enterprises shall make investments in accordance with Article 16 (1) of the Act;
2. The small and medium enterprise establishment investment association in which the relevant investment company for the establishment of small and medium enterprises is an executive member, makes investments under Article 10 (1) 1, 2, 2-2, and 5 of the Act for the purposes of use specified by Ordinance of the Ministry of SMEs and Startups.
[This Article Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014]
 Article 31-3 (Criteria for Revocation of Accelerators and Suspension of Support for Them)
The criteria for revoking registration of accelerators and suspending support therefor under Article 43 (2) of the Act shall be as prescribed in attached Table 2-1.
[This Article Newly Inserted by Presidential Decree No. 27632, Nov. 29, 2016]
 Article 31-4 (Criteria for Revocation, etc. of Registration of Small and Medium Enterprise Consulting Companies, etc.)
The criteria for revoking registration, cancelling support, or suspending support for small and medium enterprise consulting companies and business incubators prescribed in Article 43 (4) and (5) of the Act shall be as prescribed in attached Table 3. <Amended by Presidential Decree No. 27632, Nov. 29, 2016>
[This Article Newly Inserted by Presidential Decree No. 26222, May 1, 2015]
 Article 32 (Entrustment, etc. of Administrative Affairs)
(1) Pursuant to Article 45 (2) of the Act, the Minister of SMEs and Startups shall entrust the following administrative affairs (excluding affairs related to the safekeeping and management of relevant data) to the Korea Venture Capital Association established with permission from the Minister of SMEs and Startups pursuant to Article 32 of the Civil Act (hereafter referred to as the "Korea Venture Capital Association" in this Article): <Amended by Presidential Decree No. 21506, May 28, 2009; Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Assistance in training specialized human resources for investment companies for the establishment of small and medium enterprises and attracting foreign investments made under subparagraphs 1 and 2 of Article 9-3 of the Act;
1-2. Ascertainment and management of specialized human resources for investment companies for the establishment of small and medium enterprises prescribed in Article 10 (2) 3 of the Act;
2. Management of public disclosure of investment companies for the establishment of small and medium enterprises prescribed in Article 14 of the Act;
3. Receipt of annual reports on investment companies for the establishment of small and medium enterprises prescribed in Article 19 of the Act and annual reports on small and medium enterprise establishment investment associations prescribed in Article 23 of the Act;
4. Receipt and verification of applications for registration and amending registration of small and medium enterprise establishment investment associations prescribed in Article 20 of the Act;
5. Receipt and verification of reports on outcomes of liquidation of small and medium enterprise establishment investment associations prescribed in Article 26 of the Act;
6. Receipt of reports on the status, etc. of business operations of investment companies for the establishment of small and medium enterprises and small and medium enterprise establishment investment associations prescribed in the main sentence of Article 40 (1) of the Act.
(2) Pursuant to Article 45 (2) of the Act, the Minister of SMEs and Startups shall entrust the following administrative affairs to an organization specialized in the management of investments made under Article 4-2 (1) of the Act on Special Measures for the Promotion of Venture Businesses (hereafter referred to as "organization specialized in the management of investments" in this Article): <Newly Inserted by Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Safekeeping and management of the following data:
(a) Data on registration and amended registration of investment companies for the establishment of small and medium enterprises prescribed in Article 10 (1) of the Act;
(b) Data on reporting of succession to the status of an investment company for the establishment of small and medium enterprises prescribed in Article 11 (2) of the Act;
(c) Data on applications for cancelling registration of an investment company for the establishment of small and medium enterprises prescribed in Article 12 (1) of the Act;
(d) Data referred to in Article 15-2 (2) of the Act;
(e) Data on censuring executive officers and employees of an investment company for the establishment of small and medium enterprises prescribed in Article 42 (1) of the Act;
(f) Data on sanctions imposed under Article 43 of the Act, including revocation of registration of an investment company for the establishment of small and medium enterprises;
(g) Data on hearings held under Article 44 of the Act;
(h) Data on the administrative affairs specified in paragraph (1);
2. Evaluation of actual conditions of management of investment companies for the establishment of small and medium enterprises prescribed in Article 42-2 (2) of the Act.
(3) Pursuant to Article 45 (2) of the Act, the Minister of SMEs and Startups may entrust the following administrative affairs to a corporation established with permission from the Minister of SMEs and Startups under Article 32 of the Civil Act for the purposes of support for business start-ups, etc. and equipped with human resources and equipment for performing the relevant affairs: <Newly Inserted by Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. Ascertaining whether a business incubator is equipped with specialized human resources and facilities, in accordance with Article 6 (1) of the Act;
2. Ascertaining whether a small and medium enterprise consulting company is equipped with specialized human resources and facilities, in accordance with Article 31 (2) 3 of the Act;
3. Receipt and verification of reports on the status, etc. of business operations of small and medium enterprise consulting companies and business incubators under the main sentence of Article 40 (1) of the Act.
(4) Pursuant to Article 45 (2) of the Act, the Minister of SMEs and Startups shall entrust administrative affairs for the establishment and operation of the support system to assist home-based business start-ups prescribed in Article 39-5 of the Act to an organization exclusively dedicated to promoting business start-ups under Article 39 (1) of the Act. <Newly Inserted by Presidential Decree No. 25079, Jan. 14, 2014; Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
(5) Pursuant to Article 45 (2) of the Act, the Minister of SMEs and Startups shall entrust the administrative affairs for evaluating good faith management under Article 4-3 (4) of the Act to the following persons: <Newly Inserted by Presidential Decree No. 27407, Jul. 28, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. An organization exclusively dedicated to promoting business start-ups prescribed in Article 39 (1) of the Act;
2. The Korea Technology Credit Guarantee Fund prescribed in Article 12 (1) of the Korea Technology Credit Guarantee Fund Act;
3. The Credit Guarantee Fund prescribed in the Credit Guarantee Fund Act;
4. The Korea Technology and Information Promotion Agency prescribed in Article 20 (1) of the Act on the Promotion of Technology Innovation of Small and Medium Enterprises;
5. The Small and Medium Business Corporation prescribed in Article 68 (1) of the Small and Medium Enterprises Promotion Act.
(6) The Minister of SMEs and Startups may request the following persons to submit data about the administrative affairs entrusted under paragraphs (1) through (3), as necessary: <Amended by Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. The Korea Venture Capital Association;
2. An institution specialized in the management of investments;
3. A corporation entrusted with administrative affairs prescribed in paragraph (3).
(7) When the Minister of SMEs and Startups entrusts administrative affairs to any person pursuant to paragraph (2) or (3), he/she shall publicly announce the name, representative, and address of the entrusted institution and details of entrusted administrative affairs. <Newly Inserted by Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 26905, Jan. 19, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
 Article 32-2 (Management of Personally Identifiable Information)
If unavoidable to perform the following administrative affairs, the Minister of SMEs and Startups (including the organizations exclusively dedicated to promoting business start-ups established pursuant to Article 39 of the Act) may manage data containing a resident registration number, a passport number, a driver's license number, or an alien registration number prescribed in Article 19 of the Enforcement Decree of the Personal Information Protection Act: <Amended by Presidential Decree No. 25807, Dec. 3, 2014; Presidential Decree No. 28213, Jul. 26, 2017>
1. Administrative affairs for projects for promoting business start-ups prescribed in Article 4-2 (1) of the Act;
2. Administrative affairs for registering investment companies for the establishment of small and medium enterprises prescribed in Article 10 of the Act;
3. Administrative affairs for registering small and medium enterprise establishment investment associations prescribed in Article 20 of the Act;
4. Administrative affairs for registering small and medium enterprise consulting companies prescribed in Article 31 of the Act;
5. Administrative affairs for operating the support system to help starting a home-based business prescribed in Article 39-5 of the Act.
[This Article Newly Inserted by Presidential Decree No. 24317, Jan. 16, 2013]
 Article 32-3 (Re-examination of Regulation)
The Minister of SMEs and Startups shall examine the appropriateness of the following matters every three years from each base date specified in the following subparagraphs (referring to the period that ends on the day before the base date of every third year) and take measures for improvement, etc.: <Amended by Presidential Decree No. 26804, Dec. 30, 2015; Presidential Decree No. 27632, Nov. 29, 2016; Presidential Decree No. 27751, Dec. 30, 2016; Presidential Decree No. 28213, Jul. 26, 2017>
1. The criteria for designating the operator of a business incubator and the procedures for filing a designation application prescribed in Article 6 and attached Table 1: January 1, 2014;
2. The criteria for the registration of investment companies for the establishment of small and medium enterprises prescribed in Article 9: January 1, 2014;
3. Restricted activities of investment companies for the establishment of small and medium enterprises prescribed in Article 10 and exceptions thereto: January 1, 2014;
4. The ratio of mandatory investment of an investment company for the establishment of small and medium enterprises prescribed in Article 11 and standards for calculating the ratio: January 1, 2014;
5. Deleted; <by Presidential Decree No. 27751, Dec. 30, 2016>
5-2. The procedures for submitting annual reports of an investment company for the establishment of small and medium enterprises and the method for writing off unrecoverable invested assets prescribed in Article 13: January 1, 2016;
6. The requirements and procedures for registering small and medium enterprise establishment investment associations prescribed in Article 14: January 1, 2014;
7. The ratio of mandatory investment by a small and medium enterprise establishment investment association prescribed in Article 16 and the methods for calculating the ratio: January 1, 2014;
7-2. The procedures for submitting annual reports of a small and medium enterprise establishment investment association prescribed in Article 17 and the formulation of standard bylaws of small and medium enterprise establishment investment associations: January 1, 2016;
8. Requirements for registration of investment companies for the establishment of small and medium enterprises prescribed in Article 20: January 1, 2014;
8-2. The procedures for the approval of business plans prescribed in Article 22 and matters subject to approval of amendment: January 1, 2016;
9. The period that constitutes grounds for revocation of approval of a business plan prescribed in Article 27 and the procedures for revoking approval: January 1, 2014;
10. Exceptions to the revocation of registration made under Article 31-2: January 1, 2017.
[This Article Newly Inserted by Presidential Decree No. 25050, Dec. 30, 2013]
CHAPTER VII PENALTY PROVISIONS
 Article 33 (Guidelines for Imposing Administrative Fines)
The guidelines for imposing administrative fines prescribed in Article 50 (1) of the Act shall be as prescribed in attached Table 2. <Amended by Presidential Decree No. 26905, Jan. 19, 2016>
[This Article Wholly Amended by Presidential Decree No. 21506, May 28, 2009]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures concerning Specialized Human Resources of Investment Companies for Establishment of Small and Medium Enterprises)
The previous provisions of Article 8 (5) shall not apply to the persons who fall under the previous proviso (referring to the proviso before being amended by Presidential Decree No. 17791) to Article 8 (5) 1 due to an event that occurred on or before June 26, 2002 and the persons who fail to meet the criteria prescribed in Article 8 (5) 1, among specialized human resources who were in service for an investment company for business start-ups as at June 26, 2002, only if they continue in service for the relevant company.
Article 3 (Transitional Measures concerning Requirements for Registration of Business Start-up Investment Associations)
Notwithstanding the amended provisions of Article 14 (1), the previous provisions (referring to the provisions in force before being amended by Presidential Decree No. 19956) shall apply to the business start-up investment associations registered as at March 27, 2007 and applications filed for registration of a business start-up investment association before March 27, 2007.
Article 4 Omitted.
Article 5 (Relationship to other Statutes)
A citation of any provision of the previous Enforcement Decree of the Support for Small and Medium Enterprise Establishment Act by any other 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 previous provisions, if such provision exists in this Decree.
ADDENDA <Presidential Decree No. 20331, Oct. 23, 2007>
Article 1 (Enforcement Date)
This Decree shall enter into force on October 28, 2007. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 20388, Nov. 16, 2007>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 18, 2007.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 20728, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 20780, May 9, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Restrictions on Activities of Business Start-up Investment Companies and Business Start-up Investment Associations)
The amended provisions of Article 10 (2) 3 and (4) 2 and 6 (including cases to which the aforesaid provisions apply mutatis mutandis pursuant to the amended provisions of Article 16 (3)) shall apply to activities conducted for trading or investing after this Decree enters into force.
Article 3 (Transitional Measures concerning Requirements for Registration of Business Start-up Investment Associations)
Notwithstanding the amended provisions of Article 14 (1) 1, the previous provisions shall apply to the capital of a business start-up investment association registered, or an application for registration of which was filed before this Decree enters into force.
ADDENDA <Presidential Decree No. 20947, Jul. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2009. (Proviso Omitted.)
Articles 2 through 28 Omitted.
ADDENDUM <Presidential Decree No. 21506, May 28, 2009>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 21590, Jun. 30, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2009. (Proviso Omitted.)
Article 2 (Period of Validity, etc. Following Amendment of the Enforcement Decree of the Farmland Act)
(1) The amended provisions of subparagraph 46 of attached Table 2 of the Enforcement Decree of the Farmland Act shall remain in force until June 30, 2011.
(2) The amended provisions of subparagraph 46 of attached Table 2 of the Enforcement Decree of the Farmland Act shall apply where an application or a report for the conversion of farmland is filed after this Decree enters into force (including cases of permission for amendment and cases of authorization or permission in which permission for the conversion of farmland or permission for an amendment to such permission is deemed to have been granted by legal fiction under any other Act; hereafter the same shall apply in this paragraph) and shall also apply where an application or a report (including a report on a change; hereafter the same shall apply in this paragraph) is filed for the conversion of farmland until June 30, 2011.
Article 3 (Applicability to Amendment of the Enforcement Decree of the Tourism Promotion Act)
The amended provisions of subparagraph 1 of Article 32 of the Enforcement Decree of the Tourism Promotion Act shall also apply to persons who obtained approval of a business plan prescribed in Article 15 of the Act or the persons who applied for approval, before this Decree enters into force.
Article 4 (Applicability to Amendment of the Enforcement Decree of the Industrial Sites and Development Act)
(1) The amended provisions of Article 40 (2) of the Enforcement Decree of the Industrial Sites and Development Act shall apply to sale contracts concluded after this Decree enters into force.
(2) The previous provisions shall apply to the matters delegated to Municipal Ordinance under the amended provisions of Article 40 (2) of the Enforcement Decree of the Industrial Sites and Development Act until the relevant Municipal Ordinance is enacted or amended.
Article 5 (Transitional Measures concerning Amendment of the Enforcement Decree of the Employment Insurance Act)
The amended provisions of Article 13 (1) 2 of the Enforcement Decree of the Employment Insurance Act shall apply to the places of business for which work hours are reduced under Article 13 (1) of the Enforcement Decree of the Employment Insurance Act after this Decree enters into force.
Article 6 (Transitional Measures concerning Amendment of the Enforcement Decree of the Act on the Management and Promotion of Real Estate Development Business)
The previous provisions shall apply to the imposition of administrative fines for offences committed before this Decree enters into force.
Article 7 (Transitional Measures concerning Amendment of the Enforcement Decree of the New Harbor Construction Promotion Act)
The amended latter part of Article 9 (5) of the Enforcement Decree of the New Harbor Construction Promotion Act shall apply to the persons still within the period extended for filing an application for approval of an implementation plan for a new harbor construction project under the previous provisions as at the time this Decree enters into force, and the period shall be deemed to have been extended once in accordance with the afore-said amended provisions.
Article 8 (Transitional Measures concerning Amendment of the Enforcement Decree of the Act on the Promotion of Saving and Recycling of Resources)
The previous provisions shall apply to the imposition of administrative fines for offences committed before this Decree enters into force.
Article 9 (Transitional Measures concerning Amendment of the Enforcement Decree of the Sewerage Act)
(1) The first re-education prescribed in the amended provisions of Article 38 (2) 2 (a) of the Enforcement Decree of the Sewerage Act shall be conducted in the year of the fifth anniversary from the completion date of the latest re-education conducted before this Decree enters into force.
(2) The amended provisions of Article 38 (2) 2 (b) of the Enforcement Decree of the Sewerage Act shall apply to the suspension of business operations ordered after this Decree enters into force.
ADDENDA <Presidential Decree No. 21641, Jul. 27, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 31, 2009. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Presidential Decree No. 21835, Nov. 20, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 22, 2009.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 22131, Apr. 20, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Restrictions on Activities of Business Start-up Investment Companies)
The amended provisions of Article 10 (4) 1 (d) shall apply to transactions conducted after this Decree enters into force.
Article 3 (Applicability to Dissolution of Association for Investment in Small and Medium Enterprises)
The amended provisions of Article 18 (1) 3 shall apply, where a business start-up investment association is dissolved due to the relevant event after this Decree enters into force.
ADDENDA <Presidential Decree No. 22493, Nov. 15, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 18, 2010.
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 22519, Dec. 9, 2010>
This Decree shall enter into force on December 9, 2010.
ADDENDA <Presidential Decree No. 22870, Apr. 5, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures concerning Administrative Fines)
(1) Notwithstanding the amended provisions of attached Table 2, the previous provisions shall apply where the guidelines for the imposition of an administrative fine apply to an offence committed before this Decree enters into force.
(2) The administrative fines imposed for offences committed before this Decree enters into force shall not be included in the number of violations to be calculated under the amended provisions of attached Table 2.
ADDENDUM <Presidential Decree No. 22966, Jun. 8, 2011>
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 22977, Jun. 24, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 23644, Feb. 29, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
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.
ADDENDUM <Presidential Decree No. 24317, Jan. 16, 2013>
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 24432, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 24638, Jun. 28, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2013. (Proviso Omitted.)
Articles 2 through 17 Omitted.
ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013>
This Decree shall enter into force on January 1, 2014. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 25079, Jan. 14, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 (Applicability to Procedures for Exemption from Charges)
The amended provisions of Article 29-2 (3) shall apply where an application for exemption from charges is filed after this Decree enters into force.
Article 3 (Transitional Measures concerning Requirements for Registration of Business Start-up Investment Companies)
A person who was registered as a business start-up investment company in accordance with the previous provisions but does not meet any of the requirements for registration made under the amended provisions of Article 9 (6) shall meet the requirements under the relevant amended provisions until either of the following reference dates:
1. The amended provisions of Article 9 (6) 1 or 2: February 6, 2017;
2. The amended provisions of Article 9 (6) 3: February 6, 2019.
Article 4 Omitted.
ADDENDUM <Presidential Decree No. 25807, Dec. 3, 2014>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 25945, Dec. 30, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of registration of the merger effected under Article 4 (6) of the Korea Development Bank Act (wholly amended by Act No. 12663).
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 26181, Mar. 31, 2015>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 26222, May 1, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 4, 2015. (Proviso Omitted.)
Article 2 (Transitional Measures concerning Criteria for Suspension of Support, etc.)
The administrative measures taken against offences committed before this Decree enters into force, shall not be included in calculation of the number of violations committed under the amended provisions of attached Table 3.
ADDENDA <Presidential Decree No. 26600, Oct. 23, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on October 25, 2015. (Proviso Omitted.)
Articles 2 through 9 Omitted.
ADDENDUM <Presidential Decree No. 26804, Dec. 30, 2015>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 26905, Jan. 19, 2016>
This Decree shall enter into force on the date of its promulgation.
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.
ADDENDUM <Presidential Decree No. 27407, Jul. 28, 2016>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 27414, Jul. 28, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on August 1, 2016. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 27632, Nov. 29, 2016>
This Decree shall enter into force on November 30, 2016.
ADDENDA <Presidential Decree No. 27751, Dec. 30, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2017. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Presidential Decree No. 28213, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM <Presidential Decree No. 28380, Oct. 17, 2017>
This Decree shall enter into force on the date of its promulgation.