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TRUST ACT

Wholly Amended by Act No. 10924, Jul. 25, 2011

Amended by Act No. 12193, Jan. 7, 2014

Act No. 12420, Mar. 18, 2014

Act No. 12592, May 20, 2014

Act No. 15022, Oct. 31, 2017

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Act is to provide for the legal relations on the trust in private laws.
 Article 2 (Definition of Trust)
The term "trust" used in this Act means a legal relation that a person who creates a trust (hereinafter referred to as "truster") transfers a specific piece of property (including part of business or an intellectual property right) to a person who accepts the trust (hereinafter referred to as "trustee"), establishes a security right or makes any other disposition, and requires the trustee to manage, dispose of, operate, or develop such property or engage in other necessary conduct to fulfill the purpose of the trust, for the benefit of a specific person (hereinafter referred to as "beneficiary") or for a specific purpose, based on a confidence relation between the truster and the trustee.
 Article 3 (Creation of Trust)
(1) A trust may be created in any of the following manners: Provided, That a trust for a specific purpose without any beneficiary (hereinafter referred to as "purpose trust"), shall not be created in the manner prescribed in subparagraph 3, except for public trusts prescribed in the Public Trust Act: <Amended by Act No. 12420, Mar. 18, 2014>
1. A contract between the truster and the trustee;
2. The will of the truster;
3. Declaration of the truster in which the truster has specified the purpose of the trust, trust property, beneficiary (referring to a trust administrator under Article 67 (1) in cases of a public trust prescribed in the Public Trust Act), etc. and has designated himself/herself as the trustee.
(2) A trust under paragraph (1) 3 shall be created by means of a notarial deed except for public trusts prescribed in the Public Trust Act, and no right to cancel the trust may be withheld. <Amended by Act No. 12420, Mar. 18, 2014>
(3) Where a truster creates a trust under paragraph (1) 3 for the evasion of execution or for any other fraudulent purpose, an interested person may request the court for the termination of the trust.
(4) A truster may specify, by means of a deed of trust, the trust property by granting the authority to designate trust property to the trustee or beneficiary.
(5) Unless otherwise prescribed in the deed of trust, a trustee may create a trust on trust property for another person upon obtaining the consent from the beneficiary if necessary to fulfill the purpose of the trust.
 Article 4 (Public Notification of, and Opposition to, Trust)
(1) With respect to any property right that can be registered, the fact that the property belongs to trust property may contest against a third person by completing a registration thereof.
(2) With respect to any property right that cannot be registered, the fact that the property belongs to trust property may contest against a third person upon indicating that such property right is the trust property by means of the management, etc. of such property right separately from other property.
(3) When no registry of a property right referred to in paragraph (1) exists, such property right shall be deemed a property right that cannot be registered.
(4) In indicating that a piece of property is the trust property pursuant to paragraph (2), such indication may be also made by indicating such fact on a book prescribed by Presidential Decree.
 Article 5 (Restrictions on Purposes)
(1) A trust shall be null and void if its purpose is contrary to the good public morals or other social order.
(2) A trust shall be null and void if its purpose is illegal or cannot be fulfilled.
(3) Where a part of the purpose of a trust falls under paragraph (1) or (2), such trust shall be effective only for the remaining part that does not fall under paragraph (1) or (2): Provided, That if it is impossible to separate the part of the purpose that falls under paragraph (1) or (2) from the part other than that, or if maintaining the trust only for the remaining purpose is obviously contrary to the intention of the truster even if the purpose of the trust is separable, the trust shall become null and void in whole.
 Article 6 (Prohibition of Trust Aimed at Lawsuit)
Any trust, the main purpose of which is to have the trustee to proceed with litigation, shall be null and void.
 Article 7 (Prohibition of Trusts Aimed at Evasion of Law)
Anyone who is not entitled to enjoy a specified property right pursuant to statutes shall not enjoy, as a beneficiary, the same benefit as he/she has such right.
 Article 8 (Fraudulent Trusts)
(1) If an obligor has created a trust knowing that it would be prejudicial to an obligee, the obligee may claim for the cancellation and reinstatement, as prescribed in Article 406 (1) of the Civil Act, against the trustee or beneficiary, even if the trustee has acted in good faith: Provided, That the same shall not apply where the beneficiary has not been aware of prejudicing the obligee as at the time he/she acquired the right to benefit.
(2) In cases falling under the proviso to paragraph (1), where some beneficiaries have not been aware of prejudicing an obligee as at the time they acquired the right to benefit, the obligee may claim for the cancellation and reinstatement as prescribed in the main sentence of paragraph (1) only against the beneficiaries in bad faith.
(3) In cases falling under the main sentence of paragraph (1), the obligee may claim for reinstatement against beneficiaries in good faith to the extent of existing trust property.
(4) Where a trust is canceled and the trust property is reinstated, the truster shall, with respect to the cancelled trust, be responsible to the third person in good faith who has conducted a transaction with the trustee of the relevant trust to the extent of the trust property so reinstated.
(5) An obligee may request a beneficiary in bad faith to transfer the right to benefit he/she has acquired to the truster. In such cases, Article 406 (2) of the Civil Act shall apply mutatis mutandis.
(6) A beneficiary or trustee who has colluded in a fraudulent trust or abetted or aided the truster in creating a fraudulent trust in cases falling under paragraph (1) shall, jointly and severally with the truster, be liable for the compensation for the loss suffered by the obligee therefrom.
CHAPTER II TRUST-RELATED PERSONS
 Article 9 (Rights of Trusters)
(1) By a deed of trust, the purport that all or some of trusters would not have all or some of the rights of trusters under this Act may be prescribed.
(2) In cases of a purpose trust, no right of a truster under this Act may be restricted by a deed of trust, notwithstanding paragraph (1).
 Article 10 (Transfer of Status of Truster)
(1) The status of a truster may be transferred to a third person by the method prescribed by a deed of trust.
(2) Where no method of transfer under paragraph (1) has been prescribed, the status of a truster may be transferred to a third person upon obtaining consent from the trustee and beneficiary. In such cases, if a number of trusters exist, consent from other trusters shall be also obtained.
(3) Where a trust is created pursuant to Article 3 (1) 2, the heir of a truster shall not inherit the status of the truster: Provided, That the deed of trust shall govern if it prescribes otherwise.
 Article 11 (Fiduciary Capacity)
No minor, incompetent or quasi-incompetent, or no one declared bankrupt, shall be a trustee.
 Article 12 (Termination of Duties of Trustees)
(1) The duties of a trustee shall be terminated, if:
1. The trustee dies;
2. The trustee is declared incompetent or quasi-incompetent;
3. The trustee is declared bankrupt;
4. The corporate trustee is dissolved on the grounds, other than the merger.
(2) Where the duties of a trustee are terminated pursuant to paragraph (1) 1, 2 or 4, the heir, legal representative or liquidator of the trustee shall immediately notify the beneficiary of such termination.
(3) Where the duties of a trustee are terminated pursuant to paragraph (1) 3, the trustee shall notify the relevant fact as follows:
1. To the beneficiary: The fact that the duties of the trustee have been terminated;
2. To the administrator in bankruptcy: Matters concerning the trust property.
(4) Where the duties of a trustee are terminated pursuant to paragraph (1) 1, 2 or 4, the heir, legal representative or liquidator of the trustee shall take custody of the trust property and engage in conduct necessary for handing over the trust affairs, until a new trustee or administrator of trust property becomes able to perform the trust affairs, and immediately notify the beneficiary of such fact.
(5) Where a corporate trustee merges with another corporation, a corporation established in the course of the merger or a corporation surviving the merger shall continue to have the rights and duties of the trustee. Where a corporate trustee is split-off, the same shall also apply to a corporation designated as the trustee by the split-off.
 Article 13 (Termination of Duties of Trustee Prescribed by Deed of Trust)
(1) The duties of a trustee shall be terminated, if a ground for termination of his/her duties prescribed by the deed of trust arises or if he/she loses a specified qualification prescribed by the deed of trust arises.
(2) A trustee whose duties are terminated pursuant to paragraph (1) shall immediately notify the beneficiary of such termination.
 Article 14 (Termination of Duties of Trustee by Resignation)
(1) No trustee may resign his/her post without the consent of the beneficiary and the truster, unless otherwise prescribed by the deed of trust.
(2) Notwithstanding paragraph (1), a trustee may resign his/her post with approval from the court for a justified ground.
(3) A trustee who has resigned his/her post shall immediately notify the beneficiary of such resignation.
 Article 15 (Status of Trustee whose Duties are Terminated)
A trustee whose duties are terminated pursuant to Article 13 (1) or 14 (1) shall continue to have the rights and obligations of the trustee until a new trustee or administrator of trust property becomes able to perform the trust affairs.
 Article 16 (Termination of Duties of Trustee by Dismissal)
(1) The truster and the beneficiary may, by agreement or at the sole discretion of the beneficiary if no truster exists, dismiss the trustee at any time: Provided, That the deed of trust shall govern if it prescribes otherwise.
(2) A person who dismisses a trustee pursuant to paragraph (1) without any justified ground at the time disadvantageous to the trustee shall compensate for losses.
(3) Where a trustee engages in a conduct in violation of his/her duties or where any other gross cause arises, the truster or beneficiary may request the court to dismiss the trustee.
(4) A trustee who is dismissed at the request made pursuant to paragraph (3) shall immediately notify the beneficiary of such dismissal.
(5) A trustee who is dismissed shall take custody of the trust property and engage in conduct necessary for handing over the trust affairs, until a new trustee or administrator of trust property becomes able to perform the trust affairs: Provided, That the same shall not apply to a trustee who has been dismissed for a violation of his/her duties.
 Article 17 (Disposition for Appointment, etc. of Administrator of Trust Property)
(1) Where the duties of a trustee are terminated or where it is inappropriate for a trustee to perform the trust affairs due to a conflict of interests between the trustee and the beneficiary, the court may order the appointment of an administrator of trust property or other necessary dispositions upon request of an interested person. The same shall also apply where another trustee exists.
(2) Where an administrator of trust property is appointed under paragraph (1), the court may decide on the matters that he/she is obliged to obtain permission from the court.
(3) An administrator of trust property appointed under paragraph (1) shall immediately notify the beneficiary of such appointment.
(4) An administrator of trust property shall have the same rights and duties with the trustee within the extent for which he/she is appointed: Provided, That the same shall not apply to the matters subjected to permission of the court under paragraph (2).
(5) Where an administrator of trust property is appointed under paragraph (1), he/she shall be a party to a litigation concerning the trust property.
(6) The court may, if necessary, pay from the trust property reasonable remuneration to an administrator of trust property appointed under paragraph (1).
 Article 18 (Appointment of Indispensable Administrator of Trust Property)
(1) Where a new trustee has not been appointed or no other trustee exists in any of the following cases, the court shall appoint an administrator of trust property to take custody of the trust property and engage in conduct necessary for handing over the trust affairs:
1. Where an administrator of inherited property has been appointed under Article 1053 (1) of the Civil Act following the death of the trustee;
2. Where the trustee has been declared bankrupt;
3. Where the trustee has resigned from his/her post with permission from the court or has been dismissed by the court for a violation of his/her duties.
(2) Where adjudication on the appointment of an administrator of inherited property, declaration of bankruptcy, permission for resignation or dismissal of a trustee is made in cases falling under any subparagraph of paragraph (1), the court shall appoint an administrator of trust property simultaneously with such adjudication.
(3) Article 17 (3), (5) and (6) shall apply mutatis mutandis to the duty to give notice, qualifications and remuneration for an appointed administrator of trust property.
 Article 19 (Termination of Duties of Administrator of Trust Property)
(1) The duties of an administrator of trust property shall terminate, if a new trustee is appointed or if no interests of the trustee and the beneficiary conflict any longer.
(2) An administrator of trust property may resign from his/her post with permission from the court.
(3) The court may dismiss an administrator of trust property upon request of an interested person.
(4) The court shall appoint a new administrator of trust property simultaneously with making the decision referred to in paragraph (2) or (3).
 Article 20 (Public Announcement and Registration of Administrator of Trust Property)
(1) In any of the following cases, the court shall publicly announce its intent and request ex officio without delay the registration of such intent concerning the registered trust property:
1. Where an administrator of trust property is appointed or any other necessary disposition is ordered under Article 17 (1);
2. Where an administrator of trust property is appointed under Article 18 (1);
3. Where the resignation of an administrator of trust property is determined under Article 19 (2);
4. Where the dismissal of an administrator of trust property is determined under Article 19 (3).
(2) Where the duties of an administrator of trust property are terminated under Article 19 (1), the court shall request the cancellation of registration under paragraph (1) upon request of the new trustee or the trustee who no longer has conflicting interest.
(3) Where the registration under paragraph (1) or (2) is completed differently from the truth intentionally or by negligence, the relevant administrator of trust property or trustee shall not contest against any third person in good faith with the fact that is different from the registration.
 Article 21 (Appointment of New Trustee)
(1) Where the duties of a trustee have been terminated, the truster and the beneficiary may, by agreement or at the sole discretion of the beneficiary if no truster exists, appoint a new trustee: Provided, That the deed of trust shall govern if it prescribes otherwise.
(2) Where no agreement has been reached between the truster and the beneficiary on the appointment of a new trustee, an interested person may request the court to appoint a new trustee.
(3) Paragraph (1) and (2) shall apply mutatis mutandis where a person designated as a trustee by a will fails to, or is unable to, take charge of the trust.
(4) The court may, if necessary, pay from the trust property reasonable remuneration to a trustee appointed under paragraph (2) (including cases applicable mutatis mutandis under paragraph (3)).
CHAPTER III PROPERTY IN TRUST
 Article 22 (Prohibition of Compulsory Execution)
(1) No compulsory execution or auction for exercise, etc. of security rights, conservative measure (hereinafter referred to as "compulsory execution, etc.") or disposition of default on national taxes, etc. may be made against any trust property: Provided, That the same shall not apply where it is based on any right arisen by a cause existing prior to the creation of a trust, or in the course of performing trust affairs.
(2) A truster, beneficiary or trustee may raise an objection against any compulsory execution, etc. made in violation of paragraph (1). In such cases, Article 48 of the Civil Execution Act shall apply mutatis mutandis.
(3) A truster, beneficiary or trustee may raise an objection against the disposition of default on national taxes, etc. made in violation of paragraph (1). In such cases, procedures for raising an objection against the disposition of default on national taxes, etc. shall apply mutatis mutandis.
 Article 23 (Death of Trustee and Trust Property)
No trust property shall belong to the inherited property of a trustee, nor becomes an object of division of property following divorce of a trustee.
 Article 24 (Bankruptcy of Trustee and Trust Property)
No trust property shall constitute the bankruptcy foundation for the trustee, or obligor's property or personal rehabilitation foundation for obligor, the authority of management or disposal of which is held by the administrator of rehabilitation procedure.
 Article 25 (Prohibition of Set-Off)
(1) A claim belonging to the trust property and a debt not belonging to the trust property shall not offset each other: Provided, That the same shall not apply where a third person has been in good faith and has not been negligent in that both the claim and the debt do not belong to the same trust property.
(2) Where any liability for a debt belonging to trust property is limited to the trust property, a claim not belonging to the trust property and a debt belonging to the trust property shall not offset each other: Provided, That the same shall not apply where a third person has been in good faith and has not been negligent in that both the claim and the debt do not belong to the same trust property.
 Article 26 (Special Provisions concerning Confusion over Trust Property)
No rights shall be extinguished by confusion, if:
1. The ownership and any other real right to one and the same thing devolves respectively on the trust property and the inherent property, or to each different piece of trust property;
2. A real right, other than ownership, and a right aimed thereat devolves respectively on the trust property and the inherent property, or to each different piece of trust property;
3. A debt against the trust property devolves on the trustee or where a claim against the trustee devolves on the trust property.
 Article 27 (Scope of Trust Property)
Property acquired by a trustee by the management, disposal, operation, development, or demolition of the trust property or other grounds shall belong to the trust property.
 Article 28 (Adjunction to Trust Property)
Articles 256 through 261 of the Civil Act shall apply mutatis mutandis to any adjunction, mixture or fabrication among things belonging to the trust property, inherent property or each different piece of trust property deeming that it belongs respectively to each different owners: Provided, That if a fabricator is in bad faith, the court may devolve the thing created by the fabrication on the owner of the raw materials, even if the increment of the value by such fabrication exceeds the value of the raw materials.
 Article 29 (Presumption of Devolvement of Trust Property)
(1) Where the relationship of devolvement between trust property and inherent property is indistinguishable, the relevant property shall be presumed to belong to the trust property.
(2) Where the relationship of devolvement between each different piece of trust property is indistinguishable, the relevant property shall be presumed to devolve equally on each trust property.
 Article 30 (Succession of Fault in Possession)
The trustee shall succeed to any fault in possession of the truster with respect to the possession of trust property.
CHAPTER IV RIGHTS AND DUTIES OF TRUSTEES
 Article 31 (Authority of Trustee)
A trustee shall, as the subject to whom the rights and duties concerning the trust property belongs, have the authority to perform the management, disposal, etc. of trust property and to engage in all conduct necessary to fulfill the purpose of the trust: Provided, That such authority may be restricted by the deed of trust.
 Article 32 (Duty of Trustee for Due Fiduciary Care)
A trustee shall perform trust affairs with due fiduciary care as required of a good administrator: Provided, That the deed of trust shall govern if it prescribes otherwise.
 Article 33 (Duty of Loyalty)
A trustee shall perform trust affairs solely in the interests of the beneficiaries.
 Article 34 (Prohibition of Conduct against Interests)
(1) No trustee shall engage in any of the following conducts in whosoever’s name:
1. Converting the trust property to the inherent property or devolving the right to the trust property on the inherent property;
2. Converting the inherent property to the trust property or devolving the right to the inherent property on the trust property;
3. Devolving one of the trust property or the right thereto on the trust property of other trust, where a number of trusts are taken charge of;
4. Representing a third person in a conduct concerning a third person's trust property;
5. Other conduct against the interest of the beneficiary.
(2) Notwithstanding paragraph (1), a trustee may, in any of the following cases, engage in the conduct prescribed in the subparagraphs of paragraph (1): Provided, That in cases falling under subparagraph 3, a trustee shall notify the beneficiary of the relevant fact simultaneously with applying for permission to the court:
1. Where it is permitted by the deed of trust;
2. Where the fact related to such conduct is notified to, and the approval thereof is obtained from, the beneficiary;
3. Where permission is obtained from the court.
(3) Notwithstanding paragraph (1), a beneficiary may comprehensively succeed to the right to trust property unless it is based on the intention of the trustee, such as inheritance. In such cases, Article 26 shall apply mutatis mutandis to confusion over the relevant property.
 Article 35 (Duty of Impartiality)
Where a number of beneficiaries exist, the trustee shall impartially perform the trust affairs for each beneficiary: Provided, That the deed of trust shall govern if it prescribes otherwise.
 Article 36 (Prohibition against Enjoyment of Benefit by Trustee)
No trustee may enjoy any benefit of the trust in whosoever’s name: Provided, That the same shall not apply where the trustee is one of the joint beneficiaries.
 Article 37 (Duty of Trustee for Separate Management)
(1) A trustee shall manage the trust property separately from his/her inherent property and indicate the fact that it is trust property.
(2) A trustee who has taken charge of a number of trusts shall separately mange each piece of trust property and indicate that each piece of trust property is different from each other.
(3) Where the trust property under paragraph (1) or (2) is money or any other substitute, it may be managed separately by ensuring the clear management of relevant accounting.
 Article 38 (Limited Liability)
A trustee shall be liable for the debt to the beneficiary incurred by the deed of trust, only by the trust property.
 Article 39 (Duty to Prepare, Preserve and Keep Documents, including Books)
(1) A trustee shall keep books and other documents related to the trust affairs and ensure the clear performance and accounting of the affairs pertaining to each trust.
(2) A trustee shall prepare a list of property of each trust at the time he/she takes charge of the trust, and at a fixed time once each year: Provided, That the deed of trust shall govern if it prescribes otherwise concerning the timing of preparation.
(3) A trustee shall preserve the books, lists of property and other documents referred to in paragraphs (1) and (2) for a period prescribed by Presidential Decree.
(4) Where books, lists of property and other documents are preserved pursuant to paragraph (3), the method of preservation and other necessary matters shall be prescribed by Presidential Decree.
 Article 40 (Inspection of Documents)
(1) A truster or beneficiary may request an inspection or reproduction of the books and other documents pertaining to, or seek an explanation on, the performance or the accounting of the trust affairs, from the trustee or administrator of trust property.
(2) Any interested person, other than the truster or beneficiary, may request an inspection or reproduction of the books and other documents pertaining to the accounting of the trust affairs, such as a list of property of the trust, from the trustee or administrator of trust property.
 Article 41 (Method of Managing Money)
Money belonging to the trust property shall be managed in the following manner, unless otherwise expressly prescribed by the deed of trust:
1. Subscription for, underwriting or purchase of, national or local bonds, or debentures of a corporation incorporated under the special Acts;
2. Loans secured by a national bond, or other securities referred to in subparagraph 1;
3. Bank deposits or postal savings.
 Article 42 (Delegation of Trust Affairs)
(1) With the consent of the beneficiary, a trustee may require another person to perform the trust affairs on behalf of himself/herself for a justified ground: Provided, That the deed of trust shall govern if it prescribes otherwise.
(2) A trustee shall be liable only for the appointment and supervision in cases falling under the main sentence of paragraph (1). The same shall also apply where the deed of trust stipulates that the trust affairs be performed by another person.
(3) Any person who performs the trust affairs on behalf of a trustee shall bear the same liability as the trustee.
 Article 43 (Trustees’ Duty to Reinstate)
(1) Where a trustee has violated his/her duties incurring any loss to the trust property, the truster, beneficiary, or other trusters where a number of trustees exist, may request the relevant trustee to reinstate the trust property: Provided, That where it is impossible or substantially impracticable to reinstate the trust property, or excessive expenses are incurred in such reinstatement, or where any special ground exists making reinstatement inappropriate, a claim for damages may be raised.
(2) Paragraph (1) shall also apply where any change occurs to the trust property due to a violation of duty by the trustee.
(3) Where a trustee has violated any duty prescribed in Articles 33 through 37, he/she shall return all the benefit acquired therefrom by himself/herself or a third person to the trust property, even if no loss has incurred to the trust property.
 Article 44 (Special Provisions on Violation of Duty of Separate Management)
Where a trustee incurs any loss to the trust property due to a violation of the duty of separate management prescribed in Article 37, the trustee shall not be exempted from the responsibilities, unless he/she proves that the loss must have been incurred even if he/she managed it separately.
 Article 45 (Responsibilities of Directors of Trustee Corporation)
If a trustee corporation takes the responsibility pursuant to Article 43 or 44, a director or equivalent person who has involved in the violation of duty that is causative of the liability shall assume a joint and several responsibility therefor.
 Article 46 (Rights to Claim Reimbursement of Expenses)
(1) A trustee may pay expenses incurred in relation to the performance of trust affairs from the trust property.
(2) Where a trustee has paid expenses incurred in relation to the performance of trust affairs from the inherent property, he/she may be reimbursed for the expenses paid and the interest accrued from the date of payment.
(3) Paragraphs (1) and (2) shall also apply where a trustee bears a debt or suffers a loss, without his/her own negligence, for the performance of trust affairs.
(4) When trust property is likely to be insufficient to appropriate expenses incurred in relation to the performance of trust affairs, the trustee may request the beneficiary to pay the expenses or to provide a security corresponding thereto within the extent of the benefit he/she has acquired: Provided, That the same shall not apply where no beneficiary is specified or exists, or where the beneficiary renounces the right to benefit.
(5) Paragraph (4) shall also apply where trust property is insufficient for indemnifying a loss that a trustee suffers, without his/her negligence, for the performance of trust affairs.
(6) Where a deed of trust prescribes otherwise concerning the matters prescribed in paragraphs (1) through (5), such matters shall be governed by the deed of trust.
 Article 47 (Rights to Claim Remuneration)
(1) A trustee shall be entitled to remuneration only if the deed of trust prescribes to pay it: Provided, That a trustee who conducts a trust business shall be entitled to remuneration even where no expression provisions thereon are stipulated by the deed of trust.
(2) Where no amount of remuneration or the method of calculation is determined, a trustee may receive a reasonable amount of remuneration in the light of the nature and details of trust affairs.
(3) Where the remuneration referred to in paragraph (1) becomes unreasonable in the light of the nature and details of trust affairs due to a change in circumstances, the court may, upon request of the truster, beneficiary or trustee, increase or decrease the remuneration for the trustee.
(4) Article 46 (4) shall apply mutatis mutandis to remuneration for a trustee: Provided, That the deed of trust shall govern, if it prescribes otherwise.
 Article 48 (Preferential Payment Rights for Rights to Claim Reimbursement of Expenses)
(1) In civil execution proceedings or in proceedings for public sale under the National Tax Collection Act with respect to trust property, a trustee shall have the right to be reimbursed for expenses or profitable expenses incurred in the preservation or improvement of trust property in accordance with the purpose of the trust, in preference to the beneficiary or any other obligee.
(2) Based on the right to claim the reimbursement of expenses under Article 46 or the right to claim remuneration under Article 47, a trustee may sell trust property and appropriate proceeds therefrom for appropriating the settlement of claims: Provided, That the same shall not apply if the purpose of the trust becomes unachievable through the sale of the trust property or if any probable cause exists.
 Article 49 (Requirements for Exercise of Rights)
No trustee shall be entitled to exercise his/her right prescribed in Article 46 or 47, unless he/she performs his/her duty to reinstate trust property, etc. under Article 43 or 44.
 Article 50 (Joint Trustees)
(1) If a number of trustees exist, the trust property shall be under their partnership-ownership.
(2) In cases falling under paragraph (1), if a duty of a person among trustees terminates, the trust property shall naturally devolves on other trustees.
(3) In cases falling under paragraph (1), the trust affairs shall be performed jointly by trustees unless otherwise prescribed by a deed of trust: Provided, That any preservation act may be done individually.
(4) Where a number of trustees exist, any declaration of intention made to one trustee shall also have the same effect to other trustees.
(5) Where a number of trustees exist, a trustee to perform the duties of other trustees on behalf of them may be appointed by a deed of trust.
 Article 51 (Joint and Several Liability of Joint Trustees)
(1) Where a number of trustees exist, they shall be jointly and severally liable to pay the debt to a third person relating to the performance of trust affairs.
(2) Where a number of trustees exist, the trustees who have not been involved in a violation of duty shall not be liable for bearing a debt incurred in relation to the violation by some trustees: Provided, That the same shall not apply if they fail to take reasonable measures to deter such violation of duty committed by other trustees.
 Article 52 (Rights of New Trustees, etc. to Claim Reinstatement)
A new trustee or an administrator of trust property shall also be entitled to exercise the right prescribed in Article 43.
 Article 53 (Succession of Liabilities by New Trustee)
(1) Where a trustee is replaced, the new trustee shall succeed to the debt incurred by the former trustee to the beneficiary by the deed of trust. If a number of trustees exist, the same shall also apply where some of them are replaced.
(2) Any claim arising in relation to the performance of trust affairs may also be exercised to the new trustee within the limits of the trust property.
(3) The proceedings for compulsory execution, etc. or for disposition of default on national taxes, etc. against trust property under the proviso to Article 22 (1) may be continuously processed against a new trustee.
 Article 54 (Preferential Payment Rights of Former Trustees)
(1) Articles 48 (1) and 49 shall apply mutatis mutandis to the preferential payment right of a former trustee.
(2) A former trustee may retain trust property until he/she receives the payment for claims based on the right to claim under Article 46.
 Article 55 (Transfer of Affairs)
(1) When a trustee is replaced, the former trustee and other related persons shall conduct accounting of the trust affairs and transfer the affairs to a new trustee in the presence of the beneficiary.
(2) Where a beneficiary approves the accounting referred to in paragraph (1), the liabilities of the former trustee or other related persons against the beneficiary shall be deemed exempted: Provided, That the same shall not apply where there has been any misconduct.
CHAPTER V RIGHTS AND DUTIES OF BENEFICIARIES
SECTION 1 Acquisition and Renunciation of Rights to Benefit
 Article 56 (Acquisition of Rights to Benefit)
(1) A person designated as a beneficiary as prescribed by a deed of trust (including a person designated as a beneficiary pursuant to Article 58 (1) or (2)) shall naturally acquire the right to benefit: Provided, That the deed of trust shall govern, if it prescribes otherwise.
(2) A trustee shall, without delay, notify a person designated as a beneficiary under paragraph (1) of the designation: Provided, That the timing of the notification may be otherwise prescribed by a deed of trust except in cases where any burden is laid on the right to benefit.
 Article 57 (Renunciation of Rights to Benefit)
(1) A beneficiary may declare to the trustee his/her intention to renounce the right to benefit.
(2) Where a beneficiary declares his/her intention to renounce the right to benefit under paragraph (1), he/she shall be deemed to have had no right to benefit originally: Provided, That such declaration shall not infringe on any third person's right.
 Article 58 (Rights, etc, to Designate Beneficiaries)
(1) A person who has the right to designate or replace a beneficiary (hereinafter referred to as "right to designate a beneficiary, etc.") may be prescribed by a deed of trust.
(2) A person with the right to designate a beneficiary, etc. may exercise his/her right by means of declaration of his/her intention or a will to a trustee.
(3) Where the right to designate a beneficiary, etc. was exercised by a will and the trustee has not been aware of such fact, a person who has become the beneficiary thereby shall not contest against the trustee with such fact.
(4) Where a beneficiary has lost the right to benefit due to the exercise of the right to replace a beneficiary, the trustee shall, without delay, notify the person who has lost the right to benefit of such fact: Provided, That the deed of trust shall govern if it prescribes otherwise.
(5) No right to designate a beneficiary, etc. shall be inherited unless otherwise prescribed by the deed of trust.
 Article 59 (Trusts as Will Substitutes)
(1) The truster shall have the right to replace the beneficiary of any of the following trusts: Provided, That the deed of trust shall govern, if it prescribes otherwise:
1. A trust under which a person would be designated as a beneficiary acquires the right to benefit at the time the trustee dies;
2. A trust under which the beneficiary receives a benefit on the basis of trust property after the death of the truster.
(2) No beneficiary falling under paragraph (1) 2 shall exercise the right as a beneficiary until the truster dies: Provided, That the deed of trust shall govern, if it prescribes otherwise.
 Article 60 (Trusts with Successive Beneficiaries)
A deed of trust may prescribe the purport that, where a beneficiary dies, the right to benefit held by him/her be extinguished and that another person newly acquires the right to benefit. In such cases, it shall include cases where other persons acquire the right to benefit in succession by the death of the beneficiary.
SECTION 2 Exercise of Rights to Benefit
 Article 61 (No Restrictions on Rights to Benefit)
None of the following rights of a beneficiary shall be restricted even by a deed of trust:
1. A right to file a claim with the court under this Act;
2. A right to raise an objection against any compulsory execution, etc. or the disposition of default on national taxes, etc. under Article 22 (2) or (3);
3. A right to request an inspection or reproduction of books, etc. under Article 40 (1);
4. A right to request reinstatement, compensation for losses, etc. under Article 43 or 45;
5. A right to renounce the right to benefit under Article 57 (1);
6. A right to revoke a legal act committed in violation of a trust, under Article 75 (1);
7. A right to demand a halt under Article 77;
8. A right to request the purchase of the right to benefit under Article 89, 91 (3) or 95 (3);
9. Other rights prescribed by Presidential Decree as necessary for the protection of beneficiaries in the light of the nature of trusts.
 Article 62 (Relationship between Beneficiary Claims and Trust Claims)
A trust claim shall have precedence over the beneficiary's right to claim the trustee to transfer the property that belongs to the trust property and to request for other benefit based on the trust property (hereinafter referred to as "beneficiary claim").
 Article 63 (Extinctive Prescription of Beneficiary Claims)
(1) The extinctive prescription of a beneficiary claim shall coincide with that of a bond.
(2) Notwithstanding paragraph (1), the extinctive prescription of a beneficiary claim shall commence at the time the beneficiary becomes aware that he/she has become a beneficiary.
(3) Notwithstanding paragraph (1), the extinctive prescription of a beneficiary claim shall not be completed within six months from the termination of the trust.
SECTION 3 Transfer of Rights to Benefit
 Article 64 (Transferability of Rights to Benefit)
(1) A beneficiary may transfer his/her right to benefit: Provided, That the same shall not apply where the nature of the right to benefit does not allow it.
(2) Notwithstanding paragraph (1), the transfer of right to benefit shall be governed by the deed of trust if it prescribes otherwise: Provided, That none of such provisions shall contest against any third person in good faith.
 Article 65 (Requirements for Contest against Transfer of Rights to Benefit and Protest of Trustees)
(1) The transfer of the right to benefit may be contested against the trustee and a third person, only if:
1. The transferor has given notice of transfer to the trustee;
2. The trustee has accepted the transfer.
(2) No notice or acceptance under the subparagraphs of paragraph (1) shall be contested against any third person, other than the trustee, unless it is given or made by a deed with a fixed date.
(3) A trustee may contest against a transferee with a ground arisen to the transferee until the notice or acceptance referred to in the subparagraphs of paragraph (1) is given or made.
(4) Where a trustee fails to withhold an objection and accepts the transfer under paragraph (1) 2, he/she shall not contest against the transferee with the ground opposable to the transferor: Provided, That if any benefit has been provided to the transferor to extinguish a debt, he/she may collect it, and, where a trustee has born any debt to the transferor, he/she may insist upon the failure of incurrence thereof.
 Article 66 (Pledges against Rights to Benefit)
(1) A beneficiary may establish a pledge on the right to benefit as the object thereof: Provided, That the same shall not apply where the nature of the right to benefit does not allow the establishment of a pledge.
(2) Notwithstanding paragraph (1), the establishment of a pledge on the right to benefit as the object thereof shall be governed by the deed of trust where it prescribes otherwise: Provided, That none of such provisions shall contest against any third person in good faith.
(3) Article 65 concerning the requirements for contest against the transfer of the rights to benefit and the protest of trustees shall apply mutatis mutandis to the establishment of a pledge on the right to benefit as the object thereof. In such cases, "transferor" and "transferee" referred to in Article 65 shall be construed as "beneficiary" and "pledgee", respectively, and "fact that the right of benefit has been taken over" shall be construed as "fact that a pledge has been established on the right to benefit."
(4) A pledge on the right to benefit as the object thereof shall exist in the beneficiary claim based on the relevant right to benefit and the money or other property receivable by the beneficiary as a substitute for the relevant right of benefit under this Act or the deed of trust.
(5) A pledgee of the right to benefit may accept money directly from the trustee and appropriate it to reimburse his/her claim, taking precedence over other obligees.
(6) Where a claim of a pledgee has not arrived at the maturity date, the pledgee may request the trustee to deposit the amount to be reimbursed. In such cases, the pledge shall exist in the deposit.
SECTION 4 Trust Administrators
 Article 67 (Appointment of Trust Administrators)
(1) Where no beneficiary is specified or exists, the court may appoint a trust administrator either ex officio or upon request of the truster or any other interested person: Provided, That where a trust administrator is designated by a deed of trust, such designation shall govern.
(2) If a beneficiary is a minor, quasi-incompetent or incompetent, or is unable to properly supervise a trustee due to any other reason, the court may appoint a trust administrator upon request of an interested person or ex officio: Provided, That the deed of trust shall govern, if it prescribes otherwise.
(3) Where a number of beneficiaries exist, the beneficiaries may appoint a trust administrator in accordance with the decision made by the method prescribed in Article 71. The same shall also apply where there are several kinds of rights to benefit, the contents of which are different from each other and there exist a number of beneficiaries who have the same kinds of rights to benefit (hereinafter referred to as "beneficiaries of a kind").
(4) The court may pay from the trust property reasonable remuneration to the trust administrator appointed pursuant to paragraph (1) or (2), where necessary.
 Article 68 (Authority of Trust Administrators)
(1) A trust administrator shall be entitled to engage in all judicial or extrajudicial act concerning the right of a beneficiary, in his/her name, for the interests of the beneficiary or to fulfill the purpose of the purpose trust: Provided, That, he/she shall not contest against the trustee, if his/her appointment has not been notified to the trustee.
(2) A trust administrator shall be deemed to have the same status as the beneficiary in relation to the trust.
(3) Where a number of trust administrators are appointed pursuant to Article 67 (1), they shall jointly perform the affairs unless otherwise prescribed by the deed of trust.
(4) Where trust administrators are appointed respectively for each beneficiary under Article 67 (2), each trust administrator shall perform the affairs independently for the relevant beneficiary. In such cases, a number of trust administrators appointed for an individual beneficiary shall perform the affairs jointly for the relevant beneficiary.
(5) Where a number of trust administrators are appointed under the former part of Article 67 (3), they shall jointly perform the affairs unless otherwise prescribed at the time they are appointed.
(6) A trust administrator appointed under the latter part of Article 67 (3) shall independently perform the affairs solely for the beneficiaries of a kind who have appointed him/her.
(7) Even where a trust administrator has been appointed under Article 67 (3), the beneficiaries may perform the affairs by the method prescribed in Article 71.
 Article 69 (Completion of Duties of Trust Administrators)
(1) The duties of a trust administrator appointed under Article 67 (1) shall be completed when the beneficiary becomes specified or existent.
(2) The duties of a trust administrator appointed under Article 67 (2) shall be completed in any of the following circumstances:
1. Where a minor beneficiary reaches the age of majority;
2. Where a beneficiary is adjudged the revocation of the declaration of quasi-incompetence or incompetence;
3. Other cases where a beneficiary recovers the ability to supervise the trustee.
(3) Where the duties of a trust administrator are completed under paragraph (1) or (2), the beneficiary or the trust administrator shall not contest against the trustee unless he/she notifies the trustee of the completion of the duties of the trust administrator.
 Article 70 (Completion of Duties of Trust Administrators by Resignation or Dismissal)
(1) Unless otherwise prescribed as at the time of appointment of a trust administrator, he/she cannot resign upon obtaining approval from the court or the beneficiary that has appointed him/her as the trust administrator.
(2) Notwithstanding paragraph (1), a trust administrator may resign from his/her post for a justified ground upon obtaining permission from the court.
(3) Articles 14 (3) and 15 shall apply mutatis mutandis to the duty to give notice, and continuous management of affairs by, the resigned trust administrator.
(4) The court or beneficiary who has appointed a trust administrator may dismiss the trust administrator at any time: Provided, That where the beneficiary dismisses him/her at a time disadvantageous to the trust administrator without any justifiable ground, the beneficiary shall compensate for the loss.
(5) Article 16 (4) and (5) shall apply mutatis mutandis to the duty to give notice, and continuous management of affairs by, the dismissed trust administrator.
(6) The court shall appoint a new trust administrator simultaneously with making a decision to permit the resignation of a trust administrator or to dismiss him/her for a violation of duties. In such cases, a newly appointed trust administrator shall immediately notify the beneficiary of such fact.
(7) In cases falling under paragraph (1), (2), (4), or (6), unless such fact as the resignation or dismissal of the existing administrator or the appointment of a new trust administrator has been notified to the trustee, the beneficiary, trust administrator or other interested persons shall not contest against the trustee with such fact.
SECTION 5 Decision-Making by a Number of Beneficiaries
 Article 71 (Decision-Making by a Number of Beneficiaries)
(1) Under a trust where a number of beneficiaries exist, a decision on the intent of beneficiaries shall be made by unanimous agreement of the beneficiaries: Provided, That the rights prescribed in the subparagraphs of Article 61 may be individually exercised by each beneficiary.
(2) Articles 72 through 74 shall govern where a deed of trust prescribes to have beneficiaries' meetings.
(3) Notwithstanding the main sentence of paragraph (1) and paragraph (2), the deed of trust shall govern if it prescribes otherwise.
 Article 72 (Call for Beneficiaries' Meetings)
(1) A beneficiaries' meeting may be held anytime, if necessary.
(2) A beneficiaries' meeting shall be called by the trustee.
(3) A beneficiary may request a beneficiaries' meeting in writing or by an electronic document, stating the subject matter and reason for calling.
(4) Where a trustee fails to take procedures for calling a beneficiaries' meeting without delay after receipt of the request made under paragraph (3), the beneficiary who has requested a beneficiaries' meeting may call it upon obtaining permission from the court.
(5) A person who calls a beneficiaries' meeting (hereinafter referred to as "convoker") shall notify the beneficiaries and trustee known to him/her, of the date and time, place, and subject matter of the meeting in writing or by an electronic document (only applicable to the beneficiaries who have agreed to receive the relevant information by an electronic document) by not later than two weeks before the date of the meeting.
(6) A convoker shall provide beneficiaries with the documents prescribed by Presidential Decree in a paper form or by an electronic document (only applicable to the beneficiaries who have agreed to receive the relevant information by an electronic document) for their reference in exercising their votes.
 Article 73 (Voting Rights, etc. at Beneficiaries' Meetings)
(1) A beneficiary shall have a voting right at a beneficiaries' meeting as follows:
1. Where the contents of each right to benefit are the same: The number of the right to benefit;
2. Where the contents of each right to benefit are different: The value of the right to benefit at the time the calling of the beneficiaries' meeting is decided.
(2) Where the right to benefit belongs to the trust property of the trust related to the relevant right to benefit, the trustee shall not exercise his/her voting right in such right to benefit.
(3) A beneficiary may exercise his/her voting right in writing or by an electronic document (only applicable to where the convoker has agreed on the exercise of the voting right by an electronic document). In such cases, the procedures for exercising the voting right by an electronic document, such as procedures for confirmation of beneficiaries, and other necessary matters shall be prescribed by Presidential Decree.
(4) Where a beneficiary has two or more voting rights, he/she may choose not to unit them, and exercise each of them separately. In such cases, he/she shall notify in writing or by an electronic document the convoker of such intent and reason therefor by not later than three days before the date of beneficiaries' meeting.
(5) Unless a beneficiary who exercises his/her voting rights without uniting them holds such voting rights for another person, the convoker may disapprove the ununited exercise of voting rights.
(6) A beneficiary may permit his/her agent to exercise his/her voting right. In such cases, the relevant beneficiary or agent shall submit a document certifying the agency authority to the convoker.
(7) A trustee may state his/her opinion either by attending a beneficiaries' meeting or in writing, and where deemed necessary at the beneficiaries' meeting, the attendance of the trustee may be requested by a resolution at the beneficiaries' meeting.
(8) The chairperson at a beneficiaries' meeting shall be appointed by a resolution at a beneficiaries' meeting from among beneficiaries.
 Article 74 (Resolutions at Beneficiaries' Meetings)
(1) A resolution at a beneficiaries' meeting shall require the presence of the beneficiaries corresponding to a majority of exercisable voting rights and the affirmative vote of a majority of the voting rights of the beneficiaries present at the meeting.
(2) Notwithstanding paragraph (1), a resolution at a beneficiaries' meeting on the following matters shall require the presence of the beneficiaries corresponding to a majority of voting rights and the affirmative vote of at least 2/3 of the voting rights of beneficiaries present at the meeting:
1. Agreement on the dismissal of the trustee under Article 16 (1);
2. Agreement on the modification of the purpose of trust, modification of the contents of beneficiary claim and other major modification of the trust, among the modifications of the trust made under Article 88 (1);
3. Approval of a plan for a merger, split-off, or split-merger of the trust under Article 91 (2) or 95 (2);
4. Agreement on the termination of the trust under Article 99 (1);
5. Approval of accounting as at the time of termination of the trust under Article 103 (1).
(3) The convoker of a beneficiaries' meeting shall prepare minutes stating the important matters concerning the proceedings and the results thereof and write his/her name with his/her seal affixed, or put his/her signature.
(4) A resolution at a beneficiaries' meeting shall be binding on all beneficiaries of the relevant trust.
(5) A person who has paid expenses incurred in relation to a beneficiaries' meeting may request the trustee to reimburse them. In such cases, the trustee shall be liable only by the trust property.
SECTION 6 Beneficiary's Right of Revocation and Right to Injunction
 Article 75 (Revocation of Legal Act in Violation of Trust)
(1) Where a trustee has engaged in a legal act concerning the trust property in violation of the purpose of the trust, the beneficiary may revoke such legal act, only when the other party or subsequent purchaser knows such trustee's violation of the purpose of the trust at the time the trustee has engaged in such legal act or is not been aware of such violation by gross negligence.
(2) Where a number of beneficiaries exist, any revocation made under paragraph (1) by any one of the beneficiaries shall also have the same effect to other beneficiaries.
 Article 76 (Limited Period for Right of Revocation)
The right of revocation under Article 75 (1) shall be exercised within three months from the date the beneficiary has known the existence of a cause for revocation or within one year from the date a legal act has been engaged in.
 Article 77 (Right to Injunction against Trustee)
(1) Where a trustee has violated or is likely to violate any matter prescribed by the statutes or by the deed of trust and the relevant violation is likely to incur an unrecoverable loss to the trust property, the beneficiary may put a halt to such violation.
(2) Paragraph (1) shall also apply where, under the trust with a number of beneficiaries, the trustee has violated or is likely to violate any matter prescribed by the statutes or by the deed of trust, and the relevant violation is likely to cause an unrecoverable loss to some beneficiaries.
SECTION 7 Beneficiary Certificates
 Article 78 (Issuance of Beneficiary Certificates)
(1) The intent to issue a beneficiary certificate indicating the right to benefit may be prescribed by a deed of trust. In such cases, the purport not to issue any beneficiary certificate for the right to benefit with specific contents may be prescribed, if the contents of each right to benefit are not the same.
(2) The trustee of a trust with the provisions referred to in paragraph (1) (hereinafter referred to as "trust with beneficiary certificates") shall issue without delay the beneficiary certificates for the relevant right to benefit, as prescribed by the deed of trust.
(3) Beneficiary certificates shall be either registered or non-registered: Provided, That in cases of a trust created with the security right as its trust property, only registered beneficiary certificates shall be issued.
(4) Unless otherwise prescribed by a deed of trust, the beneficiary of the right to benefit for which a beneficiary certificate has been issued may request the trustee to change his/her registered beneficiary certificate to a non-registered beneficiary certificate or his/her non-registered certificate to a registered beneficiary certificate.
(5) The following matters and the serial number shall be stated on a beneficiary certificate, and the trustee (where the trustee is a corporation, referring to the representative thereof) shall write his/her name with his/her seal affixed, or put his/her signature thereon:
1. The purport that it is a beneficiary certificate of a trust with beneficiary certificates;
2. The name or title, and address of the truster and the trustee;
3. In cases of a registered beneficiary certificate, the relevant beneficiary's name or title;
4. The contents of the beneficiary claim concerning each right to benefit and the contents of any other right to benefit;
5. Where any provisions exist in the deed of trust on the beneficiary's liability to pay remuneration, to reimburse expenses, etc., or to compensate for losses, to the trustee under Article 46 (6) or 47 (4), the purport and contents thereof;
6. Where any provisions exist in the deed of trust concerning the exercise of the beneficiary's rights (including the matters concerning the trust administrator), the purport and contents thereof;
7. In cases of limited liability trusts under Article 114 (1), the purport thereof and the title of the trust;
8. Where any provisions exist in the deed of trust concerning the issuance of a trust bond under Article 87, the purport and contents thereof;
9. Other important matters prescribed by Presidential Decree concerning the right to benefit.
(6) A trustee may register beneficiary certificates on the electronic register of an electronic registration agency (referring to an agency designated to deal with the affairs related to electronic registration of securities, etc.) instead of issuing the beneficiary certificates, as prescribed by the deed of trust. In such cases, matters necessary for the electronic registration, etc. of the beneficiary certificates, such as procedures for, methods and effect of the electronic registration, and designation, supervision, etc. of the electronic registration agency, shall be prescribed separately by another Act.
(7) Notwithstanding Article 88 (1), no change from a trust with beneficiary certificates to a trust that is not a trust with beneficiary certificates, or from a trust that is not a trust with beneficiary certificates to a trust with beneficiary certificates may be made.
 Article 79 (Registry of Beneficiaries)
(1) The trustee of a trust with beneficiary certificates shall prepare, without delay, the registry of beneficiaries and enter the following matters therein:
1. Contents of the beneficiary certificates concerning respective rights to benefit, and contents of other rights to benefit;
2. Serial numbers and dates of issuance of the beneficiary certificates concerning respective rights to benefit;
3. The distinction of whether a beneficiary certificate concerning respective right to benefit is a registered or non-registered beneficiary certificate;
4. In cases of a registered beneficiary certificates, the relevant beneficiary's name or title, and address;
5. In cases of a non-registered beneficiary certificate, the quantity of the beneficiary certificates;
6. Dates on which beneficiaries of the registered benefit certificates have acquired their respective rights to benefit;
7. Other matters prescribed by Presidential Decree.
(2) A notification or final demand of a trustee to the truster or pledgee shall be made to the address entered in the registry of beneficiaries or to the address notified by him/her to the trustee: Provided, That in cases of a beneficiary of non-registered beneficiary certificate or the pledgee thereof, a notification or final demand shall be made by all of the following methods:
1. Public announcement in a newspaper distributed nationwide among the general daily newspapers under the Act on the Promotion of Newspapers, etc. (hereinafter referred to as "general daily newspaper") (where the trustee is a corporation, referring to the method of public notice of such corporation);
2. Individual notification or final demand to persons known to the trustee.
(3) A notification or final demand under the main sentence of paragraph (2) shall be deemed to have arrived at the time it normally arrives.
(4) A trustee of a trust with beneficiary certificates may designate the administrator of the registry of beneficiaries and entrust him/her with the preparation, keeping and other affairs of the registry of beneficiaries, as prescribed by the deed of trust.
(5) A trustee of a trust with beneficiary certificates shall keep the registry of beneficiaries at his/her principal office (where any administrator of registry of beneficiaries under paragraph (4) exists, referring to the administrator's office).
(6) A truster, beneficiary or any other interested person may demand an inspection or reproduction of the registry of beneficiary at any time during the business hours. In such cases, the trustee or administrator of registry of beneficiaries shall comply with the demand unless any justifiable ground exists.
 Article 80 (Non-Possession of Beneficiary Certificates)
(1) Where it is determined to issue a registered beneficiary certificate for the right to benefit, the relevant beneficiary may report to the trustee his/her intention not to possess the certificate thereof: Provided, That the deed of trust shall govern if it prescribes otherwise.
(2) Upon receipt of a report under paragraph (1), the trustee shall, without delay, specify the purport not to issue a beneficiary certificate in the registry of beneficiaries and notify the beneficiary of such fact. In such cases, the trustee shall not issue the beneficiary certificate.
(3) In cases falling under paragraph (1), if any beneficiary certificate has been already issued, it shall be submitted to the trustee, and the beneficiary certificate submitted to the trustee shall become null and void when the purport referred to in paragraph (2) is specified.
(4) Even a truster who has filed a report under paragraph (1) may, at any time, request the trustee to issue a beneficiary certificate.
 Article 81 (Transfer of Right to Benefit of Trust with Beneficiary Certificates)
(1) In cases of a trust with beneficiary certificates, when the right to benefit, for which it is determined to issue a beneficiary certificate that indicates the right to benefit, is transferred, a beneficiary certificate indicating the relevant right to benefit shall be issued.
(2) No transfer of the right to benefit indicated by a registered beneficiary certificate shall be contested against the trustee unless the acquisitor's name or title, and address are entered in the registry of beneficiaries.
(3) In cases of a trust with beneficiary certificates for which the purport not to issue a beneficiary certificate for a specific right to benefit is determined, the transfer of the relevant right to benefit shall not be contested against the trustee or a third person unless the acquisitor's name or title, and address are entered in the registry of beneficiaries.
(4) In cases of the right to benefit of a trust with beneficiary certificates for which it is determined to issue a beneficiary certificate indicating the right to benefit, the transfer of the right to benefit before the issuance of the beneficiary certificate shall not be binding upon the trustee: Provided, That the same shall not apply if six months elapse from the date set for the issuance of the beneficiary certificate.
 Article 82 (Presumption of Right of Beneficiary Certificate and Bona Fide Acquisition)
(1) A possessor of a beneficiary certificate shall be presumed to be a lawful holder.
(2) Article 21 of the Check Act shall apply mutatis mutandis to a beneficiary certificate.
 Article 83 (Pledge against Right to Benefit of Trust with Beneficiary Certificates)
(1) In cases of a trust with beneficiary certificates, when the right to benefit is the object of a pledge, a beneficiary certificate indicating such right to benefit shall be issued to the pledgee.
(2) Unless a pledgee to whom a beneficiary certificate has been issued under paragraph (1) continues to possess the beneficiary certificate, he/she shall not contest against the trustee or a third person with the relevant pledge.
(3) In cases of a trust with beneficiary certificates for which the purport not to issue beneficiary certificates for a specific right to benefit is determined, the pledge against the relevant right to benefit shall not be contested against the trustee or a third person unless the pledgee's name or title, and address are entered in the registry of beneficiaries.
(4) In cases of the right to benefit of a trust with beneficiary certificates for which it is determined to issue a beneficiary certificate indicating the right to benefit, the creation of a pledge against the right to benefit before the issuance of the beneficiary certificate shall not be binding upon the trustee: Provided, That the same shall not apply, if six months elapse from the date set for the issuance of the beneficiary certificate.
 Article 84 (Base Date)
(1) The trustee of a trust with beneficiary certificates may, in order to determine the persons who shall exercise a specific right as beneficiaries of the registered beneficiary certificates, presume the beneficiaries entered in the registry of beneficiaries on a fixed date (hereinafter referred to as "base date") to be the beneficiaries entitled to exercise such right.
(2) The base date shall be set on date that falls within three months before the date of exercise of the right as a beneficiary.
(3) A trustee who has set the base date shall publish it in a general daily newspaper not later than two weeks before the relevant date: Provided, That where the trustee is a corporation, it shall follow the method of public notice of the relevant corporation.
(4) Paragraphs (1) through (3) shall not apply, if a deed of trust prescribes otherwise.
 Article 85 (Exercise of Rights When Beneficiary Certificates Have Been Issued)
(1) No person who holds a non-registered beneficiary certificate shall exercise the right of a beneficiary against the trustee or any third person unless he/she presents the relevant beneficiary certificate.
(2) Where the right to benefit from a trust with beneficiary certificates is possessed jointly by a number of persons, the co-possessors shall designate one person to exercise their rights for such right to benefit (including the authority to receive notifications or final demands from the trustee) and inform the trustee thereof.
(3) Where no notification is made under paragraph (2), co-possessors shall be prohibited from exercising their rights for the relevant right to benefit, and any notification or final demand to the co-possessors may be made to any one of the co-possessors.
(4) Where there exist a number of beneficiaries of a trust with beneficiary certificates, the decision-making (excluding the matters concerning the exercise of the rights under the subparagraphs of Article 61) of beneficiaries shall be done at the beneficiaries' meeting in accordance with Articles 72 through 74: Provided, That the deed of trust shall govern, if it prescribes otherwise.
(5) In cases of a trust with beneficiary certificates, the truster shall not exercise the following rights:
1. The right of dismissal and right of appointment under Articles 16 (1) and 21 (1);
2. The right to request under Articles 16 (3), 67 (1), 88 (3) and 100;
3. The right to demand an inspection or reproduction, or right to demand an explanation under Article 40 (1);
4. The right to demand an inspection or reproduction under Article 79 (6).
(6) Notwithstanding the proviso to Article 71 (1), in cases of a trust with beneficiary certificates, any of the following purports may be prescribed by a deed of trust:
1. That only the beneficiaries holding the right to benefit of at least three percent of the voting rights of all beneficiaries (where the proportion of less than three percent is prescribed by the deed of trust, referring to such prescribed proportion) are entitled to exercise the relevant right:
(a) The right to demand an inspection or reproduction, or right to demand an explanation under Article 40 (1);
(b) The right of revocation under Article 75 (1);
(c) The right to request a modification of trust under Article 88 (3);
(d) The right to request an order to terminate a trust under Article 100;
2. That only the beneficiaries who have been continuously holding the right to benefit since six months ago (where a shorter period is prescribed by the deed of trust, referring to such shorter period) shall be entitled to exercise the right to injunction under Article 77 (1).
(7) Articles 46 (4) through (6) and 47 (4) shall not apply to a trust with beneficiary certificates: Provided, That the deed of trust shall govern, if it prescribes otherwise.
 Article 86 (Loss of Beneficiary Certificates)
(1) A beneficiary certificate may become null and void following the procedures of a public summons.
(2) No person who has lost his/her beneficiary certificate may request the trustee to reissue the beneficiary certificate unless the judgment of nullification is rendered.
CHAPTER VI TRUST BONDS
 Article 87 (Trust Bonds)
(1) A deed of trust may prescribe that the trustee may issue a bond for the trust, if the following requirements are fully satisfied:
1. It shall be a trust with beneficiary certificates;
2. It shall be a limited liability trust under Article 114 (1);
3. The trustee shall be a stock company under the Commercial Act or a person entitled to issue bonds under other Acts.
(2) A trustee who issues a bond pursuant to paragraph (1) shall enter the following matters in the subscription form for the bond, the bond, and the bond register:
1. The purport that the relevant bond is issued for the trust;
2. Matters necessary to specify the trust referred to in subparagraph 1;
3. The purport that the performance liability for the relevant bond shall be limited only to the trust property.
(3) The limit on the total amount of bonds shall be prescribed by Presidential Decree.
(4) Except as otherwise expressly provided for in this Act, Article 396 and Section 8 of Chapter IV of Part III of the Commercial Act (excluding Article 469 of the same Act) shall apply mutatis mutandis to matters concerning the issuance of bonds under paragraph (1).
CHAPTER VII MODIFICATION OF TRUSTS
 Article 88 (Modification of Trusts upon Agreement, etc. of Parties to Trusts)
(1) A trust may be modified upon agreement of the truster, the trustee and the beneficiary: Provided, That the deed of trust shall govern, if it prescribes otherwise.
(2) No modification of trust under paragraph (1) shall impair the legitimate interests of any third person.
(3) Where any special circumstances unexpected as at the time of deed of trust occur, the truster, beneficiary or trustee may request the court to modify the trust.
(4) No modification shall be made from a purpose trust to a trust for the interests of beneficiary, or from a trust for the interests of the beneficiary to a purpose trust.
 Article 89 (Right of Opposing Beneficiary to Request Purchase of Right to Benefit)
(1) A beneficiary who opposes a modification of any of the following matters may request the trustee to purchase the right to benefit, in writing, within 20 days from the date on which the trust is modified:
1. Purpose of the trust;
2. Contents of the beneficiary claim;
3. Matters for which the right to request the purchase of the right to benefit is acknowledged by the deed of trust.
(2) A trustee shall make payments for the right to benefit purchased, within two months after receipt of the request made under paragraph (1).
(3) The purchase price of the right to benefit under paragraph (2) shall be determined by an agreement between the trustee and the beneficiary.
(4) Where the agreement referred to in paragraph (3) is not reached within 30 days from the date a request is made under paragraph (1), the trustee or the beneficiary who has requested the purchase of the right to benefit may request the court to set the purchase price.
(5) The court shall calculate a fair price considering the status of trust property or other circumstances when setting the purchase price of the right to benefit pursuant to paragraph (4).
(6) A trustee shall pay interest on the purchase price set by the court from the day following the expiration of the period prescribed in paragraph (2).
(7) In cases of a debt against a request for purchase of the right to benefit, the trustee shall be liable only by the trust property: Provided, That where the deed of trust or agreement on the modification of trust prescribes otherwise, such provisions shall govern.
(8) Where a trustee has acquired the right to benefit at the request made under paragraph (1), the right to benefit shall be extinguished: Provided, That where the deed of trust or agreement on the modification of trust prescribes otherwise, such provisions shall govern.
 Article 90 (Merger of Trusts)
A number of trusts, the trustee of which is the same person, may be made to one trust.
 Article 91 (Plans for Merger of Trusts)
(1) Where a merger of trusts is intended, the trustee shall prepare a merger plan stating the following matters:
1. Intent of the merger of trusts;
2. Contents of the deed of trust after the merger of trusts;
3. Where any modification is made to the contents of the right to benefit prescribed by the deed of trust, the contents of, and the grounds for, such modification;
4. Where money and any other property are delivered to the beneficiary as at the time of the merger of trusts, the details and price of such property;
5. Effective date of the merger of trusts;
6. Other matters prescribed by Presidential Decree.
(2) The trustee shall obtain approval for the merger plan prepared under paragraph (1) from the truster and the beneficiary for each trust: Provided, That the deed of trust shall govern, if it prescribes otherwise.
(3) A beneficiary who disapproves the merger plan prepared under paragraph (1) may request the trustee to purchase the right to benefit, in writing, within 20 days from the date of approval for the merger plan. Article 89 (2) through (8) shall apply mutatis mutandis to such cases.
 Article 92 (Public Announcement of Merger Plans and Protection of Obligees)
(1) A trustee shall publicly announce the following matters in a general daily newspaper (where the trustee is a corporation, it shall conform to the method of public announcement of the relevant corporation) within two weeks from the date on which the merger plan of the trust is approved, and shall notify each obligee of the trust property known to him/her of the same. In cases falling under subparagraph 2, the fixed period shall be at least one month:
1. The merger plan;
2. The purport that an obligee is entitled to file an objection within a fixed period;
3. Other matters prescribed by Presidential Decree.
(2) Unless an obligee files an objection within the period prescribed in paragraph (1), he/she shall be deemed to have approved the merger.
(3) Where any obligee files an objection, the trustee shall make reimbursement or provide an adequate security to the obligee, or deposit an adequate security with the trust company for such purpose: Provided, That the same shall not apply where the merger of trusts is not likely to be prejudicial to the obligee.
 Article 93 (Effect of Merger)
The rights and obligations belonging to the trust property before the merger shall exist in the trust property after the merger.
 Article 94 (Split-Off, and Split-Merger of Trust)
(1) Part of the trust property may be split off and made to the trust property of a new trust, the trustee of which is the same person.
(2) Part of the trust property may be split off and merged with other trust (hereinafter referred to as "split-merger”), the trustee of which is the same person.
 Article 95 (Plans for Split-Off or Split-Merger of Trust)
(1) Where a split-off or split-merger of a trust is intented under Article 94, the trustee shall prepare a plan for split-off or split-merger that includes the following matters:
1. The purport that the trust is subject to the split-off or split-merger;
2. Contents of the deed of trust after the split-off or split-merger;
3. Where any modification is made to the contents of the right to benefit prescribed by the deed of trust, such contents and grounds for the modification;
4. Where money or any other property is delivered to the beneficiary as at the time of split-off or split-merger, the details and price of such property;
5. Effective date of the split-off or split-merger;
6. Details and price of the trust property and trust debts subject to split-off;
7. Where any new trust is created after split-off or a split-merger trust that succeeds to the debts of a limited liability trust under Article 123, such purport and the details of specific obligations;
8. Other matters prescribed by Presidential Decree.
(2) A trustee shall obtain approval for a plan for split-off or plan for split-merger prepared under paragraph (1) from the truster and beneficiary for each trust: Provided, That the deed of trust shall govern, if it prescribes otherwise.
(3) A beneficiary who disapproves a plan for split-off or plan for split-merger prepared under paragraph (1) may request the trustee to purchase the right to benefit, in writing, within 20 days from the date of approval for the plan for split-off or plan for split-merger. Article 89 (2) through (8) shall apply mutatis mutandis to such cases.
 Article 96 (Public Announcement of Plans for Split-Off, etc. and Protection of Obligees)
(1) A trustee shall publicly announce the following matters in a general daily newspaper (where the trustee is a corporation, it shall conform to the method of public announcement of the relevant corporation) within two weeks from the date on which the plan for split-off or plan for split-merger is approved, and shall notify each obligee of the trust property known to him/her of the same. In cases falling under subparagraph 2, the fixed period shall be at least one month:
1. The plan for split-off or plan for split-merger;
2. The purport that an obligee is entitled to file an objection within a fixed period;
3. Other matters prescribed by Presidential Decree.
(2) Unless an obligee files an objection within the period prescribed in paragraph (1), he/she shall be deemed to have approved the split-off or split-merger.
(3) Where any obligee files an objection, the trustee shall make reimbursement or provide an adequate security to the obligee, or deposit an adequate security with the trust company for such purpose: Provided, That the same shall not apply where the split-off or split-merger of the trust is not likely to be prejudicial to the obligee.
 Article 97 (Effect of Split-Off)
(1) The rights and liabilities belonging to the trust property before the split-off under Article 94 shall exist in a new trust created after split-off or in a split-merger trust, as determined in the plan for split-off or plan for split-merger.
(2) A trustee shall be liable to reimburse an obligee of the splitting-off trust property with the property of split trust, new trust created after split-off, or split-merged trust.
CHAPTER VIII TERMINATION OF TRUSTS
 Article 98 (Causes for Termination of Trusts)
A trust shall terminate in any of the following circumstances:
1. Where the purpose of trust is fulfilled or becomes impossible to fulfill;
2. Where the trust is merged;
3. Where the trust property of a limited liability trust is declared bankrupt under Article 138;
4. Where a new trustee has not been appointed continuously for one year after the completion of the duties of the trustee;
5. Where a new trustee has not been appointed continuously for one year in a purpose trust;
6. Where any cause for termination prescribed by the deed of trust arises.
 Article 99 (Termination of Trust by Agreement)
(1) A truster and a beneficiary may terminate a trust at any time by agreement: Provided, That the same shall not apply where no truster exists.
(2) A trust, the benefits of which are wholly enjoyed by the truster may be terminated at any time by the truster or his/her heir.
(3) Where the truster, beneficiary or heir of the truster terminates the trust at the time disadvantageous to the trustee without any just reason, the truster, beneficiary or heir of the truster shall compensate for the loss.
(4) Notwithstanding paragraphs (1) through (3), the deed of trust shall govern, if it prescribes otherwise.
 Article 100 (Termination of Trusts by Court Orders)
Where it is evident that terminating a trust coincides with the interests of the beneficiary due to special circumstances unexpected at the time of the deed of trust, the truster, trustee or beneficiary may request the court to terminate the trust.
 Article 101 (Devolvement of Trust Property after Termination of Trusts)
(1) Where a trust is terminated pursuant to subparagraphs 1, 4 through 6 of Article 98, or Article 99 or 100, the trust property shall devolve on the beneficiary (where the beneficiary of remaining property has been designated, referring to such beneficiary of residuary property): Provided, That where a person entitled to the devolvement of the residuary property of the trust property (hereinafter referred to as "rightful person on whom trust property devolves") has been designated by the deed of trust, it shall devolve on such person entitled to devolvement.
(2) A beneficiary and a rightful person on whom trust property devolves renounces their rights to the residuary property of the trust, the residuary property shall devolve on the truster and his/her heir.
(3) Where a trust is terminated under Article 3 (3), the trust property shall devolve on the truster.
(4) Where a trust is terminated, the trust shall be deemed existing until the trust property is transferred to a person on whom it will devolve under paragraphs (1) through (3). In such cases, the person on whom the trust property will devolve shall be deemed the beneficiary.
(5) Where the devolvement of the remaining property fails to be decided as prescribed in paragraph (1) or (2), the remaining property shall devolve on the State.
 Article 102 (Provisions Applicable Mutatis Mutandis)
Articles 53 (3) and 54 shall apply mutatis mutandis where trust property devolves on a beneficiary or another person due to the termination of a trust.
 Article 103 (Accounting by Termination of Trusts)
(1) Where a trust is terminated, the trustee shall, without delay, perform the final accounting on the trust affairs, and obtain the approval therefor from the beneficiary and the rightful person on whom trust property devolves.
(2) Where the beneficiary and the rightful person on whom trust property devolves approves the accounting referred to in paragraph (1), the trustee is deemed relieved of responsibility for the beneficiary and the rightful person on whom trust property devolves: Provided, That the same shall not apply where the trustee has engaged in any misconduct in the course of performing his/her duties.
(3) Where the beneficiary and the rightful person on whom trust property devolves fails to raise an objection within one month after receipt of a request to approve the accounting referred to in paragraph (1), the beneficiary and the rightful person on whom trust property devolves shall be deemed to have approved the accounting referred to in paragraph (1).
 Article 104 (Settlement of Trusts)
Articles 132 (2), 133 (1) through (6), and 134 through 137 shall apply mutatis mutandis to procedures for settlement, where a trust is to be terminated by the deed of trust or by agreement between the truster and the beneficiary.
CHAPTER IX SUPERVISION OVER TRUSTS
 Article 105 (Supervision by Court)
(1) Trust affairs shall be supervised by the court: Provided, That the same shall not apply where the acceptance of the trust is carried on as a business.
(2) The court may order, upon the request of an interested person or ex officio, the inspection of trust affairs, appointment of an inspector, and other necessary measures.
CHAPTER X (Articles 106 through 113) Deleted.
CHAPTER XI LIMITED LIABILITY TRUSTS
SECTION 1 Creation of Limited Liability Trusts
 Article 114 (Creation of Limited Liability Trusts)
(1) A trust under which the trustee shall be responsible for the debts belonging to the trust property only by the trust property (hereinafter referred to as "limited liability trust") may be created by a deed of trust. In such cases, the trust shall take its effect upon completing the registration of a limited liability trust under Article 126.
(2) The following matters shall be prescribed by a deed of trust in order to create a limited liability trust:
1. Purpose of the limited liability trust:
2. Title of the limited liability trust;
3. Names or titles, and addresses of the truster and the trustee;
4. Principal office where the trust affairs of the limited liability trust will be performed (hereinafter referred to as "place where trust affairs are performed");
5. Methods of management, disposal, etc. of trust property;
6. Other necessary matters prescribed by Presidential Decree.
 Article 115 (Title of Limited Liability Trust)
(1) A limited liability trust shall include the word "limited liability trust" in its title.
(2) No trust, other than a limited liability trust, shall use the word "limited liability trust" or any similar word in its title.
(3) No one shall, for wrongful purposes, use a title that may be misunderstood as a limited liability trust.
(4) Where any person uses a title in violation of paragraph (3), the trustee of a limited liability trust, the interests of which have been impaired or are likely to be impaired, may demand the suspension or prevention of the use of title.
 Article 116 (Duty of Indication and Issuance)
(1) A trustee shall indicate to the other party to a transaction the purport that the trust in question is a limited liability trust and issue such contents in writing.
(2) Where a trustee violates paragraph (1), the other party to a transaction may cancel the legal act within three months from the date of such act.
 Article 117 (Duty to Prepare Financial Documents)
(1) The trustee of a limited liability trust shall prepare the following documents:
1. A balance sheet;
2. A statement of profit and loss;
3. A statement of appropriation of retained earnings or a statement of deficits disposal accounts;
4. Other financial documents prescribed by Presidential Decree.
(2) A limited liability trust that fully satisfies the following requirement shall be subject to audit in the same manner as prescribed in the Act on External Audit of Stock Companies: <Amended by Act No. 15022, Oct. 31, 2017>
1. It shall be a trust with beneficiary certificates;
2. The total amount of asset or amount of liabilities as of the end of the immediately preceding business year shall be of at least the criteria prescribed by Presidential Decree.
 Article 118 (Trustee's Liabilities against Third Persons)
(1) Notwithstanding that the trust is a limited liability trust, if the trustee of a limited liability trust commits any of the following acts, he/she shall be responsible to compensate for the loss suffered by a third person therefrom: Provided, That the same shall not apply where the trustee proves that he/she has not been negligent in giving due attention in cases falling under subparagraph 3 or 4:
1. Negligence in performing his/her duties intentionally or by gross negligence;
2. Committing an offence intentionally or by gross negligence;
3. Entering or recording an important matter in a financial document, such as balance sheet, differently from the truth;
4. Completing a registration or making a public announcement differently from the truth.
(2) Where a number of trustees are responsible to compensate any loss to a third person under paragraph (1), they shall jointly take responsibility.
 Article 119 (Prohibition against Compulsory Execution, etc. of Inherent Property)
(1) In cases of a limited liability trust, no compulsory execution, etc. or disposition on default of a national tax, etc. may be conducted against the trustee's inherent property on the basis of a trust claim: Provided, That the same shall not apply to a trustee's responsibility for compensation for loss under Article 118.
(2) A trustee may raise an objection against the compulsory execution, etc. conducted in violation of paragraph (1). Article 48 of the Civil Execution Act shall apply mutatis mutandis to such cases.
(3) A trustee may raise an objection against a disposition on default of a national tax made in violation of paragraph (1). The procedures for raising an objection against the dispositions on default of national taxes shall apply mutatis mutandis to such cases.
 Article 120 (Limits on Benefit of Beneficiaries)
(1) No trustee of a limited liability trust may provide a benefit to the beneficiary exceeding a limit within which the benefit can be provided from the trust property.
(2) The limit within which a benefit can be provided under paragraph (1) shall be calculated by the method prescribed by Presidential Decree within the limit of the amount of net assets.
 Article 121 (Liability to Compensate Deficits Incurred by Excess Benefits)
(1) Where a trustee has provided the beneficiary with a benefit exceeding the limit within which the benefit can be provided under Article 120 (1), the trustee and the beneficiary who have received such benefit shall be jointly responsible to compensate an excess portion to the trust property: Provided, That the same shall not apply where the trustee proves that he/she has not been negligent in giving due attention.
(2) No trustee who has compensated the excess portion as referred to in paragraph (1) shall exercise a claim for reimbursement against a beneficiary in good faith.
 Article 122 (Special Provisions on Effect of Merger)
Even after a merger, the trustee shall take the responsibility for the debts belonging to a limited liability trust only by the trust property of the trust remaining after the merger.
 Article 123 (Special Provisions on Effect of Split-Off)
Where it is determined to transfer any debt belonging to a limited liability trust to a new trust created after split-off or to a split-merger trust, the trustee shall be liable for such debt only by the trust property of a new trust created after the split-off or split-merger trust.
SECTION 2 Registration of Limited Liability Trusts
 Article 124 (Competent Registry Office)
(1) A district court having jurisdiction over the place where trust affairs are performed, the branch court or registry office thereof shall be the competent registry office for the affairs related to the registration of a limited liability trust.
(2) A registry office shall compile and manage a register of limited liability trusts.
 Article 125 (Application for Registration)
(1) No registration shall be made unless it is applied by a trustee or entrusted by a public office.
(2) If an administrator of trust property is appointed under Article 17 (1) or 18 (1), such administrator of trust property shall apply for the registration except as otherwise prescribed by any statute.
 Article 126 (Registration of Limited Liability Trusts)
(1) The following matters shall be registered in the register of a limited liability trust:
1. Purpose of the limited liability trust;
2. Title of the limited liability trust;
3. Trustee's name or title, and address;
4. Where any administrator of trust property exists, the name or title, and address of the administrator of trust property;
5. Place where the trust affairs are performed;
6. Other matters prescribed by Presidential Decree.
(2) The registration under paragraph (1) shall be filed for within two weeks from the time a limited liability trust is created.
(3) A written application (including an electronic document; hereinafter referred to as "written application") for registration of a limited liability trust shall be accompanied by the following: <Amended by Act No. 12592, May 20, 2014>
1. A document certifying the deed of trust under which the limited liability trust has been created;
2. Where the trustee is a corporation, a corporation registration certificate referred to in Article 15 of the Commercial Registration Act;
3. Where an external auditor is required under Article 117 (2), documents certifying the appointment, and acceptance of the appointment, of such auditor;
4. Where an auditor referred to in subparagraph 3 is a corporation, a corporation registration certificate referred to in Article 15 of the Commercial Registration Act;
 Article 127 (Registration for Modification)
(1) Where any of the matters prescribed in the subparagraphs (excluding subparagraph 5) of Article 126 (1) is modified, a registration for modification shall be completed within two weeks.
(2) Where the place where the trust affairs are performed is changed, a registration for such change shall be completed within two weeks at the previous place where they have been performed, and the registration of the matters prescribed in the subparagraphs of Article 126 (1) shall be completed at a new place where they will be performed: Provided, That where a change of the place where they are performed is made within the an area under the jurisdiction of the identical registration office, only the registration for change of place where the trust affairs are to be done shall be required.
(3) No modification of the matters prescribed in the subparagraphs of Article 126 (1) may be contested against any third person in good faith unless they are registered under paragraph (1) or (2). Even after the registration is completed, the same shall apply where a third person has not been aware of such registration for modification for a justified reason.
(4) An application for a registration for modification under paragraph (1) or (2) shall be accompanied by a document certifying the modification of the relevant registered matter.
 Article 128 (Registration of Termination of Limited Liability Trusts)
(1) Where a limited liability trust is terminated or where any modification is made to defeat the purpose specified in Article 114 (1), a registration of termination shall be completed within two weeks.
(2) An application to register the termination of a limited liability under paragraph (1) shall be accompanied by a document certifying the occurrence of a ground for the termination.
 Article 129 (Registration of Merger or Split-Off of Limited Liability Trusts)
Articles 126 through 128 shall apply mutatis mutandis to the registration a limited liability trust, if it continues to be maintained even after it is merged or split off.
 Article 130 (Faulty Registration)
Where the registration of a limited liability trust is made differently from the truth by intention or negligence, the trustee shall not contest against any third person in good faith with the fact that is different from the registration.
 Article 131 (Procedures for, and Affairs Related to, Registration)
Procedures for, and affairs related to, the registrations prescribed in this Chapter shall conform to the practices under the Commercial Registration Act, except as otherwise expressly prescribed by this Act and other statutes.
SECTION 3 Liquidation of Limited Liability Trusts
 Article 132 (Liquidation of Limited Liability Trusts)
(1) Upon termination of a limited liability trust, the trust shall be liquidated: Provided, That the same shall not apply where it is terminated due to a cause falling under subparagraph 2 or 3 of Article 98.
(2) A limited liability trust shall be deemed existing within the extent of the purpose of liquidation until the liquidation is completed under paragraph (1).
 Article 133 (Liquidating Trustees)
(1) Where a limited liability trust is terminated, the trustee or administrator of trust property as at the time of the termination shall be the liquidator (hereinafter referred to as "liquidating trustee") except as otherwise prescribed by the deed of trust: Provided, That where a limited liability trust is terminated pursuant to Article 3 (3), the court shall appoint a liquidating trustee upon request of the beneficiary, obligees of trust, public prosecutor, or ex officio for the liquidation of the relevant trust.
(2) Where a liquidating trustee is appointed under the proviso to paragraph (1), the duties of the former trustee shall terminate.
(3) Article 21 (4) shall apply mutatis mutandis to remuneration for a liquidating trustee appointed under the proviso to paragraph (1).
(4) A liquidating trustee shall perform the following duties:
1. Termination of exiting affairs;
2. Recovery of claims belonging to trust property and repayment of trust claims;
3. Repayment of beneficiary claims (excluding the claims, the contents of which are for the provision of residuary property);
4. Provision of residuary property;
5. Disposition of conversion of property.
(5) No liquidating trustee shall perform his/her duties unless he/she pays the debts referred to in paragraph (4) 2 and 3.
(6) A liquidating trustee may engage in all conduct necessary for the performance of his/her duties prescribed in the subparagraphs of paragraph (4): Provided, That the deed of trust shall govern, if it prescribes otherwise.
(7) A liquidating trustee shall complete the registration of his/her name or title, and address within two weeks from when he/she becomes the liquidating trustee.
 Article 134 (Protection of Obligees)
(1) A liquidating trustee shall, without delay, after entering upon his/her duties, urge the obligees of the relevant trust to report their claims within a specified period and notify them of the purport that their claims shall be excluded from the liquidation if not reported within such period by publishing them in a general daily newspaper (where the trustee is a corporation, referring to the method of public notice of such corporation). In such cases, the period shall be at least two months.
(2) A liquidating trustee shall urge each obligee known to him/her to report his/her claims, and shall not exclude them from the liquidation even if the obligee fails to report it.
 Article 135 (Repayment within Period for Reporting Claims)
(1) No liquidating trustee shall make any repayment to an obligee of trust within the period for reporting referred to in Article 134 (1): Provided, That he/she shall not be relieved of responsibility for compensation for loss incurred due to delay in repayment.
(2) Notwithstanding paragraph (1), in cases of small-sum claims, trust claims with securities, and other claims, the repayment of which would not likely to be prejudicial to other obligees, a liquidating trustee may repay the claims with the permission of the court.
(3) In rejecting an application for permission referred to in paragraph (2), the ground therefor shall be always given in a trial.
(4) No objection may be raised to a judgment that has permitted repayment.
 Article 136 (Repayment of Debts during Liquidation Process)
(1) A liquidating trustee may repay the trust claims which have not arrived at the maturity date.
(2) Where a trust claim is repaid under paragraph (1), in cases of a trust claim that has not accrued any interest, an amount of claim computed by adding the statutory interest calculated up to the maturity date shall be repaid.
(3) Paragraph (2) shall apply mutatis mutandis to a claim that has accrued some interest, the amount which falls short of the amount calculated by the statutory interest rate.
(4) In cases falling under paragraph (1), the repayment of the conditional claims, claims with no fixed period of duration, and other claims, the amounts of which are not fixed shall be made based on the evaluation of an appraiser appointed by the court.
 Article 137 (Repayment to Excluded Obligees)
Where any obligee of a limited liability trust being liquidated fails to file a report on his/her claims within the period for reporting referred to in Article 134 (1), such claims shall be excluded from the liquidation. In such cases, the obligee excluded from the liquidation may claim for the repayment against the undistributed residuary property.
 Article 138 (Application for Bankruptcy during Liquidation)
Where it becomes evident that the trust property of a limited liability trust being liquidated is insufficient for fully repaying debts, the liquidating trustee shall immediately apply for the bankruptcy of the trust property.
 Article 139 (Registration of Termination of Liquidation)
Where the liquidation of a limited liability trust is terminated, the liquidating trustee shall perform the final accounting under Article 103 and obtain approval therefor from the beneficiary and the rightful person on whom the trust property devolves, and shall complete registration of termination within two weeks after obtaining the approval.
CHAPTER XII PENALTY PROVISIONS
 Article 140 (Crime of Special Misappropriation Committed by Representative, etc. of Assembly of Trust Bondholders)
Where the representative of an assembly of trust bondholders or a person who executes the resolution passed at such assembly incurs a loss to the trust bondholders either by taking economic benefits committing a violation of his/her duties or by arranging a third person to take such benefits, he/she shall be punished by imprisonment for up to seven years, or by a fine not exceeding 20 million won.
 Article 141 (Attempted Crimes of Special Misappropriation)
A person who has attempted a crime prescribed in Article 140 shall be punished.
 Article 142 (Crimes of Using Documents Containing Misstatements)
(1) If a person issuing beneficiary certificates issues beneficiary certificates or a person entrusted with trust bond subscription invites to subscribe for trust bonds uses a beneficiary certificate or bond subscription form, advertisements concerning the subscription for beneficiary certificates or trust bonds, or other documents, containing misstatements, he/she shall be punished by imprisonment for up to five years, or by a fine not exceeding 15 million won.
(2) Paragraph (1) shall also apply where a person who engages in the sale of beneficiary certificates or trust bonds uses a document containing misstatements as to the important matters in connection with such sale.
 Article 143 (Crimes of Offering or Receiving Bribes concerning Interference with Exercise of Rights)
(1) Any person who offers, receives any economic benefits or makes a request or promise therefor upon receiving a wrongful solicitation for favors related to taking the floor or exercising a voting right at an assembly of trust bondholders shall be punished by imprisonment for up to one year, or by a fine not exceeding ten million won. <Amended by Act No. 12193, Jan. 7, 2014>
(2) Paragraph (1) shall also apply to any person who promises, offers or expresses his/her intention to offer the benefits referred to in paragraph (1).
 Article 144 (Concurrent Imposition of Imprisonment and Fines)
The imprisonment and fines prescribed in Articles 140 through 143 may be imposed concurrently.
 Article 145 (Confiscation and Additional Collection)
In cases falling under Article 143 (1), the benefits offered or received by the offender shall be confiscated. If it is impossible to fully or partially confiscate such benefits, the price thereof shall be additionally collected.
 Article 146 (Administrative Fines)
(1) Any of the following persons or his/her representative shall be punished by an administrative fine not exceeding five million won:
1. A trustee, his/her heir, legal representative, or liquidator who fails to notify the beneficiary of the termination of duties, in violation of Article 12 (2) or (3) or 13 (2);
2. A trustee who fails to notify the administrator in bankruptcy of the matters concerning trust property, in violation of Article 12 (3);
3. The heir of a trustee, legal representative or liquidator who fails to notify the beneficiary of taking custody of trust property and handing over the trust affairs, in violation of Article 12 (4);
4. A trustee who fails to notify the beneficiary of the fact that he/she has resigned from his/her post, in violation of Article 14 (3);
5. A trustee who fails to notify the beneficiary of the fact that he/she has been dismissed, in violation of Article 16 (4);
6. An administrator of trust property who fails to notify the beneficiary of the fact that he/she has been appointed, in violation of Article 17 (3) or 18 (3);
7. A trustee who fails to notify the beneficiary of the fact that he/she has applied for the permission of the court, in violation of the proviso to Article 34 (2);
8. A trustee who is negligent in performing his/her duties of preparing, preserving and keeping books, lists of property, or other document prescribed in Article 39;
9. A trustee, administrator of registry of beneficiaries or the issuer of a trust bond, who rejects the inspection or reproduction of books and other documents, registry of beneficiaries, meeting minutes of an assembly of trust bondholders, financial statements, etc., without any justifiable ground, in violation of this Act;
10. A trustee who rejects a demand for an explanation made under Article 40 (1) without any justifiable ground;
11. A trustee who delays the issuance of a beneficiary certificate without any justifiable ground, in violation of Article 78 (2);
12. A trustee who fails to state, or misstates, the matters to be described on a beneficiary certificate or bond, in violation of Article 78 (5) or 87 (2);
13. A trustee, administrator of registry of beneficiaries, or the issuer of a trust bond who fails to prepare or keep a registry of beneficiaries or meeting minutes of an assembly of trust bondholders, as prescribed by this Act;
14. A trustee who fails to keep the registry of beneficiaries, in violation of Article 79 (5);
15. A trustee who fails to notify the beneficiary of the fact of receiving a report, in violation of Article 80 (2);
16. A trustee who refuses to enter in the registry of beneficiaries the name or title, and address of a person who has obtained the right to benefit indicated on a registered beneficiary certificate, as prescribed in Article 81 (2);
17. A trustee who fails to prepare a subscription form for bond or to state the matters to be described thereon or misstate them, in violation of Article 87 (2);
18. A trustee who fails to enter or misstate any matter to be stated in the registry of beneficiaries, trust bond register, or a duplicate thereof; a list of property, balance sheet, statement of profit and loss, statement of appropriation of retained earnings, or statement of deficits disposal accounts to be prepared under this Act; or any other financial documents;
19. A trustee who fails to keep a trust bond register, in violation of Article 396 (1) of the Commercial Act that applies mutatis mutandis under Article 87 (4);
20. A trustee or a company entrusted with the bond subscription that issues a bond without having its full amount paid up, in violation of Article 478 (1) of the Commercial Act that applies mutatis mutandis under Article 87 (4);
21. A company entrusted with the bond subscription that collects redemption and fails to give public notice thereof without delay, in violation of Article 484 (2) of the Commercial Act that applies mutatis mutandis under Article 87 (4);
22. A trustee who fails to publicly announce, without delay, the fact that a decision has been made either to approve or disapprove the resolution passed at an assembly of trust bondholders, in violation of Article 499 of the Commercial Act that applies mutatis mutandis under Article 87 (4);
23. A trustee or company entrusted with the bond subscription that makes a misstated report or conceals the truth at an assembly of trust bondholders;
24. A trustee who fails to publicly announce the fact that objections may be filed against a merger, in violation of Article 92 (1);
25. A trustee who merges, splits off or split-merges a trust in violation of Article 92 or 96;
26. A trustee who is negligent in creating, modifying, terminating, or liquidating a limited liability trust under this Act;
27. A liquidating trustee who provides the residuary property, in violation of Article 133 (5) (including the cases applicable mutatis mutandis under Article 104);
28. A liquidating trustee who is negligent in applying for bankruptcy, in violation of Article 138.
(2) Any person who fails to use the word "limited liability trust" in the title of a limited liability trust, in violation of Article 115 (1), shall be punished by an administrative fine not exceeding three million won.
(3) Any of the following persons shall be punished by an administrative fine not exceeding one million won:
1. A person who uses the word "limited liability trust" or any similar word, in violation of Article 115 (2);
2. A person who uses a title that can be misunderstood as a limited liability trust, in violation of Article 115 (3).
(4) Administrative fines under paragraph (1) through (3) (excluding an administrative fine under paragraph (1) 26) shall be imposed and collected by the Minister of Justice, as prescribed by Presidential Decree.
 Article 147 (Violations of Duties by External Auditor, etc.)
Where an external auditor is appointed under Article 117 (2), the Act on External Audit of Stock Companies shall apply mutatis mutandis to the penalty provisions and administrative fines for violations committed by the auditor, etc. In such cases, "company" shall be construed as "trust". <Amended by Act No. 15022, Oct. 31, 2017>
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Article 2 (Non-Retroactivity of Effect of this Act)
Except as otherwise expressly prescribed in this Act, this Act shall not be binding on any effect created under the former provisions.
Article 3 Omitted.
Article 4 (Relationship with Other Statutes)
A citation of the former Trust Act or any provisions thereof in any other statute as at the time this Act enters into force shall be deemed a citation of this Act or the relevant provisions thereof in lieu of the former Trust Act or any provisions thereof, if any provisions corresponding thereto exist herein.
ADDENDUM <Act No. 12193, Jan. 7, 2014>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 12420, Mar. 18, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 12592, May 20, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 15022, Oct. 31, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 15 Omitted.