ACT ON IMPLEMENTATION OF COMMERCIAL ACT
Act No. 1213, Dec. 12, 1962
Amended by Act No. 1687, Mar. 19, 1965
Act No. 10372, Jul. 23, 2010
The term "the Commercial Act" as used in this Act refers to the Commercial Act enacted as Act No. 1000 in 1962 and the term "the previous Acts" as used in this Act refers to "the Commercial Act, the Limited Liability Company Act, the Act on Implementation of Commercial Act and Act on Implementation of Amendments to the Commercial Act" as applied in accordance with Article 1 of the Chosun Civil Affairs Ordinance.
| (1) | Unless as otherwise specifically provided, the
Commercial Act shall apply to any of the matters which have occurred before the enforcement of the
Commercial Acts: Provided, That it shall not affect the effects given by the previous Acts.
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| (2) | The provisions of the articles of incorporation and the terms of a contract inconsistent with the
Commercial Act shall become ineffective from the enforcement date of the
Commercial Act.
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| Article 3 (Effects of Special Acts and Subordinate Statutes concerning Commercial Affairs) |
The special Acts and subordinate statutes concerning the commercial affairs shall be effective even after the enforcement of the
Commercial Act.
| Article 4 (Transitional Provisions concerning Prescription) |
| (1) | Any right, the extinctive prescription of which has not been completed in accordance with the previous Acts at the time of enforcement of the
Commercial Act, shall be subject to the amended provisions of prescription of the
Commercial Act.
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| (2) | Paragraph (1) shall apply mutatis mutandis to a legal period of time which is not a prescription. |
| Article 5 (Calculation of Period) |
The legal period prescribed by the
Commercial Act shall be computed by adding the period both prior and subsequent to the enforcement of the
Commercial Act, if the period had already begun under the previous Acts, or shall commence from the enforcement date of the
Commercial Act, if the period has not been fixed in the previous Acts.
| Article 6 (Valuation of Fixed Assets for Business) |
| Article 7 (Liability of Person who has Demanded Order of Dissolution) |
Where the demand for dissolution has been made prior to the enforcement of the
Commercial Act, the previous Acts shall apply even after the enforcement of the
Commercial Act with regard to the liability of the person against whom such demand has been dismissed.
| Article 8 (Security for Institution of Action, etc.) |
The provisions of the previous Acts concerning the security to be furnished in relation to the demand for dissolution or the institution of action shall apply only to the security furnished prior to the enforcement of the
Commercial Act.
| Article 9 (Incorporation of Stock Company) |
Where the promoters have subscribed for the total number of shares or have commenced to offer such shares for subscription prior to the enforcement of the Commercial Act, the previous Act shall apply as to such incorporation even after the enforcement of the Commercial Act: Provided, That where registration of incorporation is effected after the enforcement of the Commercial Act, the same shall not apply to such matters registered.
| Article 10 (Articles of Incorporation of Stock Company) |
| (1) | In regard to a stock company incorporated prior to the enforcement of the Commercial Act, the total number of shares issued prior to the enforcement of the Commercial Act, and in regard to a stock company incorporated in accordance with the previous Acts after the enforcement of the Commercial Act, the number of shares which are issued at the time of incorporation shall be deemed to have been fixed in articles of incorporation as the total number of shares authorized to be issued. |
| Article 11 (Registration of Stock Company) |
| (1) | A stock company incorporated prior to the enforcement of the
Commercial Act shall register the particulars, which are to be registered newly in accordance with the
Commercial Act, within six months from the enforcement date of the
Commercial Act.
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| (2) | If any other registration is effected before the registration mentioned in the preceding paragraph the registration mentioned in the preceding paragraph shall be effected simultaneously with such other registration. |
| (3) | If any alteration of the particulars which are to be registered newly in accordance with paragraph (1) has occurred before such registration under paragraph (1) is effected, registration shall be effected, without delay, as to the particulars which have not been altered. |
| (4) | If the provisions mentioned in the preceding three paragraphs have been violated, the representative directors of the company shall be liable to pay a fine for negligence of not more than 50,000 Won. |
| Article 12 (Presumption of Total Amount of Capital) |
| Article 13 (Promoter's Liability to Secure Subscription for and Payment on Shares) |
The provisions of
Article 321 (1) of the Commercial Act shall also apply to where a company has been incorporated in accordance with the previous Acts after the enforcement of the
Commercial Act. The same shall also apply to where the application for subscription for shares has been revoked after the enforcement of the
Commercial Act, if a company has been incorporated pursuant to the previous Acts before the enforcement of the Commercial Act.
| Article 14 (Remission and Enforcement of Liability in Relation to Incorporation) |
| (1) | Where the liability of the promoters, directors or auditors, as to incorporation of the company, is discharged after the enforcement of the
Commercial Act, the
Commercial Act shall also apply as to such discharge even if the company has been incorporated in accordance with the previous Acts.
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| (2) | Where an action pursuing the liability mentioned in the preceding paragraph is instituted after the enforcement of the
Commercial Act, the preceding paragraph shall apply as to such an action.
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| Article 15 (Full Payment on Shares, etc.) |
| (1) | In respect of shares, the full payment upon which has not been completed at the time of enforcement of the
Commercial Act, a company shall have the amount of shares to be paid fully or decrease the capital within two years from the enforcement date of the
Commercial Act in order to make the full payment upon shares completed.
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| (2) | The previous Acts shall also apply in regard to such shares even after the enforcement of the
Commercial Act until when the payment mentioned in the preceding paragraph is completed.
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| (3) | If a company has not effected full payment upon shares or decrease of the capital within the period mentioned in paragraph (1), the company shall be deemed to have been dissolved. |
| Article 16 (Par Value of Shares, Consolidation of Shares) |
| (1) | The provisions of Article 202 (2) of the former Commercial Act shall apply in regard to the par value of shares of a stock company which is incorporated in accordance with the previous Acts after the enforcement of the Commercial Act. |
| (2) | A stock company incorporated in accordance with the previous Acts shall consolidate shares by a resolution in compliance with the revised provision of Article 434 of the Commercial Act within two years from the enforcement date of the Commercial Act in order to convert a share the par value of which is less than 500 Won into a share the par value of which is not less than 500 Won. In such cases, the revised provisions of Articles 440 through 444 of the Commercial Act shall apply mutatis mutandis. |
| Article 17 (Increase of Total Number of Shares) |
The total number of shares authorized to be issued shall not be increased unless the procedures mentioned in
Articles 15 (1) and
16 (2) have been completed.
| Article 18 (Transfer of Registered Shares) |
| Article 19 (Period of Closure of Register of Shareholders and Record Date) |
Article 354 of the Commercial Act shall apply from the date following the date of closing of the first ordinary general shareholders' meeting after the enforcement of the
Commercial Act, or from the date following the date of termination of a period closing register of shareholders in case the period has been in progress at the time of enforcement of the
Commercial Act and the period expires after the closing of the aforesaid general meeting.
| Article 20 (Acquisition of Share Certificate) |
In case a share certificate has been acquired by the endorsement prior to the enforcement of the Commercial Act, Article 229 (2) of the former Commercial Act shall apply in regard to such acquisition even after the enforcement of the Commercial Act: Provided, That in case such share certificate has been acquired by the endorsement effected after the enforcement of the Commercial Act, Article 359 of the Commercial Act shall apply as to such acquisition.
| Article 21 (Convocation of Extraordinary General Meeting by Auditors) |
If an extraordinary general meeting has been convened by the auditors before the enforcement of the Commercial Act, Article 235 (2), of the former Commercial Act shall apply in regard to such an extraordinary general meeting even after the enforcement of the Commercial Act.
| Article 22 (Demand for Convocation of General Meeting by Minority Shareholders) |
| Article 23 (Resolution of General Meeting) |
| (1) | In regard to requirement for resolution of the general meeting of a stock company and of limited liability company incorporated in accordance with the previous Acts, the previous Acts shall apply until the date which comes first among the following dates even after the enforcement of the
Commercial Act:
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| 1. | The date on which the first ordinary general meeting after the enforcement of the
Commercial Act has been closed;
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| 2. | As to the company in which an ordinary general meeting is convened once every year, December 31, 1963, and as to any other company, June 30, 1963. |
| (2) | The preceding paragraph shall not apply to where the articles of incorporation has been altered in conformity with the
Commercial Act before the date which comes first among the dates mentioned in each subparagraph of the preceding paragraph.
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| (3) | In respect of the general meeting which adopts any resolution after the enforcement of the
Commercial Act, the notice and public notice of the general meeting are not necessary for the shareholders entitled to vote due to the enforcement of the
Commercial Act, if the notice to convene such meeting has been dispatched or the public notice has been given prior to the enforcement of the
Commercial Act.
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| (4) | The provisions of the preceding paragraph shall apply mutatis mutandis to any kind of general meeting of shareholders. |
| Article 24 (Action for Revocation of Resolution) |
In regard to an action for revocation of a resolution, if the period specified in Article 248 (1) of the previous Commercial Act, and Article 248 (1) of the previous Commercial Act which is applicable mutatis mutandis by Article 41 of the previous Limited Liability Company Act, has not elapsed at the time of enforcement of the Commercial Act, the provisions of the Commercial Act shall apply as to the period for instituting an action for revocation of a resolution.
| Article 25 (Presumption of Directors, etc.) |
The directors, auditors or inspectors under the previous Acts at the time of enforcement of the
Commercial Act shall be deemed directors, auditors or inspectors respectively under the
Commercial Act.
| Article 26 (Term of Office of Director) |
The previous Acts shall apply as to the term of office of the director who has been in office at the time of enforcement of the
Commercial Act: Provided, That such term shall not be prolonged after the date on which the first ordinary general meeting, after two years have elapsed from the date of the enforcement of the
Commercial Act, is closed.
| Article 27 (Representative Director) |
| (1) | A director who has the authority to represent the company in accordance with the previous Acts shall be deemed to be the one who shall represent the company in accordance with the Commercial Act. |
| (2) | Where it has been determined that two or more directors shall represent the company jointly in accordance with the previous Acts, such determination shall be deemed to be made in accordance with Article 389 (2) of the Commercial Act. |
| Article 28 (Liability for Act of Director) |
| (1) | In regard to the liability for an act done by director before the enforcement of the Commercial Act, the previous Acts shall apply even after the enforcement of the Commercial Act.
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| (2) | Where the liability mentioned in the preceding paragraph is to be discharged after the enforcement of the Commercial Act, the Commercial Act shall apply in regard to such discharge regardless of paragraph (1).
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| (3) | Where an action pursuing the liability mentioned in paragraph (1) is brought after the enforcement of the Commercial Act, the preceding paragraph shall apply as to such an action.
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| Article 29 (Action against Director and Liabilities of Shareholders etc. who Have Demanded Institution of Action) |
Where an action against the director is brought before the enforcement of the Commercial Act in accordance with Article 267 (1) or Article 268 (1) of the former Commercial Act, or Article 31 of the former Limited Liability Company Act, or Article 267 (1) of the previous Commercial Act which is applied mutatis mutandis by Article 32 of the former Limited Liability Company Act, the previous Acts shall apply as to such action and the liabilities of shareholders and members of the company who demanded institution of an action even after the enforcement of the Commercial Act.
| Article 30 (Appointment of Acting Directors in accordance with Previous Acts, etc.) |
In regard to the cases where the demand for suspension of the exercise of duties or for appointment of acting directors has been made prior to the enforcement of the Commercial Act, in accordance with the provisions of Article 272 of the former Commercial Act or of the same Article of the former Commercial Act, which is applied mutatis mutandis by Article 32 of the previous Limited Liability Company Act, such provisions shall apply even after the enforcement of the Commercial Act.
| Article 31 (Appointment and Term of Office of Auditor) |
| (2) | The previous Acts shall apply in regard to the term of office of the auditor, who has been in office at the time of enforcement of the
Commercial Act, even after the enforcement thereof: Provided, That such term shall not be prolonged after the date on which the first ordinary general meeting, after one year has elapsed from the enforcement date of the enforcement of the Commercial Act, is closed.
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| Article 32 (Auditor Who Is to Perform Duty of Director) |
| Article 33 (Representative of Company in Action between Company and Director) |
Where the company brings an action against the director or the director against the company, before the enforcement of the Commercial Act, Article 277 of the previous Commercial Act shall apply or apply mutatis mutandis in regard to the person, who shall represent the company as to such action, even after the enforcement of the Commercial Act: Provided, That this shall not apply after the person who shall represent the company has been appointed in accordance with the Commercial Act.
| Article 34 (Institution of Action by Auditor, etc.) |
Where the auditor has brought an action to the court or made a demand or an application prior to the enforcement of the Commercial Act, the previous Acts shall apply in regard to such action, demand or application even after the enforcement of the Commercial Act.
| Article 35 (Action against Auditor and Liability of Shareholders who have Demanded Institution of Action) |
Article 29 of this Act shall apply mutatis mutandis in regard to the action instituted against the auditor, the liability of shareholders or members who have demanded such institution of action in accordance with Article 279 (1) of the former Commercial Act, Article 31 of the former Limited Liability Company Act applied mutatis mutandis by Article 34 of the same Act or Article 267 (1) of the former Commercial Act.
| Article 36 (Applicable Provisions in regard to Auditor) |
| Article 37 (Valuation of Company's Property) |
| Article 38 (Issue Cost New Share) |
| Article 39 (Amount Exceeding Face Value) |
Where the company which was incorporated under the previous Acts or which increases its capital in accordance with the previous Acts issues shares with the price higher than the face value even after the enforcement of the Commercial Act, the provision of Article 459 of the Commercial Act shall apply in regard to the amount exceeding such face value.
| (1) | The reserve which has been set aside in accordance with Article 288 or Article 288 (1) of the previous Commercial Act, which is applied mutatis mutandis by Article 46 (1) of the previous Limited Liability Company Act shall be deemed to have been set aside as the earned surplus reserve. |
| (2) | The company may make a part of earned surplus reserve mentioned in the preceding paragraph, set aside by the first period for the settlement of accounts after the Commercial Act enters into force, as the capital reserve. |
| Article 41 (Accrued Interest Dividend During Construction in Progress) |
| (1) | The provision of the articles of incorporation prepared in accordance with the previous Acts, the content of which is that the interests shall be distributed prior to the commencement of business, shall be deemed to be the provisions of articles of incorporation prepared in accordance with the
Commercial Act, the content of which is that the interests shall be distributed before the commencement of business upon shares issued prior to the enforcement of the
Commercial Act and upon shares which are issued by the capital increase after the enforcement of the
Commercial Act or upon shares which are issued at the time of incorporation of a stock company in accordance with the previous Acts after the enforcement of the
Commercial Act: Provided, That this shall not apply to where it is provided for in the articles of incorporation that the interests shall not be distributed on shares which are to be issued by the capital increase.
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| (2) | The amount of interests distributed in accordance with the previous Acts prior to the enforcement of the
Commercial Act shall be deemed the amount of interests distributed in accordance with the
Commercial Act.
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| Article 42 (Supplementary Schedules) |
| Article 43 (Order to Convene General Meeting) |
Where an order to convene a general shareholders meeting has been issued in accordance with the provisions of Article 294 (3) of the former Commercial Act prior to the enforcement of the Commercial Act, the previous Acts shall apply in regard to such convocation of a general meeting even after the enforcement of the Commercial Act.
| Article 44 (Offering of Bonds for Subscription) |
Where the resolution of offering bonds for subscription has been adopted before the enforcement of the Commercial Act, the previous Acts shall apply in regard to such offering after the enforcement of the Commercial Act.
| Article 45 (Resolution for a Meeting of Bondholders) |
Where the resolution for meeting of bondholders is adopted after the enforcement of the
Commercial Act, the
Commercial Act shall apply in regard to the requirements for such resolution even if the notice of convening the meeting has been dispatched or the public notice thereof has been given before the enforcement of the
Commercial Act.
| Article 46 (Capital Increase) |
| (1) | Where the resolution for capital increase has been adopted before the enforcement of the
Commercial Act, the previous Acts shall apply in regard to such capital increase even after the enforcement of the
Commercial Act: Provided, That in regard to the registration of capital increase, which is effected after the enforcement of the
Commercial Act, the registration of the alteration due to the issuance of new shares in accordance with the
Commercial Act shall be effected.
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| (2) | The capital increase mentioned in the preceding paragraph shall take effect by registering the alteration due to the issuance of new shares in accordance with the
Commercial Act at the place of principal office of the company.
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| (3) | Where the capital is increased in accordance with the previous Acts after the enforcement of the
Commercial Act, the total number of shares authorized to be issued by the company which has been deemed to have been provided for in its articles of incorporation shall be deemed to be increased by the number of shares increased due to such capital increase.
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| Article 47 (Issuance of Shares for Price Less than Face Value) |
| Article 48 (Contract to Give Right to Subscribe for New Shares) |
Where a contract, mentioned in Article 349 of the previous Act, has been entered into before the enforcement of the Commercial Act, it shall be provided for in the articles of incorporation that the preemptive right shall be given to the person to whom the right to subscribe for new shares was given in accordance with such contract, when the total number of shares authorized to be issued by the company is increased in accordance with the Commercial Act.
| Article 49 (Director's Warranty Liability for Subscription) |
| Article 50 (Convertible Shares) |
| (1) | Where it has been provided by the articles of incorporation that any shareholder may demand the conversion of one class of new shares, for which he/she has subscribe, into another class of shares in accordance with Article 359 of the previous Commercial Act before the enforcement of the Commercial Act, Articles 360 through 362 of the former Commercial Act shall apply in regard to such shares, even after the enforcement of the Commercial Act. |
| (2) | Where the conversion has been made as to the shares mentioned in the preceding paragraph after the enforcement of the Commercial Act, the increase and decrease of the number of respective class of shares occurring as a result of such conversion shall be deemed an increase or decrease in the number of respective class of shares to be issued by the company which has been deemed to have been provided for in its articles of incorporation. |
| (3) | In the case mentioned in the preceding paragraph, the registration of alteration due to the conversion shall be effected at the place of the principal office and each branch office of the company within one month from the end of every business year. |
| Article 51 (Convertible Bonds) |
| (1) | Where bondholders adopt the resolution for demanding the conversion of bonds into shares in accordance with Article 364 of the previous Commercial Act before the enforcement of the Commercial Act, Articles 365 through 368 of the previous Commercial Act shall apply in regard to such bonds even after the enforcement of the Commercial Act. |
| (2) | In the case of the preceding paragraph, the number of shares and of every class of shares, which is to be issued due to the conversion subsequent to the enforcement of the Commercial Act, shall be deemed to have been added to the total number of shares and the number of every class of the shares to be issued by the company which is deemed to have been provided for in its articles of incorporation in accordance with Article 10. |
| (4) | Where the conversion has been made in respect of the bonds mentioned in paragraph (1) after the enforcement of the Commercial Act, the registration for alteration due to such conversion shall be effected at the place of the principal office and each branch office of the company within one month from the end of each business year. |
| Article 52 (Merger of Companies) |
If, where a surviving company or a newly incorporated company in consequence of a merger is a stock company the consent of all the members or approval of the general shareholders' meeting of one of the constituent companies has been obtained with regard to the written agreement of a merger prior to the enforcement of the
Commercial Act, the previous Acts shall apply in regard to such merger even after the enforcement of the
Commercial Act: Provided, That with regard to the registration of alteration or incorporation by the merger effected after the enforcement of the
Commercial Act, the registration pursuant to the
Commercial Act shall be effected.
| Article 53 (Applicable Provisions in regard to Liquidator) |
| Article 54 (Company Reorganization) |
| (1) | If an order of commencement of reorganization has been rendered prior to the enforcement of the Commercial Act, the previous Acts shall apply as to such reorganization even after the enforcement of the Commercial Act. |
| (2) | Where no decision regarding completion of reorganization has been made within two years after the enforcement date of the Commercial Act, a decision of commencement of reorganization under the Debtor Rehabilitation and Bankruptcy Act shall be deemed to have been made until two years have elapsed from the enforcement date of the Commercial Act.
<Amended by Act No. 10372, Jul. 23, 2010> |
| Article 55 (Special Liquidation) |
| (1) | When an order of commencement of special liquidation has been made prior to the enforcement of the Commercial Act, the previous Acts shall apply as to such special liquidation even after the enforcement of the Commercial Act. |
| (2) | When no agreement is executed even though two years have elapsed from the enforcement date of the Commercial Act, or it is impossible to execute agreement, the court shall render the decision of bankruptcy ex officio in accordance with the Debtor Rehabilitation and Bankruptcy Act.
<Amended by Act No. 10372, Jul. 23, 2010> |
| Article 56 (Limited Partnership Company by Shares) |
| (1) | The previous Acts shall apply in regard to a limited partnership company by shares incorporated prior to the enforcement of the
Commercial Act, even after the enforcement of the
Commercial Act.
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| (2) | Where a limited partnership company by shares merges with another company after the enforcement of the
Commercial Act, the surviving company or newly incorporated company in consequence of a merger shall be a stock company, irrespective of the preceding paragraph. In such cases, the written agreement of a merger shall be prepared in accordance with
Articles 523 and
524 of the Commercial Act.
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| (3) | The existing limited partnership company by shares shall be dissolved at the time when two years have elapsed from the enforcement date of the
Commercial Act.
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| Article 57 (Limited Liability Company) |
| Article 58 (Change of Organization of Limited Liability Company) |
Where a limited liability company adopts the resolution for change of organization provided for in Article 67 (1) of the previous Limited Liability Company Act prior to the enforcement of the Commercial Act, the previous Acts shall apply in regard to such change of organization: Provided, That when the registration of incorporation is effected after the enforcement of the Commercial Act, the foregoing shall not apply in regard to such matters registered.
| Article 59 (Registration of Foreign Company) |
| (1) | Where a foreign company has effected the registration of establishment of its branch office in accordance with the previous Acts prior to the enforcement of the
Commercial Act, such registration of establishment of a branch office shall be deemed the registration of establishment of the business office as provided for in
Article 614 (2) of the Commercial Act: Provided, That such company shall register the particulars as required to be registered under the
Commercial Act within six months from the enforcement date of the
Commercial Act.
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| (3) | If the provisions of the proviso to paragraph (1) or paragraph (2) have been violated, the representative of such company, who is in the Republic of Korea, shall be liable to pay a fine for negligence of not more than 50,000 Won. |
| Article 60 (Order to Close Branch Office of a Foreign Company) |
Article 7 shall apply mutatis mutandis to cases provided for in Article 484 of the previous Commercial Act and Article 484 of the same Act applied mutatis mutandis by Article 76 of the previous Limited Liability Company Act, and to the liability of the person against whom such demand has been dismissed as to such cases.
| Article 61 (Penal Provisions) |
The previous Act shall govern the application of the penal provisions to any offense committed prior to the enforcement of the
Commercial Act.
ADDENDA
| (1) | (Enforcement Date) This Act shall enter into force on January 1, 1963. However, paragraphs (2) and (3) of the Addenda shall be effective from the date of its promulgation. |
| (2) | (Exception to the Alteration of Articles of Incorporation) A stock company incorporated prior to the enforcement of the
Commercial Act may, prior to the enforcement of the
Commercial Act, alter the articles of incorporation which shall enter into force on the date of enforcement of the
Commercial Act.
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| (3) | (Idem) The company, which is formed in accordance with the previous Acts after the enforcement of the
Commercial Act, may, prior to the enforcement of the
Commercial Act, effect alteration of the articles of incorporation which shall enter into force on the date of enforcement by the
Commercial Act, or alter the articles of incorporation so as to comply with the
Commercial Act after the enforcement of the
Commercial Act, with the consent of all the promoters, or by the resolution of the inaugural general meeting.
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| (4) | (Interim Measures) The company which is deemed to have been dissolved pursuant to
Article 15 (3) shall not be considered to have been dissolved until December. 31, 1965, and the measures prescribed in
Article 15 (1) may be taken within the aforesaid period.
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ADDENDUM<Act No. 1687, Mar. 19, 1965>
This Act shall enter into force on the date of its promulgation.
ADDENDUM<Act No. 10372, Jul. 23, 2010>
This Act shall enter into force on the date of its promulgation.