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ENFORCEMENT DECREE OF THE SPECIAL ACT ON THE CORPORATE REVITALIZATION

Presidential Decree No. 27441, Aug. 9, 2016

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to provide for matters delegated from the Special Act on the Corporate Revitalization and matters necessary for the enforcement of the aforesaid matters.
 Article 2 (Methods, etc., of Corporate Restructuring)
(1) “Methods prescribed by Presidential Decree, such as a merger, demerger, the transfer, acquisition and holding of shares, and the incorporation of a company" provided for in subparagraph 2 (a) of Article 2 of the Special Act on the Corporate Revitalization (hereinafter referred to as the "Act"), means the following methods:
1. Merger under Article 174 of the Commercial Act, simple merger under Article 527-2 of the aforesaid Act, or small-scale merger under Article 527-3 of the aforesaid Act;
2. Demerger, or demerger and merger under Article 530-2 of the Commercial Act;
3. Swap, transfer, acquisition or possession of shares, such as all-inclusive share swap under Article 360-2 of the Commercial Act; simplified share swap under Article 360-9 of the aforesaid Act; small-scale share swap under Article 360-10 of the aforesaid Act; or all-inclusive share transfer under Article 360-15 of the aforesaid Act;
4. Transfer, acquisition, lease, etc., of business under Article 374 of the Commercial Act, or transfer, acquisition, lease, etc., of simplified business under Article 374-3 of the aforesaid Act;
5. Establishment of a company under the Commercial Act;
6. Transfer and acquisition of assets for business, such as production facilities;
7. Other methods similar to those referred to subparagraphs 1 through 6, which the head of a competent authority deems able to improve business productivity.
(2) "Activities prescribed by Presidential Decree" provided for in subparagraph 2 (b) of Article 2 of the Act, means the following:
1. Activities that promote the efficiency of methods of production, sale and provision of products, services, etc. (hereinafter referred to as "product, etc.");
2. Activities that develop, produce and provide a new product, etc., to increase the relative importance of the sale of the relevant product, etc., in gross sales;
3. Activities that reduce the production cost of a product, etc., by improving methods of using or purchasing raw materials, parts, semi-finished goods, etc.;
4. Other activities similar to those under subparagraphs 1 through 3, which the head of a competent authority deems able to improve business productivity.
 Article 3 (State of Oversupply)
"Cases prescribed by Presidential Decree" provided for in subparagraph 4 of Article 2 of the Act means reduced return on sales, slowdown in changes of product prices, etc., compared with cost, lowering operation rate of production equipment, etc., increased inventory-to-sales ratio of products, raw materials, etc., and other situations in which indices showing the management conditions of the type of industry and a company have worsened.
 Article 4 (Scope of Application)
"Company meeting requirements prescribed by Presidential Decree" provided for in subparagraph 1 of Article 4 of the Act means a company to which the head of a competent authority deems it necessary to apply the Act, because it falls under either of the following:
1. A company the details of the business and activities of which have an important effect on the stabilization of employment or economic activities in a region where its place of business is located;
2. A company with high-tech or core industrial technology required to prevent the divulgence of, and to utilize, the relevant industrial technology.
CHAPTER II ESTABLISHMENT OF CORPORATE RESTRUCTURING PROMOTION SYSTEM
 Article 5 (Qualification of Members of Corporate Restructuring Plan Review Committee)
"Persons who have extensive knowledge and experience in corporate restructuring prescribed by Presidential Decree" provided for in Article 6 (5) 3 of the Act means any of the following:
1. A person who holds or held office as at least associate professor at a university under subparagraphs 1 through 6 of Article 2 of the Higher Education Act or the office equivalent thereto at an officially recognized research institute, who has at least ten years experience in research related to industrial and company policy, company reorganization, etc.;
2. An attorney-at-law or certified public accountant, who has at least ten years experience in corporate legal affairs, corporate accounting, company reorganization or corporate restructuring;
3. Other persons who have at least 15 years experience in affairs related to company reorganization, or corporate restructuring.
 Article 6 (Operation, etc., of Corporate Restructuring Plan Review Committee)
(1) Two chairpersons (hereinafter referred to as the "Co-chairpersons") of the Corporate Restructuring Plan Review Committee (hereinafter referred to as the "Review Committee") referred to in Article 6 (1) of the Act, shall jointly convene meetings of the Review Committee and preside at the meetings alternately.
(2) Where the Co-chairpersons intend to convene a meeting, they shall notify each member of the Review Committee of the date, time, venue and agenda of the meeting by no later than seven days before the meeting in writing or by electronic means: Provided, That the foregoing shall not apply in urgency.
(3) The Review Committee shall pass resolutions with a majority of incumbent members present, and with the consent of a majority of the members present.
(4) One administrative secretary shall be assigned to the Review Committee to conduct its affairs, and a public official of Grade 4 belonging to the Ministry of Trade, Industry and Energy, appointed by the Minister of Trade, Industry and Energy, shall become the administrative secretary.
(5) In addition to matters provided for in paragraphs (1) through (4), the Co-chairpersons shall jointly prescribe matters necessary for the formation and operation of the Review Committee following a resolution passed by the Review Committee.
 Article 7 (Amendment to Insignificant Matters in Guidelines for Implementation of Corporate Restructuring Plans)
"Amendment to insignificant matters prescribed by Presidential Decree" provided for in the proviso to Article 7 (3) of the Act, means an alteration of a simple term or phrase without amending the details of guidelines for the implementation of corporate restructuring plans (hereinafter referred to as "guidelines for the implementation of corporate restructuring plans") under Article 7 (1) of the Act, or correction of obvious errors.
 Article 8 (Implementation, etc., of Basic Research Related to Corporate Restructuring)
The Minister of Trade, Industry and Energy may conduct fact-finding surveys related to corporate restructuring and gather and analyze statistical data (hereinafter referred to as "basic research") on the following, pursuant to Article 8 (1) of the Act:
1. Statistics related to criteria to determine oversupply, etc., such as return on sales, and the rate of operation of production facilities;
2. Statistics related to sales, employment, liabilities, etc., of a company under corporate restructuring;
3. Matters necessary for the improvement of regulations and support related to corporate restructuring;
4. Other matters the Minister of Trade, Industry and Energy deems necessary to deliberate on a corporate restructuring plan.
CHAPTER III FILING FOR APPROVAL OF CORPORATE RESTRUCTURING PLANS
 Article 9 (Targets to Improve Productivity and Financial Soundness)
"Matters prescribed by Presidential Decree" provided for in Article 9 (2) 2 of the Act, means the level of management indicators related to productivity and financial soundness, such as the return on assets and interest coverage ratio, a company is to achieve by implementing a corporate restructuring plan upon completion of corporate restructuring.
 Article 10 (Return, etc., of Corporate Restructuring Plan)
(1) "Grounds for return prescribed by Presidential Decree, such as false or incorrect entries in the corporate restructuring plan" provided for in Article 9 (7) 1 of the Act, means any of the following:
1. Where a company fails to enter or falsely enters matters under Article 9 (2) of the Act into the corporate restructuring plan;
2. Where a company fails to submit related data to ascertain matters under the subparagraphs of Article 9 (2) of the Act.
(2) "Standards prescribed by Presidential Decree" provided for in Article 9 (7) 4 of the Act means standards established in the guidelines for the implementation of a corporate restructuring plan, based upon the changes in long-term performance and trends of management indicators of productivity, such as the return on assets, tangible asset turnover and added value of the industry and a company, and management indicators of financial soundness, such as the interest coverage ratio, various management conditions, etc.
(3) "Cases prescribed by Presidential Decree" provided for in Article 9 (7) 5 of the Act means cases where the head of a competent authority deems it impractical for a company to achieve the goals presented in a corporate restructuring plan when considering the management and financial conditions of the company which intends to file for approval of the corporate restructuring plan (hereinafter referred to as "applicant company"), domestic and overseas market conditions, etc.
 Article 11 (Review, Approval, etc., of Corporate Restructuring Plan)
(1) "Small and medium-sized business not exceeding a certain scale prescribed by Presidential Decree" provided for in the proviso to Article 10 (1) of the Act means a small business referred to in Article 2 (2) of the Framework Act on Small and Medium Enterprises.
(2) "Period prescribed by Presidential Decree" provided for in the former part of Article 10 (2) of the Act means 30 days, but where it is impractical to examine matters within 30 days because matters to be examined are substantial or complicated, this means 60 days.
(3) "Details prescribed by Presidential Decree" provided for in the former part of Article 10 (2) of the Act means the following:
1. Whether the relevant type of industry is in oversupply;
2. Whether any matters constitute grounds for return under Article 9 (7) of the Act.
(4) "Period prescribed by Presidential Decree" provided for in the latter part of Article 10 (2) of the Act means 30 days, but where it is impractical to deliberate on matters within 30 days because matters to be deliberated are substantial or complicated, and where the Deliberate Committee has passed a resolution, this means 60 days.
(5) "Where the head of the competent authority determines that a corporate restructuring plan includes matters prescribed by Presidential Decree, such as succession of management rights, strengthening the corporate governance of persons who have a special relationship, bestowing unjust enrichment on affiliate companies of a conglomerate restricted from cross-shareholding" provided for in Article 10 (6) of the Act means any of the following:
1. Where the head of the competent authority deems that the objectives of a corporate restructuring plan are for succession of management rights or strengthening the corporate governance of entities which have a special relationship when considering the merger ratio, stock swap ratio, change, etc., of the largest shareholder or major shareholders following the implementation of a corporate restructuring plan;
2. Where the head of a competent authority deems that the objectives of a corporate restructuring plan of a conglomerate restricted from cross-shareholding, fall under any of the following:
(a) Unfair support to affiliate companies falling under any of the items of Article 23 (1) 7 of the Monopoly Regulation and Fair Trade Act;
(b) Unfair support to affiliate companies falling under any of the subparagraphs of Article 23-2 (1) of the Monopoly Regulation and Fair Trade Act.
 Article 12 (Publication of Approval of Corporate Restructuring Plans)
(1) Where the head of the competent authority approves a corporate restructuring plan, he/she shall publish the details thereof in the Official Gazette and on the website of the competent authority pursuant to Article 10 (8) of the Act.
(2) Where an applicant company and the Review Committee are notified of the determination of approval from the head of the competent authority, the company and the Review Committee shall immediately publish the details notified, including the necessity and important matters of the corporate restructuring plan in the Official Gazette and on the website of the relevant company pursuant to Article 10 (9) of the Act.
 Article 13 (Reporting, etc. on Implementation of Corporate Restructuring Plans)
(1) A company that has obtained approval of a corporate restructuring plan (hereinafter referred to as "approved company") from the head of a competent authority pursuant to Article 10 of the Act, shall report whether it has executed the corporate restructuring plan, the results of corporate structuring, etc., every year from the date it obtains approval, to the head of the competent authority pursuant to Article 11 (1) of the Act; and where the corporate restructuring plan is completed, it shall report the final results within three months after such completion.
(2) Where it is necessary to check the current status of the implementation of the corporate restructuring plan due to important management changes in the approved company, changing external conditions, or at the request of interested parties, such as shareholders or creditors, the head of the competent authority may require the approved company to submit data on the corporate restructuring and management conditions pursuant to Article 11 (2) of the Act.
(3) An approved company requested to submit data pursuant to paragraph (2), shall submit such data to the head of the competent authority within 30 days from the date it is requested to do so.
(4) The head of the competent authority may request an approved company to correct the approved corporate restructuring plan and other conditions of implementation within a fixed period not exceeding six months, pursuant to Article 11 (3) of the Act.
(5) An approved company requested to make corrections pursuant to paragraph (4), shall take necessary measures within the fixed period and notify the head of a competent authority of the result thereof.
(6) The head of a competent authority shall publish whether the approved company has executed the corporate restructuring plan under paragraph (1) and the outcomes of the execution thereof, and matters of which corrections are requested under paragraph (4) in the Official Gazette and on the website of the competent authority pursuant to Article 11 (4) of the Act.
(7) "Matters prescribed by Presidential Decree, such as whether the approved company has achieved its targets to improve productivity and financial soundness" provided for in Article 11 (6) of the Act means the following:
1. Results of the implementation of detailed improvements included in the corporate restructuring plan, such as the amount of and methods for raising funds, an employment, and investment plan;
2. Whether the company has achieved its goals to improve productivity and financial soundness in the corporate restructuring plan;
3. Whether the corporate restructuring has contributed to reducing or eradicating oversupply in the relevant type of industry;
4. Other matters deemed necessary by the head of a competent authority to evaluate the implementation of the corporate restructuring plan.
(8) The head of the competent authority shall publish matters evaluated pursuant to Article 11 (6) of the Act in the Official Gazette and on the website of the competent authority pursuant to Article 11 (6) of the Act.
 Article 14 (Amendment to Corporate Restructuring Plans)
"Circumstances prescribed by Presidential Decree" provided for in Article 12 (1) 3 of the Act means any of the following:
1. Where the approved company faces serious difficulties in its management because it has a sharp decline in its products sales, etc., lacks funds or human resources due to unpredictable changes in market conditions;
2. Where it is difficult for the approved company to secure raw materials due to unpredictable changes in the raw materials market;
3. Where an incident, such as unpredictable suspension of business or shutdown, occurs.
 Article 15 (Revocation of Approval of Corporate Restructuring Plans)
(1) "Cases prescribed by Presidential Decree, such as succession of management rights, strengthening corporate governance of persons in a special relationship, the provision of unfair profits to affiliate companies of a conglomerate restricted from cross-shareholding" provided for in Article 13 (1) 2 of the Act, means cases falling under Article 11 (5).
(2) "Where it is verified that an approved company has committed a serious offense prescribed by Presidential Decree" provided for in Article 13 (1) 5 of the Act means where it is verified that the approved company has been sentenced for violation of the Commercial Act, the Financial Investment Services and Capital Markets Act, the Monopoly Regulation and Fair Trade Act, the Punishment of Tax Evaders Act, the Framework Act on Local Taxes, while it implements corporate restructuring during the period in which the corporate restructuring plan is implemented.
 Article 16 (Procedures for Redemption)
(1) Where a company whose approval of a corporate restructuring plan under Article 14 (1) of the Act is revoked (hereinafter referred to as "company with revoked approval") receives support in national or local taxes pursuant to Article 27 of the Act, the head of the competent authority shall notify the Commissioner of the National Tax Service or the head of a local government of the revocation of the approval so that the Commissioner of the National Tax Service or the head of the local government may fully or partially recover the tax support pursuant to Acts related to taxation.
(2) Where the head of a competent authority intends to fully or partially recover monetary benefits provided pursuant to Articles 28 through 30 of the Act to a company with revoked approval pursuant to the former part of Article 14 (2) of the Act, he/she shall notify, in writing, the relevant company with revoked approval of the following. In such cases, the deadline for payment of money to be recovered, shall be at least 30 days from the date of notification:
1. Matters to be redeemed and grounds for redemption;
2. Amount to be redeemed;
3. Payment deadline and receiving agency.
(3) Upon receipt of notification referred to in paragraph (2), where a company with revoked approval fails to redeem by the payment deadline, the head of a competent authority shall compel the company to redeem it, fixing a period of at least 15 days.
(4) Upon receipt of notification referred to in paragraph (2), where a company with revoked approval fails to redeem by the payment deadline, the interest for the period from the day after the deadline to the date of payment shall be added to the amount of redemption, which has been notified. In such cases, the statutory interest rate under Article 3 (1) of the Act on Special Cases concerning Expedition etc. of Legal Proceedings shall apply thereto.
(5) Where an institution has provided monetary benefits to a company with revoked approval pursuant to Articles 28 through 30 of the Act, the head of the competent authority shall immediately notify the head of the relevant institution of the revocation of the approval so that the head of the relevant institution fully or partially recover monetary benefits he/she has provided pursuant to paragraphs (2) through (4).
CHAPTER IV SUPPORT FOR CORPORATE RESTRUCTURING
 Article 17 (Exceptions to Small-Scale Mergers, etc.)
"Percentage prescribed by Presidential Decree" provided for in Article 16 (2) of the Act means ten percent.
 Article 18 (Funding)
(1) "Cases prescribed by Presidential Decree" provided for in Article 28 (2) 1 of the Act means where a company invests in equipment for the improvement of performance and efficiency, such as the introduction of new equipment or the improvement of existing equipment.
(2) "Cases prescribed by Presidential Decree" provided for in Article 28 (2) 2 of the Act means where a company invests to acquire land for the construction, relocation or extension of a factory, build the factory or improve the working conditions.
(3) "Cases prescribed by Presidential Decree" provided for in Article 28 (2) 3 of the Act means where a company engages in management innovation activities accompanied by consulting, marketing, market research, product analysis, etc.
(4) "Cases prescribed by Presidential Decree" provided for in Article 28 (2) 4 of the Act means where a company invests and engages in innovation activities related to the changes, etc., of business structures to improve productivity.
(5) A company which intends to receive funding under Article 28 (1) of the Act shall submit a corporate restructuring plan, specifying matters for which funding is required, when it files for approval of the corporate restructuring plan under Article 9 (1) of the Act.
 Article 19 (Support for Research and Development Activities)
(1) The head of a competent authority and the head of a local government may fully or partially subsidize the expenses incurred in engaging in the following activities, to an approved company pursuant to Article 29 (1) of the Act:
1. Research and development activities concerning the production and development of products, etc.;
2. Research and development activities for the improvement of methods of production and provision of products, etc.;
3. Research and development activities for cost reduction.
(2) A company that intends to obtain support under Article 29 (1) of the Act shall submit a corporate restructuring plan, specifying matters for which support is required, when it files for approval of the corporate restructuring plan under Article 9 (1) of the Act.
 Article 20 (Support for Development of Aptitude and Stabilization of Employment)
(1) Where approved companies, or employees of the approved companies wish to obtain support under Article 31 (2) of the Act for the stabilization of employment and the development of aptitude, the head of a competent authority may recommend the approved companies or the employees thereof as the companies or employees eligible for preferential support to the Minister of Employment and Labor.
(2) Upon receipt of a recommendation under paragraph (1), the Minister of Employment and Labor shall consider such recommendation first, and procedures related to support referred to in paragraph (1) shall be governed by related statutes, such as the Employment Insurance Act or the Act on the Development of Workplace Skills of Workers.
CHAPTER V SUPPORT FOR RESOLVING DIFFICULTIES DUE TO REGULATIONS
 Article 21 (Verification of Interpretation and Application of Statutes, etc.)
(1) A company, applicant company, and approved company that request the head of a competent authority to verify the interpretation and application of statutes, local laws and regulations, administrative rules, etc. (hereinafter referred to as "statutes, etc.") that apply to the relevant corporate restructuring and relevant business activities pursuant to Article 32 (1) of the Act, shall prepare a written request stating the specific details of statutes, etc., and submit such written request to the head of the competent authority.
(2) "Period prescribed by Presidential Decree" provided for in Article 32 (2) 1 of the Act and the former part of Article 32 (2) 2 means 30 days, respectively, and where it is impractical to notify the interpretation and application within 30 days because matters for which verifications are requested are substantial or complicated, this means 60 days, respectively.
 Article 22 (Improvement of Administrative Regulations by Means of Proposals Made by Companies)
(1) Any applicant company or approved company that request to improve administrative regulations (referring to administrative regulations under Article 2 (1) 1 of the Framework Act on Administrative Regulations; hereinafter the same shall apply) pursuant to Article 33 (1) of the Act shall submit a written request to improve administrative regulations provided for in guidelines for the implementation of the corporate restructuring plan to the head of a competent authority.
(2) A written request for the improvement of administrative regulations under paragraph (1) shall include the following:
1. Matters that require to improve administrative regulations;
2. Grounds for and purpose of requesting to improve administrative regulations;
3. A plan to mitigate adverse effects that may occur when administrative regulations are improved;
4. Statutes related to improving administrative regulations and an agency having jurisdiction over the administrative regulations.
(3) The head of a competent authority, the head of a relevant agency and the head of a local government who decides to allow the improvement of administrative regulations pursuant to Article 33 of the Act, shall publish the details of the implementation of expected improvements in administrative regulations including the following in the Official Gazette or official bulletin and on the website of the relevant authority or agency, and devise measures necessary to improve administrative regulations after gathering consensus, such as public hearings, and consultations with relevant agencies pursuant to Article 34 of the Act:
1. Matters subject to the improvement of administrative regulations;
2. Grounds for and purpose of decision to improve administrative regulations;
3. A plan to mitigate adverse effects that may occur when administrative regulations are improved;
4. Statutes related to improving administrative regulations and an agency having jurisdiction over the administrative regulations;
5. Deadline for the completion of measures to improve administrative regulations.
CHAPTER VI SUPPLEMENTARY PROVISIONS
 Article 23 (Entrustment of Affairs)
(1) The Minister of Trade, Industry and Energy may entrust affairs referred to in Article 36 (1) of the Act to any of the following institutions, corporations, or organizations exclusively in charge:
3. Other institutions, corporations, or organizations that the Minister of Trade, Industry and Energy deems to have experts and organs exclusively in charge of supporting corporate restructuring.
(2) Where the Minister of Trade, Industry and Energy entrusts affairs pursuant to paragraph (1), he/she shall publish the name, representative and location of an institution entrusted with affairs, and the details of affairs entrusted in the Official Gazette.
 Article 24 (Administrative Fines)
Guidelines for the imposition of fines for negligence under Article 38 of the Act, shall be as specified in attached Table.
 Article 25 (Penalty Surcharges)
"Amount of monetary support prescribed by Presidential Decree" provided for in Article 39 of the Act means the aggregate amount of monetary support under Articles 27 through 30 of the Act. In such cases, the amount of monetary support following tax support under Article 27 of the Act shall be based on the exempted or reduced amount calculated, as prescribed by statutes that provide the basis for support, such as the Restriction of Special Taxation Act.
ADDENDUM
This Decree shall enter into force on August 13, 2016.