ACT ON SECURITY OVER MOVABLE PROPERTY AND CLAIMS
Act No. 10366, jun. 10, 2010
Amended by Act No. 10580, Apr. 12, 2011
Act No. 10629, May 19, 2011
Act No. 12592, May 20, 2014
Act No. 13953, Feb. 3, 2016
CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to facilitate the borrowing of funds and safety in financial transactions and to contribute to the robust development of the national economy by providing for matters regarding security interests in movable property, obligations, and intellectual property rights, and the registration or record thereof. <Amended by Act No. 10629, May 19, 2011>
The terms used in this Act shall be defined as follows: <Amended by Act No. 10629, May 19, 2011>
| 1. | The term "security agreement" means an agreement for providing a movable asset, obligation, or intellectual property right as security in accordance with this Act, in whatsoever name, including transfer for security; |
| 2. | The term "security interest in movable property" means a registered security interest in movable property (including two or more movable assets or a movable asset expected to be acquired in the future) pursuant to a security agreement; |
| 3. | The term "security interest in an obligation" means a registered security interest in a nominative obligation (including two or more obligations or a prospective obligation) for the payment of money pursuant to a security agreement; |
| 4. | The term "security interest in an intellectual property right" means a registered security interest in an intellectual property right (limited to where a pledge can be established under an Act; the same shall apply hereinafter), such as a patent right, utility model right, design right, trademark right, copyright, and right to a layout design for a semiconductor integrated circuit, in accordance with a particular Act regulating such intellectual property right, under a security agreement; |
| 5. | The term "person who has created a security interest" means a person who has created a security interest in a movable asset, obligation, or intellectual property right in accordance with this Act: Provided, That the foregoing shall apply only to a corporation (referring to a commercial corporation, a corporation prescribed in the Civil Act, a corporation under a special Act, or a foreign corporation; the same shall apply hereinafter) or a person whose trade name is registered in accordance with the Commercial Registration Act, if the property provided as security is a movable asset or obligation; |
| 6. | The term "secured party" means a person who acquires a security interest in a movable asset, obligation, or intellectual property right under this Act; |
| 7. | The term "registration of collateral security" means registration for providing a movable asset or obligation as security in accordance with this Act; |
| 8. | The term "collateral security register" means a backup storage device (including magnetic disks, magnetic tapes, and other electronic information storage medium on which certain registered facts can be recorded and preserved in a similar manner; the same shall apply hereinafter) in which electronic information data on registered facts entered and processed through an electronic information processing system for each person who has created a security interest and which shall be maintained separately for movable property and for obligations; |
| 9. | The term "obligor, etc." means an obligor, a person who has pledged his/her property to secure third party's obligation, or a third party acquiring collateral; |
| 10. | The term "interested party" means a person whose right with regard to an obligor, etc. or collateral is registered in the collateral security register or who has otherwise proved his/her right;an attachment creditor or provisional attachment creditor; or a creditor who has demanded the distribution of dividends with a writ of execution; |
| 11. | The term "registered information" means information prepared by a person designated (hereinafter referred to as "registration officer") by the head of a district court (referring to the chief justice of a branch court where he/she takes charge of the affairs of a registration office), from among court officials, registry officials, administrative officers for registration, and junior administrative officers for registration working with the relevant district court, any of its branch courts or registry offices, in order to identify the secured party, when the holder of a new right is registered in the collateral security register. |
CHAPTER II SECURITY INTERESTS IN MOVABLE PROPERTY
| Article 3 (Collateral for Security Interest in Movable Property) |
| (1) | A corporation or a person with its trade name registered in accordance with the Commercial Registration Act (hereinafter referred to as "corporation, etc.") may file for registration of collateral security, when it provides movable property as security in accordance with a security agreement. |
| (2) | If two or more movable assets (including movable assets expected to be acquired in the future) are provided as security, but it is possible to specify the types, places for storage, and quantity of the assets or identify the assets in any similar manner, such assets may be registered as collateral for a security interest. |
| (3) | Notwithstanding the provisions of paragraphs (1) and (2),any of the following assets shall not be eligible for registration of collateral security: |
| 2. | A movable asset listed in a carriage note, bill of lading, or deposit certificate; |
| 3. | An unregistered bond or other security specified by Presidential Decree. |
| Article 4 (Cancellation of Registration of Trade Name of Person who has Created Security Interest and Effect of Security Interest in Movable Property) |
If registration of the trade name of a person who has created a security interest is cancelled, such cancellation shall not lessen the effectiveness of the security interest already created in movable property.
| Article 5 (Continuing Security Interests) |
| (1) | A security interest in movable property may be created by setting only the maximum amount of the claim secured by collateral and by fixing its amount later in the future. In such cases, any claim discharged or transferred until before such claim is finally fixed shall not affect the security interest already created in the movable property. |
| (2) | In cases under paragraph (1), Interest on a claim shall be deemed included in the maximum amount. |
| Article 6 (Duty to State Clearly of Personswho Intend to Create Security Interests in Movable Property) |
A person who intends to create a security interest in movable property shall clearly state the following matters to the opposite party when he/she executes a collateral security agreement:
| 1. | Whether he/she owns the collateral; |
| 2. | Whether any other right exists with respect to the collateral. |
| Article 7 (Effect of Registration of Collateral Security) |
| (1) | Any acquisition, loss, or alteration of a security interest in movable property by an agreement shall become effective only when the acquisition, loss, or alteration is registered in the collateral security register. |
| (2) | The order of priority of security interests created in one and the same movable property shall be determined by the order of registration. |
| (3) | Except as otherwise provided in any Act, if registration in the collateral security register and delivery (including summary delivery, agreement on possession, and assignment of a claim to return subject matter as provided for the Civil Act) have been completed with respect to one and the same movable property, the order of priority vis-a-vis the interests and rights in such cases shall be determined by the order of such events. |
| Article 8 (Extent of Security Interests in Movable Property) |
A secured party shall be entitled to collect his/her claim, prior to other creditors, from the collateral provided by an obligor, etc. or a third party.
| Article 9 (Indivisibility of Security Interests in Movable Property) |
A secured party may exercise his/her rights until he/she fully collects his/her claim from the entire collateral.
| Article 10 (Extent of Effect of Security Interests in Movable Property) |
The effect of a security interest in movable property shall extend to things fixed to the collateral and its appurtenance: Provided, That the foregoing shall not apply, if any Act or agreement provides for otherwise on the establishment of the interest.
| Article 11 (Effect on Negligence) |
The effect of a security interest in movable property shall extend to the profits that the person who has created the security interest acquires, or is anticipated to acquire, from collateral after the collateral is seized or after the obligor, etc. is demanded to deliver the collateral in accordance with Article 25 (2).
| Article 12 (Scope of Secured Claims) |
A security interest in movable property shall secure principal, interest, penalties, and expenses incurred in exercising the security interest, expenses incurred in preserving collateral, and claims for losses caused by non-performance of the secured obligation or defects in collateral: Provided, That if the parties agree otherwise on the establishment of the security interest, such agreement shall apply.
| Article 13 (Transfer of Security Interests in Movable Property) |
No security interest in movable property shall be separately transferred to any third person from the secured claim.
| Article 14 (Real Subrogation) |
A security interest in movable property may be exercised against money or other articles which the person who has created the security interest is entitled to receive, when the collateral is sold, rented, destroyed, damaged, or expropriated for public services. In such cases, such money or things shall be seized before being paid or delivered.
| Article 15 (Satisfaction with Assets other than Collateral) |
| (1) | Only if a secured party fails to fully collect his/her claim from collateral, he/she may collect the remainder of his/her claim from other assets of the obligor. |
| (2) | Paragraph (1) shall not apply where dividends from other assets are distributed earlier than the distribution of dividends from collateral: Provided, That other creditors may demand the secured party to deposit such dividends with the competent court. |
| Article 16 (Right to Indemnity of Persons Pledging Property to Secure Third Party's Obligation) |
If a person who has created a security interest to secure third party's obligation repays the obligation or is deprived of his/her ownership interest in collateral as a result of the exercise of the security interest in movable property, such person shall have a right to claim the obligor to indemnify in accordance with the provisions on guaranteed obligations of the Civil Act.
| Article 17 (Inspection on Current Status of Collateral and Replenishment of Collateral) |
| (1) | Upon receipt of a demand from a secured party to allow him/her to inspect the current status of collateral, the person who has created a security interest shall not refuse such demand without justifiable grounds. In such cases, electronically identifiable labels may be attached to the property or other necessary measures may be taken in accordance with the relevant agreement in order to inspect the current status of collateral. |
| (2) | If the value of collateral is significantly diminished due to a cause for which the person who has created the security interest is liable, the secured party may demand the person who has created the security interest to reinstate the property or provide adequate collateral. |
| Article 18 (Right of Third Party Acquisitors to Claim Reimbursement of Expenses) |
If a third party who acquired collateral bears expenses necessary or beneficial for the preservation or amelioration of the collateral, he/she may recover such expenses preferentially from the proceeds that the secured party acquires by exercising the security interest over the collateral in accordance with Article 203 (1) or (2) of the Civil Act.
| Article 19 (Right to Claim Return of Collateral) |
| (1) | A secured party may demand the person who possesses collateral to return it to the person who has created the security interest. |
| (2) | If a secured party has title to possess collateral or a person who has createda security interest is unable to have the collateral returned due to certain circumstances, the secured party may demand the person who possesses the collateral to return it to him/her. |
| (3) | Notwithstanding the provisions of paragraphs (1) and (2), a possessor entitled to possess the property may refuses to return it. |
| Article 20 (Right to Claim Abatement or Prevention of Nuisances in Regard to Property Collateral) |
A secured party may demand a person who causes a nuisance with regard to his/her security interest in movable property to abate such nuisance and may demand a person who is engaged in any activity likely to cause a nuisance with regard to his/her security interest in movable property to provide collateral for damages.
| Article 21 (Methods of Exercising Security Interests in Movable Property) |
| (1) | A secured party may file an application for auctioning collateral in order to collect his/her claim. |
| (2) | If any justifiable ground exists, a secured party may take possession of collateral in direct satisfaction of his/her claim or may sell the collateral and collect his/her claim from the proceeds therefrom: Provided, That such disposition shall be subject to the consent of a senior right holder (limited to where such holder has been registered in the collateral register or the secured party is aware of the existence of such senior right holder), if any. |
| Article 22 (Auctioning Procedures for Exercising Security Interests) |
| (2) | If a person who has created a security interest possesses collateral, the proceedings of an auction shall commence with seizure. |
| Article 23 (Procedures for Direct Satisfaction with Collateral) |
| (1) | In order for a secured party to take possession of collateral in direct satisfaction of his/her claim or sell collateral in accordance with Article 21 (2), he/she shall notify the obligor, etc. and interested parties of whom he/she is aware, of the method of exercising his/her security interest in the movable property after the lapse of the payment deadline, and one month shall pass from the date on which such notice is delivered to the obligor, etc. and interested parties: Provided, That the foregoing shall not apply where the collateral is likely to be destroyed or damaged or its value is likely to be rapidly diminished. |
| (2) | Notice given under paragraph (1) shall clearly state the amount of the secured claim, the appraised value or estimated proceeds from sale of the collateral, and the cause for which it is intended to collect the claim directly from the collateral or to sell the collateral. |
| (3) | A secured party shall pay to the obligor, etc. the remainder (hereinafter referred to as "settlement surplus") of the appraised amount or proceeds from sale of collateral (hereinafter referred to as "proceeds from sale") after subtracting his/her claim therefrom. In such cases, when any senior security interest exists in the movable property provided as collateral, the claims secured by such senior security interest shall be included in calculating the amount of claims. |
| (4) | When a secured party pays the settlement surplus to the obligor, etc. to take possession of collateral in direct satisfaction of his/her claim, he/she shall acquire ownership in the collateral. |
| (5) | If proceedings of an auction commence with respect to collateral within the period specified in any of the following subparagraphs, the secured party shall discontinue the proceedings for direct satisfaction of his/her claim: |
| 1. | If possession of the security interest in movable property is taken in direct satisfaction of claims: Before paying the settlement surplus or before the period specified in paragraph (1) elapses if there is no settlement surplus; |
| 2. | If the collateral is sold to apply proceeds thereof to satisfy claims: Before the secured party executes a sale contract with a third party. |
| (6) | The details and the methods of notification under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 24 (Status of Acquisitors, etc. of Collateral) |
When a secured party or a purchaser acquires ownership interest in collateral by enforcing the security interest in movable property under Article 21 (2), the secured party's rights and other rights not assertable against the secured party shall be extinguished.
| Article 25 (Possession of Collateral) |
| (1) | If a secured party takes possession of collateral, he/she may retain the collateral until his/her secured claim is fully satisfied: Provided, That the secured party shall have no defense against a senior right holder. |
| (2) | A secured party, where necessary to enforce his/her security interest, may demand the obligor, etc. to provide collateral. |
| (3) | If a secured party takes possession of collateral, he/she shall maintain the collateral with due care as a good fiduciary. |
| (4) | In cases under paragraph (3), the secured party may collect profits from collateral and apply such profits to satisfy his/her claim prior to other creditors: Provided, That non-cash profits may be sold by auction or acquired in direct satisfaction of claims or may be sold to repay claims with proceeds therefrom. |
| Article 26 (Exercise of Rights of Junior Right Holders) |
| (1) | A junior right holder may exercise his/her right in settlement surplus to which the obligor, etc. is entitled under Article 23 (3) until the settlement surplus is paid in the order of priority, and the secured party shall pay the settlement surplus upon request of the junior right holder. |
| (2) | In order to enforce a security interest in movable property in accordance with Article 21 (2), a junior right holder may demand auction of collateral before the end of the period specified in any subparagraph of Article 23 (5): Provided, That he/she may demand auction of the collateral only within the period specified in Article 23 (1) if the due date for the secured claim has not come. |
| (3) | When a junior right holder exercises his/her right in accordance with paragraph (1), he/she shall issue a statement and certificate of his/her claim to the secured party within the limit of his/her secured claim. |
| (4) | When a secured party pays settlement surplus to a junior right holder in exchange for a statement and certificate of his/her claim in accordance with paragraph (3), the claim to pay the settlement surplus to the obligor, etc. shall be discharged to the extent of the payment. |
| (5) | A person who intends to deter a person from exercising his/her rights under paragraph (1) shall seize or provisionally seize the settlement surplus. |
| Article 27 (Deposit of Proceeds from Sale, etc. into Court) |
| (1) | If proceeds from sale of collateral are seized or provisionally seized or if a person asserts a right over proceeds from sale of collateral, the secured party may deposit the proceeds fully or partially into the court having jurisdiction over the registration of the secured party's corporation or trade name. In such cases, the secured party shall notify interested parties of whom the secured party is aware and the person who seizes or provisionally seizes the proceeds from sale, etc. of the collateral or who asserts a right over the proceeds from sale. |
| (2) | If proceeds from sale, etc. of collateral are deposited intothe court in accordance with paragraph (1) after having been seized or provisionally seized, the right of the obligor, etc. to claim the payment of the deposit is deemed to have been seized or provisionally seized. |
| (3) | No secured party shall claim refund of the deposit. |
| Article 28 (Repayment and Interruption of Enforcement) |
| (1) | When a security interest in movable property is enforced, the obligor, etc. may pay secured obligations to the secured party by the deadline specified in any subparagraph of Article 23 (5) and may demand the secured party to cancel the registration of the collateral security. In such cases, the secured party shall immediately discontinue the enforcement of his/her security interest in the movable property. |
| (2) | If a secured party sustains a loss due to discontinuation of enforcement of his/her security interest in movable property in accordance with paragraph (1), the obligor, etc. shall compensate the secured party for the loss. |
| Article 29 (Joint Security, Distribution of Dividends, Subrogation by Junior Right Holders) |
| (1) | Where a security interest is created in two or more movable assets provided as security for the same claim and proceeds from sale of such collateral are distributed simultaneously, the dividend to the claim shall be determined in proportion to the proceeds from sale of each piece of collateral. |
| (2) | When some of the proceeds from the sale of collateral referred to in paragraph (1) are distributed first, the claim may be fully collected from the proceeds. In such cases, the holder of a junior security interest in the movable property sold by auction may exercise the security interest in subrogation of the holder of a senior security interest up to the amount that the holder of the senior security interest can collect by enforcing his/her security interest in any other movable property provided as security. |
| (3) | Paragraphs (1) and (2) shall apply mutatis mutandis where a secured party enforces his/her security interest in movable property in accordance with Article 21 (2): Provided, That if is impossible to determine the proceeds from sale of each piece of collateral in accordance with paragraph (1), the dividend to the claim shall be determined in proportion to the appraised value or estimated proceeds from sale of each piece of collateral specified in the notice given under Article 23 (2). |
| Article 30 (Interested Party's Petition for Provisional Injunction, etc.) |
| (1) | If a secured party enforces his/her security interest in movable property in an illegal manner, an interested party may file a petition for provisional injunction with the court having jurisdiction over the registration of the secured party's corporation, or trade name, seeking an order to discontinue enforcement of the security interest in the movable property or to take other necessary measures. |
| (2) | Before rendering a decision on a petition filed in accordance with paragraph (1), the court may order an interested party to temporarily suspend execution with or without security provided to the secured party or to continue execution with security provided to the secured party. |
| (3) | An interested party may file an objection pursuant to the Civil Execution Act with respect to an auction held to enforce a security interest. |
| Article 31 (Agreement on Enforcement of Security Interest in Movable Property) |
| (1) | A secured party and a person who has created a security interest may agree on a procedure for enforcement different from that prescribed by this Act: Provided, That an agreement that the secured party may dispose of collateral or acquire collateral in direct satisfaction of his/her claim without giving notice under Article 23 (1) or without giving another notice before the lapse of one month after such notice is given shall not be effective. |
| (2) | No person shall violate an interested party's right by the agreement referred to in the main sentence of paragraph (1). |
| Article 32 (Bona Fide Acquisition of Collateral) |
Articles 249 through 251 of the Civil Act shall apply mutatis mutandis to the acquisition of ownership interest or pledge in the collateral subject to a security interest in movable property under this Act.
| Article 33 (Provisions Applicable Mutatis Mutandis) |
CHAPTER III SECURITY INTERESTS IN OBLIGATIONS
| Article 34 (Purpose of Security Interests in Obligations) |
| (1) | When a corporation, etc. provides a nominative obligation as security for the payment of money in accordance with a security agreement, it may file for registration of collateral security. |
| (2) | If two or more obligations (including prospective obligations, irrespective of whether the obligor, etc. is identified) are provided as security, but it is possible to specify the types of the obligations, the causes and dates of occurrence of the obligations, or identify the obligations in any similar manner, such obligations may be registered as collateral for a security interest. |
| Article 35 (Effect of Registration of Collateral Security) |
| (1) | Any acquisition, loss, or alteration of a security interest in an obligation by an agreement shall be a valid defense against a third party, other than the obligor of a nominative obligation (hereinafter referred to as "third-party obligor"), only when the acquisition, loss, or alteration is registered in the collateral security register. |
| (2) | A secured party or a person who has created a security interest (referring to an assignor or assignee, if a security interest in an obligation is assigned) shall not have a valid defense against a third-party obligor, unless he/she notifies the third-party obligor of the registration by delivering the certificate of registration specified in Article 52 or the third-party obligor accepts it. |
| (3) | Where registration in the collateral security register is completed with regard to the same obligation and a third-party obligor is notified of the registration or accepts the registration in accordance with Article 349 or 450 (2) of the Civil Act, the secured person or the assignee of an obligation provided as security may assert his/her rights against a third party, other than the third-party obligor, in order of registration and the arrival or acceptance of the notice, except as otherwise provided in any other Act. |
| Article 36 (Enforcement of Security Interest in Obligation) |
| (1) | A secured person may directly claim the repayment of an obligation provided as collateral for a security interest within the extent of the secured claim. |
| (2) | If an obligation provided as collateral for a security interest falls due earlier than the secured claim, the secured party may demand the third-party obligor to deposit the due amount into the competent court. From the time the third-party obligor deposits the due amount into the court, the security interest in the obligation shall exist over the deposit. |
| (3) | A secured party may enforce a security interest in an obligation by the methods of execution prescribed by the Civil Execution Act in addition to the methods prescribed in paragraphs (1) and (2) for the enforcement of a security interest in an obligation. |
| Article 37 (Provisions Applicable Mutatis Mutandis) |
The provisions of Chapter II on security interests in movable property and Articles 348 and 352 of the Civil Act shall apply mutatis mutandis to security interests in obligations to the extent that is not contrary to their nature.
CHAPTER IV REGISTRATION OF COLLATERAL SECURITY
| Article 38 (Rights subject to Registration) |
A creation, transfer, alteration, cancellation, or extension of a security interest in movable property or a security interest in an obligation shall be registered in the collateral security register.
| Article 39 (Competent Registry Offices) |
| (1) | Administrative affairs related to registration as specified in Article 38 (hereinafter referred to as "administrative affairs for registration") shall be carried out by the district courts, their branch courts or registry offices designated and publicly announced by the Chief Justice of the Supreme Court. |
| (2) | The district court, its branch court or registry office having jurisdiction over the place specified in any of the following classifications, among the district courts, their branch courts or registry offices publicly announced by the Chief Justice of the Supreme Court pursuant to paragraph (1) with regard to administrative affairs for registration shall be deemed the competent registry office: <Amended by Act No. 12592, May 20, 2014> |
| 1. | If the person who has created a security interest is a corporation: Its head office or principal place of business; |
| (3) | The Chief Justice of the Supreme Court may delegate administrative affairs under the jurisdiction of a registry office to another registry office. |
| Article 40 (Execution of Administrative Affairs for Registration) |
| (1) | Administrative affairs for registration shall be executed by a registration officer. |
| (2) | A registration officer shall execute administrative affairs for registration by entering details subject to registration in the collateral security register in order of filing through the electronic information processing system. |
| (3) | A registration officer who executes administrative affairs for registration shall record his/her identification number or shall take other measures to identify the registration officer who executes administrative affairs for registration in accordance with the Supreme Court Regulations. |
| (1) | Except as otherwise provided in any other Act, a secured party and a person who has created a security interest shall jointly file an application for the registration of collateral security. |
| (2) | An application for alteration or correction of a description of a registered person may be filed unilaterally by the registered person involved. |
| (3) | An application for registration according to a judgment may be filed unilaterally by the party entitled to registration or the party responsible for registration, whoever wins the case, while an application for registration of inheritance or other comprehensive succession may be filed unilaterally by the party entitled to registration. |
| Article 42 (Methods of Filing Application for Registration) |
An application for the registration of collateral security shall be filed in one of the following ways: <Amended by Act No. 13953, Feb. 3, 2016>
| 1. | Filing in person: An applicant or his/her agent shall appear at the registry office to file a written application: Provided, That if the agent is an attorney-at-law or certified judicial scrivener (including a law firm, limited liability law firm, law firm partnership, corporation of certified judicial scrivener, or limited liability corporation of certified judicial scrivener), a clerk specified by the Supreme Court Regulations may be authorized to appear at the registry office to file an application for registration; |
| 2. | Electronic filing: An application may be filed through the electronic information processing system as prescribed by the Supreme Court Regulations. |
| Article 43 (Documents or Electronic Documents Required to File for Registration, Matters to be Stated in Written Application, and Methods of Preparing) |
| (1) | In order to file an application for registration of collateral security, the following documents or electronic documents (hereinafter referred to as "documents") shall be submitted or transmitted: |
| 1. | An application in the form prescribed by he Supreme Court Regulations; |
| 2. | A document, etc. proving the grounds for registration; |
| 3. | A document, etc. proving a third party's permission, consent, or acceptance with respect to the grounds for registration, if such permission, consent, or acceptance is required; |
| 4. | A document, etc. proving the agent's authority, if an application for registration is filed by an agent; |
| 5. | Other documents, etc. prescribed by the Supreme Court Regulations in order to specify the relevant parties. |
| (2) | An applicant shall enter the following matters in the application filed under paragraph (1) 1 and shall print his/her name and affix his/her seal or signature or digital signature as specified in subparagraph 2 of Article 2 of the Digital Signature Act: <Amended by Act No. 13953, Feb. 3, 2016> |
| 1. | Matters specified in Article 47 (2) 1 through 9; |
| 2. | The name of the agent (if the agent is a law firm, limited liability law firm, law firm partnership, corporation of certified judicial scrivener, or limited liability corporation of certified judicial scrivener, the name thereof) and address (or the head office or principal place of business, if the agent is a firm or partnership), if an application for registration is filed by an agent; |
| 3. | The information registered by the party responsible for registration, if the party entitled to registration and the party responsible for registration jointly file an application or if the party responsible for registration unilaterally files an application for registration: Provided, That such information shall not be recorded in the intial registration for the creation of a security interest; |
| 4. | Descriptions of the registry office; |
| Article 44 (Application Fees) |
A person who intends to file for registration in the collateral security register shall pay fees as prescribed by the Supreme Court Regulations.
| Article 45 (Receipt of Applications for Registration) |
| (1) | An application for registration shall be deemed filed at the time the purpose of registration, the applicant's name or trade name, and other information specified by the Supreme Court Regulations on the application for registration are electronically recorded in the electronic information processing system. |
| (2) | If a registration officer completes registration of a transaction, the registration shall take effect from the time the application for registration is filed. |
| Article 46 (Rejection of Applications) |
A registration officer shall reject an application by a determination stating the grounds therefor only in cases falling under any of the following subparagraphs: Provided, That the foregoing shall not apply where an error in the application is correctable and the applicant corrects the error on the same day:
| 1. | If the case is not within the jurisdiction of the registry office; |
| 2. | If the case is not subject to registration; |
| 3. | If the application is filed by a person with no power to file; |
| 4. | If the application is filed in person not by a party or his/her agent; |
| 5. | If the application does not conform to the form prescribed by the Supreme Court Regulations; |
| 6. | If any description recorded in the application is inconsistent with any detail of a document attached thereto; |
| 7. | If the application is not accompanied by a document required for application; |
| 8. | If any description in the application is inconsistent with any description already recorded in the collateral security register; |
| 9. | If the applicant fails to pay the application fee specified in Article 44 or fails to perform a duty imposed by any other Act in connection with application for registration. |
| Article 47 (Preparation of Register and Matters to be Recorded) |
| (1) | The collateral security register shall be prepared by entering electronic information data of each person who has created a security interest on matters registered with respect to a movable asset or obligation provided as collateral in the electronic information processing system. |
| (2) | Matters to be recorded in the collateral security register are as follows: <Amended by Act No. 12592, May 20, 2014> |
| 1. | The name or trade name of the person who has created a security interest and matters specified as follows: |
| (a) | If the person who has created the security interest is a corporation: Its head office or principal place of business and its corporate registration number; |
| (b) | If the person who has created the security interest is a person whose trade name is registered pursuant to Article 30 of the Commercial Registration Act: His/her name, address, resident registration number, and place of business; |
| 2. | The obligor's name and address (referring to the trade name or name of the corporation and its head office or principal place of business, if the obligor is a corporation); |
| 3. | The secured party's name, address, and resident registration number (referring to the trade name or name and the head office or principal place of business and the corporate registration number, if the secured party is a corporation); |
| 4. | The place of business or office in the Republic of Korea, if the person who has created the security interest, obligor, or secured party is a foreign corporation: Provided, That matters specified by the Supreme Court Regulations shall be recorded, if such person or party has no place of business or office in the Republic of Korea; |
| 5. | The grounds for registration and the date of registration of collateral security; |
| 6. | Matters specified by the Supreme Court Regulations as necessary to identify the movable asset or obligation subject to the registration of collateral security; |
| 7. | The amount or maximum amount of the secured claim; |
| 8. | A copy of an agreement specified in the proviso to Article 10 or the proviso to Article 12, if any; |
| 9. | The term of existence of the security interest; |
| Article 48 (Notice of Registered Information) |
When a registration officer completes registration for creation or transfer of a security interest, he/she shall notify the party entitled to the registration of the registered information: Provided, That the person who has created the security interest shall also be notified of the registered information if the registration is for the initial creation of a security interest.
| Article 49 (Term of Existence of Security Interest and Registration for Extension) |
| (1) | The term of existence of a security interest subject to this Act shall not exceed five years: Provided, That it may be renewed to a period not exceeding five years. |
| (2) | If it is intended to renew the term of existence under paragraph (1), the person who has created the security interest and the secured party shall file an application for registration of extension before the end of the term. |
| (3) | The following matters shall be recorded in the collateral security register for registration of extension under paragraph (2): |
| 1. | The intent to extend the term of existence; |
| 2. | The term of existence after extension; |
| Article 50 (Registration of Cancellation) |
| (1) | A person who has created a security interest and a secured party may file an application for registration of cancellation in any of the following cases: |
| 1. | Where the security interest does not take effect or becomes ineffective because of the termination or cancellation of the security agreement or due to any other cause; |
| 2. | Where the movable property provided as collateral is destroyed or the obligation provided as collateral is extinguished; |
| 3. | Where the security interest is extinguished due to any other cause. |
| (2) | In order to register cancellation under paragraph (1), the following matters shall be recorded in the collateral security register: |
| 1. | The intent to cancel the registration of collateral security: Provided, That if the registration of collateral security is partially cancelled, such intent and the collateral subject to the registration for cancellation shall be recorded; |
| 2. | The grounds for and date of registration for cancellation; |
| Article 51 (Correction, etc. of Registration) |
| (1) | If the collateral security register contains any error or omission, a person who has created a security interest or a secured party may file an application for registration of the correction thereof: Provided, That if a registration officer causes such error or omission, the registration officer may correct it ex officio. |
| (2) | If the trade name, name, head office, principal place of business, or place of business (hereinafter referred to as "trade name, etc.") recorded on the collateral security registered in accordance with the corporate register or trade name register of a person who has created a security interest is changed, a registration officer in charge of registration of collateral security may ex officio change the relevant description in the collateral security register. |
| (3) | A registration officer in charge of the corporate register or trade name register of a person who has created a security interest shall notify a registration officer in charge of the registration of collateral security without delay after completing the registration of the changed trade name, etc. of the person who has created the security interest so as to change such description ex officio in accordance with paragraph (2). |
| Article 52 (Inspection of Collateral Security Register and Issuance of Certificates) |
| (1) | Any person may pay fees and inspect registered records or request that the competent registry office issue documents fully or partially certifying the records. |
| (2) | The scope of and methods for inspection or issuance of the collateral security register under paragraph (1) and fees therefor shall be prescribed by the Supreme Court Regulations. |
| Article 53 (Filing Objections, etc.) |
| (1) | A person who is dissatisfied with a decision or disposition rendered by a registration officer may file an objection with the competent district court. |
| (2) | A written objection under paragraph (1) shall be submitted to the competent registry office. |
| (3) | No objection filed pursuant to paragraph (1) shall have the effect of suspending execution. |
| Article 54 (Restriction on Grounds for Objection) |
No objection may be filed pursuant to Article 53 on the ground of a new fact or new evidencing method.
| Article 55 (Measures Taken by Registration Officers) |
| (1) | If a registration officer finds that an objection is reasonable, he/she shall make an appropriate disposition. |
| (2) | If a registration officer finds that an objection is groundless, he/she shall transfer the case to the competent district court within three days, with his/her written opinion attached thereto. |
| (3) | If an objection is filed after registration is completed, the competent registration officer shall notify the following parties of the objection and shall take measures under paragraph (2): |
| 1. | If a third party files the objection: The person who has created the security interest and the secured party; |
| 2. | If the person who has created the security interest or the secured party files the objection: His/her counter party. |
| Article 56 (Determination on Objection and Appeal) |
| (1) | The competent district court shall make a determination on an objection, stating the grounds therefor. In such cases, when an objection is found reasonable, the court shall order the competent registration officer to make an appropriate disposition and shall notify the petitioner and the parties under Article 55 (3) of the order. |
| Article 57 (Provisions Applicable Mutatis Mutandis) |
CHAPTER V SPECIAL PROVISIONS ON INTELLECTUAL PROPERTY RIGHTS PROVIDED AS SECURITY
| Article 58 (Registration of Security Interests in Intellectual Property Rights) |
| (1) | If an intellectual property right holder provides two or more intellectual property rights to secure one and the same claim under an agreement, a security interest under this Act may be registered in the original patent register, copyright register, or other official register relevant to such intellectual property rights (hereinafter referred to as "register"). <Amended by Act No. 10629, May 19, 2011> |
| (2) | In order for an intellectual property right to be provided as security pursuant to paragraph (1), the relevant registers shall be administered by one and the same administrative agency, and the type and scope of the eligible intellectual property rights shall be specified or the eligible intellectual property rights shall be identifiable in any similar manner. <Amended by Act No. 10629, May 19, 2011> |
[This Article Wholly Amended by Act No. 10629, May 19, 2011]
| Article 59 (Effect of Registration) |
| (1) | Any acquisition, loss, or alteration of a security interest in an intellectual property right by an agreement shall have the same effect as the registration of any acquisition, loss, or alteration of a pledge on an intellectual property right. <Amended by Act No. 10629, May 19, 2011> |
| (2) | Except as otherwise provided in any Act, if a security interest in an intellectual property right is registered in accordance with this Act and a pledge is also registered in the same intellectual property right under a particular Act that regulates the intellectual property right, the order of priority vis-a-vis the security interest and the pledge shall be determined by the order of registration. <Amended by Act No. 10629, May 19, 2011> |
| Article 60 (Exercise of Rights by Parties Secured by Intellectual Property Rights) |
A secured party may exercise his/her security interest in accordance with a particular Act that regulates the relevant intellectual property right. <Amended by Act No. 10629, May 19, 2011>
| Article 61 (Provisions Applicable Mutatis Mutandis) |
The provisions of Chapter II on security interests in movable property and Article 352 of the Civil Act shall apply mutatis mutandis to security interests in intellectual property rights to the extent not contrary to their nature: Provided, That the foregoing shall not apply where the provisions of Article 21 (2) differ from the provisions of a particular Act that regulates the intellectual property right at issue. <Amended by Act No. 10629, May 19, 2011>
CHAPTER VI SUPPLEMENTARY PROVISIONS
| Article 62 (Ensuring Safety in Registered Information) |
| (1) | A registration officer shall take appropriate measures to prevent the divulgence, destruction, or obliteration of registered information under his/her control and other measures necessary for the security management of registered information. |
| (2) | A registration officer or a person who engaged or currently engages in administrative affairs for registration in a registry office shall not divulge confidential information acquired in the course of performance of his/her duties in connection with the entry or management of registered information. |
| (3) | No person shall acquire registered information with intent to register false information in the collateral security register by filing an application or request for registration or provide registered information while aware of such intent. |
| Article 63 (Supreme Court Regulations) |
Except as provided for in this Act, matters necessary for the enforcement of this Act shall be prescribed by the Supreme Court Regulations.
CHAPTER VII PENAL PROVISIONS
| Article 64 (Penal Provisions) |
Any person who falls under any of the following subparagraphs shall be punished by imprisonment with prison labor for not more than two years or by a fine not exceeding ten million won:
| 1. | A person who divulges confidential information with respect to the entry or management of registered information, in violation of Article 62 (2); |
| 2. | A person who acquires registered information with intent to register false information in the collateral security register, in violation of Article 62 (3) or a person who provides registered information while aware of such intent; |
| 3. | A person who maintains registered information acquired unlawfully with the intent under subparagraph 2. |
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force two years after the date of its promulgation.
Article 2 (Applicability)
This Act shall apply to security agreements executed on or after the date this Act enters into force.
Article 3 Omitted.
Article 4 (Transitional Measure concerning Designation of Registration Officers)
A public official in general service (excluding persons appointed after passing an employment examination held on or after January 1, 2002) who works with a court as a court official as at the time this Act enters into force may be designated as a registration officer, notwithstanding the provisions of subparagraph 11 of Article 2.
ADDENDA <Act No. 10580, Apr. 12, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10629, May 19, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force two months after the date of its promulgation: Provided, That the provisions of Article 2 (9) of the Addenda shall enter into force on June 11, 2012.
Article 2 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. 13953, Feb. 3, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 8 Omitted.