ENFORCEMENT DECREE OF THE SMALL AND MEDIUM ENTERPRISE COOPERATIVES ACT
Wholly Amended by Presidential Decree No. 20263, Sep. 10, 2007
Amended by Presidential Decree No. 20331, Oct. 23, 2007
Presidential Decree No. 20728, Feb. 29, 2008
Presidential Decree No. 20998, Sep. 10, 2008
Presidential Decree No. 21772, Oct. 7, 2009
Presidential Decree No. 21834, Nov. 20, 2009
Presidential Decree No. 21835, Nov. 20, 2009
Presidential Decree No. 22156, May 4, 2010
Presidential Decree No. 22372, Sep. 9, 2010
Presidential Decree No. 22653, Jan. 28, 2011
Presidential Decree No. 24317, Jan. 16, 2013
Presidential Decree No. 24354, Feb. 13, 2013
Presidential Decree No. 24432, Mar. 23, 2013
Presidential Decree No. 25050, Dec. 30, 2013
Presidential Decree No. 25840, Dec. 9, 2014
Presidential Decree No. 26091, Feb. 10, 2015
Presidential Decree No. 26467, Aug. 3, 2015
Presidential Decree No. 27751, Dec. 30, 2016
Presidential Decree No. 28213, Jul. 26, 2017
| Article 2 (Principal Offices of Cooperatives, etc.) |
| Article 3 (Classification of Business Types) |
| (1) | The classification of business types for the cooperatives prescribed in Article 3 (2) of the Act, or federations carrying the names of business types (hereinafter referred to as "business type federation") shall follow the minor grouping, sub-grouping and sub-sub grouping in accordance with the Korean Standard Industrial Classification prepared and publicly notified by the Commissioner of the Statistics Korea pursuant to Article 22 (1) of the Statistics Act (hereinafter referred to as the "Korean Standard Industrial Classification"): Provided, That the same shall not apply where deemed particularly necessary by the Minister of SMEs and Startups in consideration of the nature of business types. <Amended by Presidential Decree No. 20331, Oct. 23, 2007; Presidential Decree No. 21772, Oct. 7, 2009; 28213, Jul. 26, 2017> |
| (2) | Notwithstanding the main sentence of paragraph (1), wholesale business or retail business may be classified in accordance with minor grouping, sub-grouping and sub-sub grouping without distinguishing wholesale business from retail business in the medium grouping in accordance with the Korean Standard Industrial Classification. <Amended by Presidential Decree No. 21772 Oct. 7, 2009> |
| (3) | "Related types of business" in Article 13 (1) of the Act means any of the following business types: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | Business types related to production, processing or repair processes; |
| 2. | Business types deemed by the Minister of SMEs and Startups to have mutual relations when considering the nature of the business types. |
| Article 4 (Exception from Qualifications for Cooperative Members) |
| (1) | "Any person other than a small and medium entrepreneur" in Article 13 (2) of the Act means persons deemed necessary to smoothly conduct the business of cooperatives among those running enterprises which are not small and medium enterprises. |
| (2) | In cases of taking persons other than small and medium entrepreneurs as cooperative members pursuant to Article 13 (2) of the Act, the number thereof shall not exceed 1/20 of the total number of cooperative members of the relevant cooperative. |
| Article 5 (Special Cooperative Members) |
Relevant small and medium enterprises which are eligible to become special cooperative members prescribed in Article 14 of the Act shall be small and medium enterprises producing raw and subsidiary materials or facility materials necessary for cooperative members to produce products.
| Article 6 (Contribution, etc.) |
| (2) | Contributions shall be made in full amount at once as prescribed by the articles of incorporation of cooperatives, industrial cooperatives or federations. |
| (3) | Where a cooperative member pays a contribution, the cooperative, industrial cooperative and federation shall deliver a certificate of contribution as prescribed by the articles of incorporation. |
| Article 7 (Minimum Total Amount of Contribution) |
| 1. | National cooperatives prescribed in Article 6 (1) 1 of the Act (hereinafter referred to as "national cooperative"): 80 million won; |
| 2. | Regional cooperatives prescribed in Article 6 (1) 2 of the Act (hereinafter referred to as "regional cooperative"): 40 million won. |
| 3. | Industrial cooperatives: 40 million won; |
| 4. | Federations: 40 million won. |
| Article 8 (Authorization for Establishment) |
| (1) | A person who intends to obtain authorization for establishing a cooperative, industrial cooperative or federation shall file a request for authorization for establishment with the competent administrative agency prescribed in Article 12 (1) and (2) of the Act (hereinafter referred to as "competent administrative agency") along with documents necessary for the establishment of the cooperative within four weeks of the date of termination of an inaugural assembly. <Amended by Presidential Decree No. 21772, Oct. 7, 2009; Presidential Decree No. 22372, Sep. 9, 2010> |
| (2) | Upon receipt of a request pursuant to paragraph (1), the competent administrative agency shall, if the purpose of establishment and business plan are deemed feasible, authorize the establishment after reviewing the details of the request by considering the opinions of the Chairperson of the Korea Federation of SMEs (hereinafter referred to as the "KBIZ") and of the heads of relevant administrative agencies. |
| (3) | When authorizing establishment as prescribed in paragraph (2), the competent administrative agency may, if the articles of incorporation of the cooperative, industrial cooperative or federation are against the statutes or unfair, order to amend the articles of incorporation and if the qualification of an executive officer is deemed unsuitable, order to replace such executive officer and re-elect a new executive officer. |
| Article 9 (Restriction on Joint Business Activities) |
| (1) | The joint business activities prescribed in Article 35 (1) 1 of the Act shall not include the act of making a joint decision on prices. |
| (2) | "Business activities prescribed by Presidential Decree" in the proviso to Article 93 (1) of the Act means the business of joint purchase of raw materials and joint sale of products: Provided, That the business of joint shops directly operated by cooperatives' federations carrying the names of administrative districts (hereinafter referred to as "local federation") among the business of joint sale of products shall be excluded. |
| Article 9-2 (Duty to Support Negotiation and Mediation of Subcontract Consideration) |
| (1) | The duty to support the negotiation and mediation of subcontract consideration prescribed in Articles 35 (1) 13 and 82 (1) 11 of the Act shall include the following matters, respectively: <Amended by Presidential Decree No. 26467, Aug. 3, 2015> |
| 4. | Investigation and provision of materials on applications for mediation of subcontract consideration, etc. filed by subcontractors who are cooperative members. |
| (2) | The duty to support the mediation of subcontract consideration prescribed in Article 93 (1) 14 of the Act shall include the matters prescribed in paragraph (1) 1, 2 and 4. <Newly Inserted by Presidential Decree No. 26467, Aug. 3, 2015> |
[This Article Newly Inserted by Presidential Decree No. 22653, Jan. 28, 2011]
| Article 10 (Formulation, etc. of Business Plans) |
| (1) | In order to formulate business plans, and revenue and expenditure budgets prescribed in Article 36 (including cases where Article 36 applies mutatis mutandis in Articles 83 and 94 of the Act) of the Act, regional cooperatives, industrial cooperatives, national cooperatives and federations shall follow the guidelines for formulating business plans and revenue and expenditure budgets the Chairperson of the KBIZ announces. |
| (2) | The Chairperson of the KBIZ shall determine the guidelines for formulating business plans and revenue and expenditure budgets prescribed in paragraph (1) and submit them to the Minister of SMEs and Startups. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| Article 11 (Inspection of Collective Standards) |
A competent administrative agency may have the cooperative inspect whether the products produced by persons who are not the cooperative members comply with the collective standards prescribed in Article 38 (1) of the Act, pursuant to Article 38 (4) of the Act, in any of the following cases: <Amended by Presidential Decree No. 21835, Nov. 20, 2009> | 1. | Where the quality of products is so inferior that a substantial improvement in quality is needed; |
| Article 12 (Requests for Authorization, etc.) |
| (1) | Where a regional cooperative intends to obtain authorization or approval from the Special Metropolitan City Mayor, Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor or Governor of the Special Self-Governing Province (hereinafter referred to as "City Mayor/Do Governor") for the following matters, it shall go through the federation or the KBIZ to which the relevant cooperative is affiliated as a member: <Amended by Presidential Decree No. 21772, Oct. 7, 2009; Presidential Decree No. 26467, Aug. 3, 2015> |
| 1. | Matters concerning the amendment of the articles of incorporation prescribed in Article 47 (2) of the Act; |
| 2. | Matters concerning the enactment, amendment or repeal of bylaws prescribed in Article 130 (3) of the Act. |
| (2) | Where an industrial cooperative intends to obtain authorization or approval from the City Mayor/Do Governor for the following matters, it shall go through the cooperative to which the relevant industrial cooperative is affiliated as a cooperative member, or through the federation or the KBIZ to which the relevant industrial cooperative is affiliated as a member: <Amended by Presidential Decree No. 26467, Aug. 3, 2015> |
| 1. | Matters concerning the amendment of the articles of incorporation prescribed in Article 47 (2) of the Act which applies mutatis mutandis in Article 85 of the Act; |
| 2. | Matters concerning the enactment, amendment or repeal of bylaws prescribed in Article 130 (3) of the Act. |
| (3) | Where a national cooperative or a federation intends to obtain authorization from the Minister of SMEs and Startups for the amendment of the articles of incorporation pursuant to Article 47 (2) of the Act or Article 96 of the Act, it shall go through the KBIZ. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| (4) | "Matters prescribed by Presidential Decree" in Article 47 (2) of the Act means the matters in the subparagraphs of Articles 29 (1) (including cases where Article 29 (1) applies mutatis mutandis in Article 81 of the Act), 91 and 104 of the Act. |
| Article 13 (Qualification Standards for Full-Time Directors) |
"Persons qualified as prescribed by Presidential Decree" in Articles 50 (4) and 95 (3) of the Act means the following persons among persons having abundant knowledge and experience in small and medium enterprises: <Amended by Presidential Decree No. 21835, Nov. 20, 2009; Presidential Decree No. 26467, Aug. 3, 2015> | 1. | A person who has served as a public official of grade V or in a higher position or as a member in general service of the Senior Executive Service for at least seven years or as a public official of grade VI for at least ten years; |
| 2. | A person who has worked as a director of a division or in a higher position at the KBIZ for at least seven years or has worked as the head of a department or in a higher position at a regional cooperative, industrial cooperative, national cooperative and federation for at least seven years; |
| 5. | A person who has worked as an assistant professor or in a high position at university or as a commissioned officer equal to or above field-grade officers for at least four years; |
| 7. | A person who holds a license equivalent to those in subparagraphs 1 through 6 and is recognized by the Chairperson of the KBIZ. |
| Article 14 Deleted. <by Presidential Decree No. 27751, Dec. 30, 2016> |
| Article 15 (Division of Cooperatives) |
Pursuant to Article 77 (2) of the Act, a cooperative may be divided where it is involved with not less than two business types listed in the sub-sub group in accordance with the Korean Standard Industrial Classification: Provided, That, if particularly necessary in consideration of the unique nature of the type of business conducted by the cooperative, actual status of operation of the cooperative, etc. it shall follow the standards the Minister of SMEs and Startups determines separately. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
| Article 16 (Registration of Agents) |
| (1) | Where the Chairperson of the KBIZ appoints an agent pursuant to Article 106 (9) of the Act, he/she shall register the following matters at the location of the KBIZ, branch or branch office in which the agent is placed, within two weeks. The same shall apply where registered matters are changed: <Amended by Presidential Decree No. 25467, Aug. 3, 2015> |
| 1. | The name and address of an agent; |
| 2. | The KBIZ, branch or branch office in which an agent is placed; |
| 3. | In the case of limiting the authority of an agent, the details of such limitation. |
| (2) | The Chairperson of the KBIZ shall file an application for the registration of an agent prescribed in paragraph (1), and the application shall be accompanied by documents evidencing that the agent is the one prescribed in Article 106 (9) of the Act and, in the case of limiting the authority of the agent, documents evidencing it. <Amended by Presidential Decree No. 25467, Aug. 3, 2015> |
| Article 17 (Persons Ineligible to Subscribe to Mutual Aid Fund for Small and Medium Enterprises) |
"Small and Medium entrepreneurs specified by Presidential Decree, including those who fail to achieve the purpose of managing mutual aid fund for small and medium enterprises" in the proviso to Article 109 (2) of the Act means the following persons: <Amended by Presidential Decree No. 22372, Sep. 9, 2010> | 1. | Deleted. <by Presidential Decree No. 22372, Sep. 9, 2010> |
| 2. | A person who has already subscribed to the mutual aid fund for small and medium enterprises; |
| 3. | A person who falls into one or more of the business types and causes prescribed by the Essential Principles of Fund Operation prescribed in Article 30 for the smooth operation of the mutual aid fund for small and medium enterprises (hereinafter referred to as the "Essential Principles of Fund Operation") |
| Article 18 (Subscription, etc. to Mutual Aid Fund for Small and Medium Enterprises) |
| (1) | A person who intends to subscribe to the mutual aid fund for small and medium enterprises shall conclude a contract with the mutual aid fund for small and medium enterprises (hereinafter referred to as "mutual aid contract"), stipulating that he/she shall pay mutual aid deposits prescribed in Article 109 (1) 1 of the Act (hereinafter referred to as "mutual aid deposit for small and medium enterprises") and be provided with mutual aid loans prescribed in Article 111 (1) 1 of the Act (hereinafter referred to as "mutual aid money for small and medium enterprises") and enterprising funds for joint purchases and sales prescribed in subparagraph 2 of the same paragraph, as prescribed by the Essential Principles of Fund Operation. |
| (2) | In cases of paragraph (1), the date of subscribing to the mutual aid fund for small and medium enterprises shall be the date on which a small and medium enterpriser pays the first mutual aid deposit for small and medium enterprises after concluding a mutual aid contract prescribed in paragraph (1). |
| Article 19 (Payment of Mutual Aid Deposits for Small and Medium Enterprises) |
A person who subscribes to the mutual aid fund for small and medium enterprises shall pay mutual aid deposits for small and medium enterprises as stipulated in the mutual aid contract every month or periodically, as prescribed by the Essential Principles of Fund Operation.
| Article 20 (Separate Management of Mutual Aid Fund for Small and Medium Enterprises and Fund Operation Plans) |
| (1) | When operating and managing the mutual aid fund for small and medium enterprises pursuant to Article 110 of the Act, the KBIZ shall manage the mutual aid fund for small and medium enterprises separately form general accounts. |
| 1. | Plans for creating the mutual aid fund for small and medium enterprises by financial resource; |
| 2. | Plans for using the mutual aid fund for small and medium enterprises; |
| 3. | Other matters deemed necessary, as prescribed by the Essential Principles of Fund Operation. |
| Article 21 (Provision of Loans, etc. from Mutual Aid for Small and Medium Enterprises) |
| (1) | Where any of the following causes occurs to a subscriber to the mutual aid fund for small and medium enterprises, the mutual aid fund for small and medium enterprises shall provide such subscriber with loans from the mutual aid money for small and medium enterprises: |
| 1. | Where a subscriber to the mutual aid fund for small and medium enterprises has difficulty recovering the amount of credit sales, bills receivable, outstanding amounts, etc. (hereinafter referred to as "bond, etc.") due to a bankruptcy, etc. of entrepreneurs who are trade opponents; |
| 2. | Where a subscriber to the mutual aid fund for small and medium enterprises is likely to end up in bankruptcy due to reasons prescribed in the Essential Principles of Fund Operation, such as delayed recovery of bonds, etc., related to business. |
| (2) | Notwithstanding paragraph (1), where a subscriber to the mutual aid fund for small and medium enterprises falls into any of the following cases, the whole or part of mutual aid money for small and medium enterprises shall not be provided as loans, as prescribed by the Essential Principles of Fund Operation: <Amended by Presidential Decree No. 24354, Feb. 13, 2013> |
| 1. | Where the period of paying mutual aid deposits for small and medium enterprises is less than three months; |
| 2. | Where an act of negligence in redeeming the mutual aid money for small and medium enterprises, which has been already provided as a loan, is discovered; |
| 3. | Where an act of negligence in recovering bonds, etc., is discovered. |
| Article 22 (Limits, etc. for Loans from Small and Medium Enterprise Mutual Aid Money) |
| (1) | Mutual aid money for small and medium enterprises shall be provided as a loan within the extent of the amount equivalent to 30 times the total amount of mutual aid deposits for small and medium enterprises of subscribers to the mutual aid fund for small and medium enterprises, as prescribed by the Essential Principles of Fund Operation. |
| (2) | Matters necessary for the interest rates, periods of redemption, overdue interests, etc. of mutual aid money for small and medium enterprises shall be prescribed by the Essential Principles of Fund Operation. |
| Article 23 (Provision of Enterprising Funds for Joint Purchase and Sale) |
| (1) | The mutual aid fund for small and medium enterprises shall provide enterprising funds for joint purchases and sales prescribed in Article 111 (1) 2 of the Act (hereinafter referred to as "enterprising fund') to the subscribers to the mutual aid fund for small and medium enterprises through the cooperatives, industrial cooperatives or business type federations thereof. |
| (2) | Matters necessary for conditions of providing the enterprising funds prescribed in paragraph (1) shall be prescribed by the Essential Principles of Fund Operation. |
| Article 24 (Use of Mutual Aid Fund for Small and Medium Enterprises) |
| (2) | Matters necessary for the detailed methods, procedures, etc. of operating the surplus fund of the mutual aid fund for small and medium enterprises prescribed in Article 111 (3) of the Act shall be prescribed by the Essential Principles of Fund Operation, within the extent not impairing the stability and profitability of the mutual aid fund for small and medium enterprises. |
| Article 25 (Accumulation and Operation of Reserve for Bad Debts of Mutual Aid Money) |
| (1) | The amount of reserves for bad debts of mutual aid money, which is received from a small and medium enterpriser who has taken out a loan from mutual aid money from small and medium enterprises pursuant to Article 112 of the Act shall be prescribed by the Essential Principles of Fund Operation, within the extent of 1/10 of the amount of loan from mutual aid money from small and medium enterprises. |
| (2) | Reserves for bad debts of mutual aid money shall not be used for purposes other than the purpose of appropriation for costs necessary to compensate for bad debts incurred from loans from mutual aid money from small and medium enterprises and to recover such loans. |
| (3) | Other matters necessary for accumulating and operating reserves for bad debts of mutual aid money shall be prescribed by the Essential Principles of Fund Operation. |
| Article 26 (Head of Mutual Aid Team) |
| (1) | The small and medium business mutual aid team prescribed in Article 113 (1) of the Act shall have a leader (hereinafter referred to as the "head of the mutual aid team") |
| (2) | The Chairperson of the KBIZ shall appoint and dismiss the head of the mutual aid team by obtaining approval from the Minister of SMEs and Startups. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| (3) | The head of the Mutual Aid Business Corps shall represent the mutual aid team and exercise general supervision over the affairs of the mutual aid team. |
| (4) | The term of office of the head of the mutual aid team shall be three years, on condition that he/she may be reappointed. |
| Article 27 (Organization of Fund Management Committee) |
| (1) | The Chairperson of the KBIZ shall become the Chairperson of the fund management committee prescribed in Article 113 (2) of the Act (hereinafter referred to as the "management committee"), and the following persons shall become the members thereof: <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 21835, Nov. 20, 2009; Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | A person designated by the Minister of Strategy and Finance and by the Minister of SMEs and Startups from among public officials of grade III or members in general service of the Senior Executive Service of the Ministry of Strategy and Finance and the Ministry of SMEs and Startups who are in charge of budget related to the mutual aid fund for small and medium enterprises; |
| 2. | The head of the mutual aid team; |
| 6. | Not more than four persons commissioned by the Minister of SMEs and Startups upon recommendation by the Chairperson of the KBIZ among persons having abundant knowledge and experience in small and medium enterprises. |
| (2) | The term of office of the members commissioned pursuant to paragraph (1) 6 shall be two years, on condition that they may be reappointed. |
| Article 28 (Functions of Management Committee) |
The Management Committee shall deliberate and make resolutions on the following matters concerning the operation and management of the mutual aid fund for small and medium enterprises:
| 1. | Matters concerning the enactment and amendment of regulations for managing the mutual aid fund for small and medium enterprises, such as the Essential Principles of Fund Operation; |
| 2. | Matters concerning the formulation and revision of draft fund management plans and settlement of accounts; |
| 3. | Other matters concerning the operation and management of the mutual aid fund for small and medium enterprises, which the Chairperson refers to meetings. |
| Article 29 (Operation of Management Committee) |
| (1) | The Chairperson of the management committee shall convene and preside over meetings of the management committee. |
| (2) | Where the Chairperson of the Management Committee is unable to conduct his/her duties due to unavoidable causes, the head of the Mutual Aid Business Corps shall act for him/her. |
| (3) | A majority of the members of the management committee shall constitute a quorum and any decision thereof shall require a concurring vote of at least a majority of those present. |
| (4) | The chairperson of the management committee shall determine matters necessary for the operation of the committee other than the matters provided for in paragraphs (1) through (3) by undergoing resolutions by the committee. |
| Article 30 (Essential Principles of Fund Operation) |
| (1) | The Chairperson of the KBIZ shall prescribe detailed matters necessary for operating and managing the mutual aid fund for small and medium enterprises in the Essential Principles of Fund Operation. |
| (2) | Where the Chairperson of the KBIZ intends to determine or amend the Essential Principles of Fund Operation, he/she shall obtain an approval from the Minister of SMEs and Startups therefor. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| (3) | In order to approve the Essential Principles of Fund Operation pursuant to paragraph (2), the Minister of SMEs and Startups shall pre-consult with the Minister of Strategy and Finance. <Amended by Presidential Decree No. 20728, Feb. 29, 2008; Presidential Decree No. 28213, Jul. 26, 2017> |
| Article 31 (Organization of Administrative Committee of Mutual Aid Fund for Small and Micro Enterprises) |
| (1) | The Chairperson of the KBIZ shall become the Chairperson of the Administrative Committee of Mutual Aid Fund for Small and Micro Enterprises prescribed in Article 118-2 (1) of the Act (hereinafter referred to as "Administrative Committee of Mutual Aid Fund") and the following persons shall become the members thereof: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | One person nominated by the Minister of SMEs and Startups among public officials of grade III or members in general service of the Senior Executive Service of the Ministry of SMEs and Startups who are in charge of affairs related to small and micro enterprises; |
| 2. | The head of the mutual aid team; |
| 4. | Not more than seven persons commissioned by the Minister of SMEs and Startups upon recommendation by the Chairperson of the KBIZ among those who have engaged in the areas of small and medium enterprises, mutual aid, insurance, finance and law and have abundant knowledge and experience in small and medium enterprises. |
| (2) | The term of office of the members commissioned pursuant to paragraph (1) 4 shall be two years, on condition that they may be reappointed. |
[This Article Wholly Amended by Presidential Decree No. 20998, Sep. 10, 2008]
| Article 32 (Functions of Administrative Committee of Mutual Aid Fund) |
The Administrative Committee of Mutual Aid Fund shall deliberate and make resolutions on the following matters concerning the operation and management of the mutual aid for small and micro enterprises: <Amended by Presidential Decree No. 20998, Sep. 10, 2008>
| 1. | Matters concerning the enactment and amendment of regulations for operating and managing the mutual aid for small and micro enterprises, such as the Essential Principles of Mutual Aid Management prescribed in Article 41 (hereinafter referred to as the "Essential Principles of Mutual Aid Management"); |
| 2. | Matters concerning the formulation and revision of mutual aid management plans for small and micro enterprises and settlement of revenues and expenditures prescribed in Article 36 (2); |
| 3. | Other matters concerning the operation and management of the mutual aid for small and micro enterprises, which the Chairperson refers to meetings. |
| Article 33 (Operation of Administrative Committee of Mutual Aid Fund) |
| (1) | The Chairperson of the Administrative Committee of Mutual Aid Fund shall convene and preside over meetings of the Administrative Committee of Mutual Aid Fund. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| (2) | Where the Chairperson of the Administrative Committee of Mutual Aid Fund is unable to conduct his/her duties due to unavoidable causes, the mutual aid team leader shall act in his/her stead. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| (3) | A majority of the members of the Administrative Committee of Mutual Aid Fund shall constitute a quorum and any decision thereof shall require a concurring vote of at least a majority of those present.<Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| (4) | The Chairperson of the Administrative Committee of Mutual Aid Fund shall prepare and keep minutes of meetings. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| (5) | The Chairperson of the Administrative Committee of Mutual Aid Fund shall determine matters necessary for the operation of the Mutual Aid Management Committee other than those provided for in paragraphs (1) through (4) by undergoing deliberations and resolutions by the Mutual Aid Management Committee. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| Article 34 (Subscription, etc. to Mutual Aid for Small and Micro Enterprises) |
| (1) | A person who intends to subscribe to the mutual aid for small and micro enterprises pursuant to Article 116 of the Act shall conclude a contract (hereinafter referred to as "mutual aid for small and micro enterprises contract") with the KBIZ, stipulating that he/she shall pay mutual aid deposits prescribed in subparagraph 1 of Article 117 of the Act (hereinafter referred to as "mutual aid deposit for small and micro enterprises") and receive payments from the mutual aid money prescribed in subparagraph 1 of Article 118 of the Act (hereinafter referred to as "mutual aid money for small and micro enterprises"), as prescribed by the Essential Principles of Mutual Aid Operation. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| (2) | In cases of paragraph (1), the date of subscribing to the mutual aid for small and micro enterprises shall be the date on which the representatives of small and micro enterprises pay the first mutual aid deposit for small and micro enterprises after concluding mutual aid contracts for small and micro enterprises. |
| (3) | A subscriber to the mutual aid for small and micro enterprises prescribed in paragraph (1) shall pay mutual aid deposits for small and micro enterprises to the KBIZ every month or periodically, as prescribed by the Essential Principles of Mutual Aid Operation. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| Article 35 (Persons Ineligible to Subscribe to Mutual Aid for Small and Micro Enterprises) |
"Persons specified by Presidential Decree, including those who have already joined the mutual aid fund" in the proviso to Article 116 (1) of the Act means any of the following persons: <Amended by Presidential Decree No. 20998, Sep. 10, 2008; Presidential Decree No. 22156, May 4, 2010> | 1. | Deleted; <by Presidential Decree No. 22156, May 4, 2010> |
| 2. | A person who has already subscribed to the one as at the date of subscribing to the mutual aid for small and micro enterprises; |
| 3. | A person for whom one year has not passed since the KBIZ cancelled his/her mutual aid contract for small and micro enterprises due to any of the following causes: |
| (a) | Where a subscriber to the mutual aid for small and micro enterprises fails to pay mutual aid deposits for small and micro enterprises for 12 months; |
| (b) | Where a subscriber to the mutual aid for small and micro enterprises is paid or intends to be paid mutual aid money for small and micro enterprises by false or other improper means; |
| 4. | Other persons who fall into one or more of the categories of causes prescribed by the Essential Principles of Mutual Aid Operation for the smooth management and operation of the mutual aid for small and micro enterprises. |
| Article 36 (Separate Management of mutual aid for small and micro enterprises and Mutual Aid Operation Plans) |
| (1) | When managing and operating funds to operate the mutual aid for small and micro enterprises prescribed in Article 115 of the Act (hereafter referred to as "mutual aid fund for small and micro enterprises" in this Article), the KBIZ shall manage such funds separately from other accounts. |
| (2) | The KBIZ shall formulate a mutual aid operation plan for small and micro enterprises (hereinafter referred to as "mutual aid operation plan") by undergoing deliberations and resolutions by the Mutual Aid Management Committee each fiscal year and report such plan to the Minister of SMEs and Startups 20 days before the commencement of the relevant fiscal year. The same shall apply to any revision thereof. <Amended by Presidential Decree No. 20998, Sep. 10, 2008; Presidential Decree No. 28213, Jul. 26, 2017> |
| (3) | Mutual aid operation plans shall include the following matters: |
| 1. | Plans for revenues of the mutual aid fund for small and micro enterprises; |
| 2. | Plans for the use of the mutual aid fund for small and micro enterprises ; |
| 3. | Other matters deemed necessary according to the Essential Principles of Mutual Aid Operation. |
| Article 37 (Causes of Mutual Aid and Payment of Mutual Aid Money) |
| (1) | "When an event or cause to grant mutual aid as specified by Presidential Decree occurs" in subparagraph 1 of Article 118 of the Act means the following cases: |
| 1. | Where a small or micro enterprise closes down business (including cases where a person who has subscribed to the mutual aid for small and micro enterprises in the status of individual business transfers the entire business to a person or persons other than his/her spouse or children, on condition that cases where a person who has subscribed to the mutual aid for small and micro enterprises in the status of individual business closes down business to make an in-kind contribution to establish a corporation shall be excluded) or dissolves (limited to corporations); |
| 2. | Where a subscriber to the mutual aid for small and micro enterprises dies; |
| 3. | Where a person who has subscribed to the mutual aid for small and micro enterprises in the status of the representative of a corporation resigns from the status of representative due to a disease or an injury; |
| 4. | Where a subscriber to the mutual aid for small and micro enterprises who is at least full 60 years old and paid mutual aid deposits for small and micro enterprises for at least 120 months requests that he/she pay the mutual aid money for small and micro enterprises. |
| (2) | The KBIZ shall pay the mutual aid money for small and micro enterprises to the subscribers to the mutual aid for small and micro enterprises as prescribed by the Essential Principles of Mutual Aid Operation, taking into account the causes for granting mutual aid in the subparagraphs of paragraph (1), and the number of months in which mutual aid deposits for small and micro enterprises are paid: Provided, That, where the cause for granting mutual aid in paragraph (1) 2 occurs, it shall pay the mutual aid money for small and micro enterprises to the heir/heiress of such subscriber, as prescribed by the Essential Principles of Mutual Aid Operation. |
| Article 38 (Provision of Loans to Subscribers to Mutual Aid for Small and Micro Enterprises) |
| (1) | A loan prescribed in subparagraph 2 of Article 118 of the Act shall not exceed the total amount of mutual aid deposits for small and micro enterprises paid by the relevant subscriber to the mutual aid for small and micro enterprises. |
| (2) | Matters necessary for conditions of providing loans, such as the interest rates, periods of redemption, overdue interests, etc. of loans prescribed in paragraph (1) shall be prescribed by the Essential Principles of Mutual Aid Operation. |
| Article 39 (Accumulation of Reserves) |
In order to appropriate funds for the mutual aid for small and micro enterprises money, the KBIZ shall accumulate reserves prescribed in Article 120 of the Act each period of settlement of accounts in the following order: | 1. | Reserves to be appropriated for the payment of mutual aid money for small and micro enterprises where causes for granting mutual aid in the subparagraphs of Article 37 (1) arise; |
| 2. | Reserves to be appropriated for the payment of mutual aid money for small and micro enterprises where economic volatility, etc., causes changes in risk. |
| Article 40 (Operation of Reserves) |
When operating reserves accumulated pursuant to Article 39, the KBIZ shall endeavor to ensure stability, liquidity and profitability.
| Article 41 (Essential Principles of Mutual Aid Operation) |
| (1) | The KBIZ shall prescribe detailed matters necessary for methods and procedures of operation, and mutual aid contracts of the mutual aid for small and micro enterprises as Essential Principles of Mutual Aid Operation by undergoing deliberations and resolutions by the Mutual Aid Management Committee. <Amended by Presidential Decree No. 20998, Sep. 10, 2008> |
| (2) | When determining or amending the Essential Principles of Mutual Aid Operation, the KBIZ shall report to the Minister of SMEs and Startups in advance. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| Article 41-2 (Requirements for Designating Inactive Cooperatives) |
| (1) | "Requirements prescribed by Presidential Decree" in Article 132 (1) of the Act means any of the following cases: |
| 1. | In the case of a failure to conduct the proper purpose business prescribed in Article 35, 82, 93 or 106 of the Act for at least one year; |
| 2. | In the case of a failure to hold a general meeting prescribed in Article 43 (including cases where Article 43 applies mutatis mutandis in Article 85, 96 or 125 of the Act) of the Act for at least two consecutive years; |
| 3. | Where the number of cooperative members or the number of members remains falling short of a majority of minimum number of promoters at the time of establishment for at least one year. |
| (2) | If necessary to verify whether or not the KBIZ, federations, cooperatives or industrial cooperatives satisfy the requirements prescribed in the subparagraphs of paragraph (1), the competent administrative agency may conduct fact-finding surveys in accordance with the standards prescribed by the Minister of SMEs and Startups. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
[This Article Newly Inserted by Presidential Decree No. 26467, Aug. 3, 2015]
| Article 42 (Entrustment, etc. of Authority) |
| (1) | The Minister of SMEs and Startups shall entrust the following authority over the national cooperatives and business type federations in attached Table 1 to the competent ministers administering such business types pursuant to Article 136 of the Act: <Amended by Presidential Decree No. 21772, Oct. 7, 2009; Presidential Decree No. 22372, Sep. 9, 2010; Presidential Decree No. 24354, Feb. 13, 2013; Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | Supervision prescribed in Article 12 (1) of the Act |
| 2. | Deleted; <by Presidential Decree No. 21772, Oct. 7, 2009> |
| 3. | Approval for profit-making business prescribed in Articles 35 (1) 12 and 93 (1) 13 of the Act; |
| 4. | Approval for making contributions to other corporations prescribed in Article 35 (2) (including cases where Article 35 (2) applies mutatis mutandis in Article 94 of the Act) of the Act; |
| 5. | Authorization for the amendment of the articles of incorporation prescribed in Article 47 (2) (including cases where Article 47 (2) applies mutatis mutandis in Article 96 of the Act) of the Act; |
| 5-2. | Investigation, notification, publication in the Official Gazette, and orders for dissolution of inactive cooperatives prescribed in Article 132 of the Act; |
| 6. | Matters concerning orders for correction and for taking other necessary measures prescribed in Article 133 of the Act. |
| (2) | Competent administrative agencies shall entrust the following authority over regional cooperatives, industrial cooperatives, national cooperatives and federations to the Chairperson of the KBIZ pursuant to Article 136 of the Act: |
| 1. | Acceptance of documents related to the settlement of accounts prescribed in Article 129 of the Act; |
| 2. | Acceptance of reports prescribed in Article 130 (1) and (2) of the Act; |
| 3. | Approval for the enactment, amendment and repeal of bylaws prescribed in Article 130 (3) of the Act; |
| 4. | Inspection of duties and accounting prescribed in Article 131 of the Act. |
| (3) | When granting authorization for the establishment of, cancelling authorization for the establishment of or issuing orders for the dissolution of cooperatives, industrial cooperatives and federations, the City Mayor/Do Governor or the competent minister administering business types shall notify the Minister of SMEs and Startups of such fact within two weeks after the granting. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| Article 42-2 (Processing of Individually Identifiable Information) |
| (1) | If unavoidable to handle the administrative affairs concerning supervision prescribed in Article 12 (1) of the Act, the head of the competent administrative agency (including those to whom the authority in the following categories are delegated or entrusted) may process materials including resident registration numbers and foreigner registration numbers prescribed in subparagraph 1 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | Where the head of a competent administrative agency is the Minister of SMEs and Startups: Persons entrusted with the authority of the Minister of SMEs and Startups pursuant to Article 42; |
| 2. | Where the head of a competent administrative agency is a City Mayor/Do Governor: Persons to whom the authority of the City Mayor/Do Governor is delegated or entrusted. |
| 3. | Administrative affairs concerning the management and operation of mutual aid business for small and micro enterprises prescribed in Article 115 of the Act. |
| (3) | If unavoidable to handle the following administrative affairs, the executive directors of cooperatives, executive directors of industrial cooperatives or chairpersons of federations may process materials, including resident registration numbers and foreigner registration numbers prescribed in subparagraph 1 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act: |
[This Article Wholly Amended by Presidential Decree No. 26091, Feb. 10, 2015]
| Article 42-3 (Re-Examination of Regulations) |
The Minister of SMEs and Startups shall examine the appropriateness of the following matters every three years, counting from each base date specified in the following (referring to the period that ends on the day before the base date of every third year) and shall take measures, such as making improvements: <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
| 1. | The scope of the number of persons other than small and medium entrepreneurs eligible to become cooperative members and the ratio of such persons to the total number of cooperative members of the relevant cooperative, which are prescribed in Article 4 of the Act: January 1, 2017; |
| 2. | Persons ineligible to subscribe to the mutual aid for small and micro enterprises prescribed in Article 35: January 1, 2017. |
[This Article Wholly Amended by Presidential Decree No. 27751, Dec. 30, 2016]
| Article 43 (Standards for Imposing Administrative Fines) |
[This Article Newly Inserted by Presidential Decree No. 22372, Sep. 9, 2010]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures concerning Application of Standards for Classifying Business Types)
The cooperatives, industrial cooperatives or business type federations the establishment of which was authorized along with some of the business types in the sub-sub group of the Korean Standard Industrial Classification as at July 1, 2002 shall be deemed to comply with the classification standards prescribed in Article 3 of this Decree.
Article 3 Omitted.
ADDENDA <Presidential Decree No. 20331, Oct. 23, 2007>
Article 1 (Enforcement Date)
This Decree shall enter into force on October 28, 2007. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 20728, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 20998, Sep. 10, 2008>
This Decree shall enter into force on September 14, 2008.
ADDENDA <Presidential Decree No. 21772, Oct. 7, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures)
The supervision, authorization for establishment, approval and orders conducted, granted or issued by the competent ministers to national cooperatives and business type federations other than the national cooperatives and business type federations prescribed in the attached Table pursuant to the former provisions shall be considered to have been conducted, granted or issued by the Administrator of the Small and Medium Business Administration.
ADDENDA <Presidential Decree No. 21834, Nov. 20, 2009>
Article 1 (Enforcement Decree)
This Decree shall enter into force on November 22, 2009.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 21835, Nov. 20, 2009>
Article 1 (Enforcement Decree)
This Decree shall enter into force on November 22, 2009.
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 22156, May 4, 2010>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 22372, Sep. 9, 2010>
This Decree shall enter into force on September 9, 2010.
ADDENDUM <Presidential Decree No. 22653, Jan. 28, 2011>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 24317, Jan. 16, 2013>
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDUM <Presidential Decree No. 24354, Feb. 13, 2013>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 24432, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013>
This Decree shall enter into force on January 1, 2014. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 25840, Dec. 9, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2015.
Articles 2 through 16 Omitted.
ADDENDUM <Presidential Decree No. 26091, Feb. 10, 2015>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 26467, Aug. 3, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on August 4, 2015.
Article 2 (Transitional Measures concerning Requirements for Designating Inactive Cooperatives)
The periods prescribed in the amended provisions of Article 41-2 (1) 2 and 3 shall be calculated from the enforcement date of this Decree.
ADDENDA <Presidential Decree No. 27751, Dec. 30, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2017. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Presidential Decree No. 28213, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.