ENFORCEMENT DECREE OF THE CONSUMER COOPERATIVES ACT
Wholly Amended by Presidential Decree No. 22389, Sep. 17, 2010
Amended by Presidential Decree No. 22744, Mar. 29, 2011
Presidential Decree No. 25050, Dec. 30, 2013
Presidential Decree No. 25532, Aug. 6, 2014
Presidential Decree No. 25840, Dec. 9, 2014
Presidential Decree No. 27531, Sep. 29, 2016
Presidential Decree No. 29421, Dec. 24, 2018
The purpose of this Decree is to provide for the matters delegated by the Consumer Cooperatives Act and matters necessary for the enforcement thereof.
| Article 2 (Business Territory) |
| 1. | A cooperative centered on a region: The jurisdictional area of the Special Metropolitan City or a Metropolitan City, Do, or Special Self-Governing Province: Provided, That if actual administrative boundaries of its inhabitants extend over the jurisdictional areas of at least two local governments, such as the Special Metropolitan City, Metropolitan Cities, Dos, or Special Self-Governing Provinces, the whole area within such administrative boundaries may be designated as its business territory; |
| 2. | A cooperative centered on a place of work: The same place of work. In such cases, branch offices and subbranch offices of the place of work shall be deemed the same place of work; |
| 4. | A cooperative centered on an organization established for particular activities, such as a social organization or religious organization: The area covered by the organization. |
| Article 3 (Free Use of State-Owned Property) |
| (1) | The terms and conditions for free use of state-owned property under Article 9 (3) of the Act shall be stipulated in an agreement between the authorities responsible for managing the relevant state-owned property and a cooperative, a federation, or the national federation (hereinafter referred to as "cooperative or federation"). |
| (2) | In any of the following cases, the authorities responsible for managing state-owned property may terminate an agreement concluded pursuant to paragraph (1): |
| 1. | Where a cooperative or federation uses the state-owned property free of charge pursuant to Article 9 (3) of the Act for any purpose other than for original purposes; |
| 2. | Where it is deemed that a cooperative or federation no longer needs to use the state-owned property free of charge for promoting the welfare of consumers. |
| (3) | Except as provided for in the Act or this Decree, free use of state-owned property shall be governed by the State Property Act. |
| Article 4 (Standards for Authorization to Establish Cooperatives) |
| (1) | Standards for authorization to establish a cooperative under Article 21 (1) of the Act are as follows: <Amended by Presidential Decree No. 27531, Sep. 29, 2016> |
| 1. | At least 300 persons qualified for membership in the cooperative and consenting to the establishment of the cooperative under Article 21 (2) of the Act (hereinafter referred to as "persons consenting to establishment"); |
| 2. | At least 30 million won in total equity investment by the persons qualified for membership in the cooperative and consenting to establishment. |
| (2) | Notwithstanding paragraph (1), the following standards shall apply to authorization for establishing a cooperative engaging in health and medical services (hereinafter referred to as “health and medical cooperative”) for the purpose of improving the health of its members pursuant to Article 45 (1) 4: <Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016> |
| 1. | At least 500 persons qualified for membership in the cooperative and consenting to establishment; |
| 2. | At least 100 million won in total equity investment by the persons qualified for membership in the cooperative and consenting to establishment; |
| 3. | At least 50,000 won in per-capita equity investment by the persons qualified for membership in the cooperative and consenting to establishment. |
| Article 5 (Procedures for Establishment of Cooperatives) |
| (1) | In order to establish a cooperative pursuant to Article 21 (1) of the Act, promoters shall prepare articles of incorporation and a draft business plan and shall hold an inaugural general meeting after giving public announcement of the following matters at least 15 days prior thereto: |
| 1. | Date, time and venue for the inaugural general meeting; |
| 2. | Requirements for membership; |
| 3. | Matters subject to resolution at the inaugural general meeting. |
| (2) | The following matters shall require resolution at the inaugural general meeting: |
| 1. | Articles of incorporation; |
| 3. | Appointment of directors and auditors; |
| 4. | Matters necessary for establishment, including associated expenses. |
| Article 6 (Applications for Authorization to Establish Cooperatives) |
| (1) | In order to obtain authorization to establish a cooperative pursuant to Article 21 (1) of the Act, promoters shall file a written application therefor, as prescribed by Ordinance of the Prime Minister, with the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Do Governor, or the Governor of a Special Self-Governing Province (hereinafter referred to as a "Mayor/Do Governor"). |
| (2) | A written application for authorization for establishment under paragraph (1) shall be accompanied by the following documents: |
| 1. | A copy of the relevant articles of incorporation; |
| 2. | A copy of the minutes of the inaugural general meeting; |
| 4. | A list of executive officers; |
| 5. | A list of persons consenting to establishment; |
| 6. | A certificate of payment of equity investment; |
| 7. | Minutes of the general meeting at which a resolution in favor of a merger or division was adopted (this document is required only where a cooperative is established as a consequence of a merger or division under Article 52 of the Act and shall state the resolution on the scope of rights and obligations to which the newly established cooperative shall succeed); |
| 8. | Other documents specified by Ordinance of the Prime Minister. |
| Article 7 (Authorization to Establish Cooperatives) |
| (1) | Upon receipt of an application for authorization for establishment under Article 6 (1), a Mayor/Do Governor shall notify the results to the applicant within 20 days. If a Mayor/Do Governor decides not to authorize the establishment, he/she shall clearly state the grounds therefor. |
| (2) | Notwithstanding the former part of paragraph (1), a Mayor/Do Governor shall notify an applicant for authorization for establishment of a health and medical cooperative whether or not to authorize the establishment thereof, not later than 60 days after receiving an application therefor pursuant to Article 6 (1): Provided, That where it is impractical to process the application within the specified period for any unavoidable reasons, he/she may extend the period only once by up to 60 days. <Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016> |
| (3) | A Mayor/Do Governor shall authorize the establishment of a cooperative, if its application meets the standards for establishment and the procedure for its establishment, its articles of incorporation, and the details of its business plan do not contravene statutes or regulations. <Amended by Presidential Decree No. 27531, Sep. 29, 2016> |
| (4) | When authorization for establishment is granted, promoters shall transfer administrative affairs to directors without delay. <Amended by Presidential Decree No. 27531, Sep. 29, 2016> |
| Article 8 (Registration for Establishment) |
| (1) | A cooperative shall file for registration of its establishment with the registry at the seat of its principal place of business pursuant to Article 22 (1) of the Act. |
| (2) | For the purpose of filing for registration of establishment of a cooperative pursuant to paragraph (1), the president of the cooperative shall act as the applicant. |
| (3) | An application to be filed for registration of establishment under paragraph (2) shall describe the following matters: |
| 2. | The total number of equity shares and the total amount of equity investment paid; |
| 3. | Date of authorization for establishment; |
| 4. | Names, resident registration numbers, and addresses of executive officers. |
| (4) | An application to be filed for registration of establishment under paragraph (3) shall be accompanied by the following documents: |
| 1. | A letter of authorization for establishment; |
| 2. | Minutes of the inaugural general meeting; |
| 3. | A copy of articles of incorporation; |
| 4. | Minutes of the general meeting at which a resolution in favor of a merger or division was adopted (this document is required only where a cooperative is established as a consequence of a merger or division under Article 52 of the Act and shall state the resolution on the scope of rights and obligations to which the newly established cooperative shall succeed). |
| Article 8-2 (Borrowing Limit for Health and Medical Cooperatives) |
“Limit set by Presidential Decree” in Article 26 (2) of the Act means twice the sum of both the total equity investment in and retained earnings of the relevant health and medical cooperative as of the end of the immediately preceding fiscal year: Provided, That with regard to the fiscal year in which authorization for establishment of the cooperative is granted, such limit shall be twice the total equity investment as of the time such authorization is granted. [This Article Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016]
| Article 9 (General Meetings of Representatives) |
| (2) | The full number of representatives referred to in Article 30 (2) of the Act shall be at least 100 persons, but the specific full number shall be stipulated by articles of incorporation. |
| (3) | The term of office of each representative under Article 30 (2) of the Act shall be stipulated by articles of incorporation, which shall be up to four years, and that of a representative elected at a by-election shall coincide with the remaining term of office of his/her predecessor. |
| (4) | Representatives shall be elected through an election by cooperative members, and the matters regarding the method of election shall be stipulated in articles of incorporation. |
| Article 9-2 (Scope of Relationship by Blood or Marriage) |
| (1) | “Directors related by blood or marriage prescribed by Presidential Decree” in Article 31 (4) 1 of the Act means directors in any of the following relationships: |
| 2. | Relative by blood within the sixth degree; |
| 3. | Relative by marriage within the fourth degree. |
| (2) | “Related, by blood or marriage, to ... as prescribed by Presidential Decree” in Article 31 (4) 2 of the Act means a relationship falling under any of the subparagraphs of paragraph (1). |
[This Article Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016]
| Article 10 (Types of Business Services) |
| Article 10-2 (Standards for Authorization for Establishment of Additional Medical Institutions by Health and Medical Cooperatives) |
| (1) | The standards for authorization to establish additional medical institutions pursuant to the proviso to Article 46-2 (1) of the Act (hereinafter referred to as “authorization for additional establishment”) are as follows: Provided, That where the medical-care departments of the medical institution established by the relevant health and medical cooperative are different from those of the medical institution to be additionally established, subparagraph 1 shall not apply: |
| 1. | The number of cooperative members shall increase by at least 500 for each additional medical institution; |
| 2. | The total equity investment shall increase by at least 100 million won for each additional medical institution. |
| (2) | The standards for determining the number of cooperative members and the total equity investment under the subparagraphs of paragraph (1) are as follows: |
| 1. | Where the health and medical cooperative is granted authorization for establishment of an additional medical institution for the first time: Each of the subparagraphs of paragraph (1) shall apply on the basis of the number of cooperative members and the total equity investment as at the time the establishment of the health and medical cooperative is authorized; |
| 2. | Where the health and medical cooperative has already been granted authorization for establishment of an additional medical institution: Each of the subparagraphs of paragraph (1) shall apply on the basis of the number of cooperative members and the total equity investment as at the time the authorization for additional establishment was granted. |
[This Article Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016]
| Article 10-3 (Procedures for Authorization for Establishment of Additional Medical Institutions by Health and Medical Cooperatives) |
| (1) | Where a health and medical cooperative seeks to obtain authorization for additional establishment pursuant to the proviso to Article 46-2 (1) of the Act, it shall submit an application for authorization to establish an additional medical institution (hereinafter referred to as “application for additional establishment authorization”), as prescribed by Ordinance of the Prime Minister, to a Mayor/Do Governor, along with the documents below: |
| 1. | A list of all its members as of the date of filing the application; |
| 2. | A list of those who have become members of the health and medical cooperative after the establishment thereof and a certificate of payment of equity investment (if the health and medical cooperative has been granted authorization for establishment of any additional medical institution, a list of the members who have joined after the authorization for additional establishment and a certificate of payment of equity investment); |
| 3. | A business plan and the minutes of the general meeting related to the authorization for additional establishment. |
| (2) | Upon receipt of an application for additional establishment authorization pursuant to paragraph (1), the Mayor/Do Governor shall notify the results to the applicant, not later than 60 days after receipt thereof. Where he/she decides not to grant such authorization, he/she shall specify the reasons therefor. |
| (3) | Notwithstanding the former part of paragraph (2), if it is impractical to process the application within the specified period for any unavoidable reasons, the Mayor/Do Governor may extend the period only once by up to 60 days. |
| (4) | Where an application meets the standards for authorization for additional establishment pursuant to Article 10-2 (1) and where the relevant procedures and business plan are not contrary to statutes or regulations, the Mayor/Do Governor shall grant the authorization. |
[This Article Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016]
| Article 11 (Minimum Amount of Legal Reserve) |
The minimum amount of the legal reserve under Article 49 (1) of the Act shall be three times the total equity investment. <Amended by Presidential Decree No. 27531, Sep. 29, 2016>
| Article 12 (Registration for Revision) |
| (1) | A cooperative shall file for registration for revision under the former part of Article 52 (4) of the Act within one month from the date when a resolution in favor of a merger or division is adopted at a general meeting. |
| (2) | For the purpose of filing for registration for revision under paragraph (1), the president of the surviving cooperative shall act as the applicant. |
| (3) | An application to be filed for registration for revision under paragraph (1) shall be accompanied by documents certifying such revision to registered information. |
| Article 13 (Registration for Dissolution) |
| (1) | For the purpose of filing for registration for dissolution under Article 54 (1) of the Act, the liquidator shall act as the applicant. |
| (2) | An application to be filed for registration for dissolution under paragraph (1) shall be accompanied by documents certifying the grounds therefor. |
| Article 14 (Standards for Authorization to Establish Federations) |
Standards for authorization to establish a federation under Article 60 (1) of the Act shall be as follows: <Amended by Presidential Decree No. 27531, Sep. 29, 2016> | 1. | At least five cooperatives shall be qualified for membership and consenting to establishment; |
| 2. | At least 50 million won in total equity investment by the cooperatives qualified for membership and consenting to establishment: Provided, That the amount shall be at least 100 million won, if the federation implements a mutual aid program. |
| Article 15 (Procedure for Establishment of Federation) |
| (1) | Articles 5 and 6 shall apply mutatis mutandis to the procedure for establishment of a federation and the application for authorization to establish a federation. In such cases, "Article 21 (1) of the Act" shall be construed as "Article 60 (1) of the Act," "cooperative" as "federation," "cooperative member" as "member cooperative," and "persons consenting to establishment" as "cooperatives consenting to establishment," respectively. |
| (2) | Article 7 shall apply mutatis mutandis to the authorization to establish a federation. In such cases, "Article 6 (1)" shall be construed as "Article 15 (1)" and "20 days" as "30 days." |
| Article 16 (Standards for Authorization to Establish National Federation) |
In order to obtain authorization to establish the national federation under Article 72 (1) of the Act, the total equity investment by the cooperatives qualified for membership and consenting to establishment shall be at least 200 million won: Provided, That the amount shall be at least 300 million won, if the national federation implements a mutual aid program. <Amended by Presidential Decree No. 27531, Sep. 29, 2016>
| Article 17 (Procedure for Establishment of National Federation) |
| (1) | Articles 5 and 6 shall apply mutatis mutandis to the procedure for establishment of the national federation and the application for authorization to establish the national federation. In such cases, "Article 21 (1) of the Act" shall be construed as "Article 72 (1) of the Act," "cooperative" as "national federation," "cooperative member" as "member cooperative," and "persons consenting to establishment" as "cooperatives consenting to establishment," respectively. |
| (2) | Article 7 shall apply mutatis mutandis to the authorization to establish the national federation. In such cases, "Article 6 (1)" shall be construed as "Article 17 (1)." |
| Article 17-2 (Entrustment of Work) |
A Mayor/Do Governor shall entrust the National Health Insurance Service provided for in Article 13 of the National Health Insurance Act with the confirmation of the matters described in each of the subparagraphs of Article 81 (3) of the Act to supervise health and medical cooperatives pursuant to paragraph (7) of the same Article (limited to the simple confirmation of relevant documents etc. to assist in the report or inspection pursuant to paragraph (3) of the same Article). [This Article Newly Inserted by Presidential Decree No. 27531, Sep. 29, 2016]
| Article 18 (Public Announcement of Revocation of Authorization) |
When a Mayor/Do Governor gives public announcement of the revocation of authorization to establish a cooperative pursuant to Article 82 (2) of the Act, he/she shall give the public announcement in a general daily newspaper registered for nationwide circulation pursuant to Article 9 (1) of the Act on the Promotion of Newspapers.
| Article 18-2 (Management of Personally Identifiable Information) |
| (1) | The Fair Trade Commission (including a person to whom the authority of the Fair Trade Commission is delegated or entrusted pursuant to the proviso to Article 81 (2) of the Act or paragraph (7) of the same Article) or a Mayor/Do Governor (including any person to whom the relevant authority is delegated or entrusted, in cases where such authority is delegated or entrusted) may manage data containing resident registration numbers or alien registration numbers pursuant to subparagraph 1 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, where it is inevitable for performing the following duties: |
[This Article Newly Inserted by Presidential Decree No. 25532, Aug. 6, 2014]
| Article 18-3 (Re-Examination of Regulation) |
| (1) | The Fair Trade Commission shall examine the appropriateness of the minimum amount of legal reserve under Article 11 every three years, counting from January 1, 2014 (referring to the period that ends on the day before January 1 of every third year) and shall take necessary measures, such as making improvements. <Amended by Presidential Decree No. 25840, Dec. 9, 2014> |
| (2) | The Fair Trade Commission shall examine the appropriateness of the following matters every two 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 second year) and shall take necessary measures, such as making improvements: <Newly Inserted by Presidential Decree No. 25840, Dec. 9, 2014> |
| 1. | Standards for authorization to establish cooperatives under Article 4: January 1, 2015; |
| 2. | and 3. Deleted; <by Presidential Decree No. 29421, Dec. 24> |
| 4. | Types of business services under Article 10: January 1, 2015. |
[This Article Newly Inserted by Presidential Decree No. 25050, Dec. 30, 2013]
| Article 19 (Guidelines for Imposition of Administrative Fines) |
[This Article Newly Inserted by Presidential Decree No. 22744, Mar. 29, 2011]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on September 23, 2010.
Article 2 (Relationship to Other Statutes or Regulations)
A citation of any of the provisions of the previous Enforcement Decree of the Consumer Cooperatives Act by any other statute in force as at the time this Act enters into force shall be deemed a citation of the corresponding provisions of this Decree in lieu of the previous provisions, if such corresponding provisions exist in this Decree.
ADDENDA <Presidential Decree No. 22744, Mar. 29, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures concerning Administrative Fines)
| (1) | Notwithstanding the amended provisions of the attached Table, offenses committed before this Decree enters into force shall be governed by the previous provisions for the purposes of the guidelines for the imposition of administrative fines to such offenses. |
| (2) | Administrative fines imposed for offenses committed before this Decree enters into force shall not be included in the calculation of the number of offenses committed under the amended provisions of the attached Table. |
ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013>
This Decree shall enter into force on January 1, 2014. (Proviso Omitted.)
ADDENDUM <Presidential Decree No. 25532, Aug. 6, 2014>
This Decree shall enter into force on August 7, 2014.
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.
ADDENDA <Presidential Decree No. 27531, Sep. 29, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 30, 2016.
Article 2 (Applicability concerning Processing Period for Authorization to Establish Health and Medical Cooperatives)
The amended provisions of Article 7 (2) shall begin to apply to an application filed to obtain authorization for establishing a health and medical cooperative after this Decree enters into force. Article 3 (Transitional Measures concerning Standards for Authorization to Establish Health and Medical Cooperatives)
| (1) | A cooperative the establishment of which was authorized pursuant to Article 21 of the Act before this Decree enters into force (limited to a cooperative providing the services mentioned in Article 45 (1) 4 of the Act; hereafter in this Article referred to as “cooperative”), but which fails to meet the standards for authorization to establish health and medical cooperatives pursuant to the amended provisions of Article 4 (2) 1 and 2 as at the time this Decree enters into force, shall meet the standards for establishment authorization pursuant to the amended provisions of Article 4 (2) 1 and 2 within three years from the date this Decree enters into force, notwithstanding the amended provisions of Article 4 (2) 1 and 2. |
| (2) | The amended provisions of Article 4 (2) 3 shall not apply to cooperative members who have been granted authorization for establishment pursuant to Article 21 of the Act and whose contributions has been fully paid to the cooperative before this Decree enters into force. |
Article 4 (Transitional Measures concerning Borrowing Limits)
A cooperative, the loan to which exceeds a borrowing limit under the amended provisions of Article 8-2 as at the time this Decree enters into force, shall meet the borrowing limit pursuant to the amended provisions of Article 8-2 within three years from the date this Decree enters into force.
ADDENDUM <Presidential Decree No. 29421, Dec. 24, 2018>
This Decree shall enter into force on January 1, 2019.