Jin & Kim, PLC | Legal Blog

Short AnswerA foreign company can close its Korean subsidiary, but simply stopping business operations does not terminate the Korean legal entity.For a typical Korean stock company (주식회사), a voluntary closure generally involves:A formal shareholder resolution for dissolutionAppointment or confirmation of a liquidatorCorporate registry filingsNotice to and settlement with creditorsCollection and ..

Short AnswerAs a general rule, a Korean company is a separate legal entity, and its directors are not personally responsible for the company’s debts or business losses merely because they serve as directors.Personal liability may arise, however, where a director breaches statutory or fiduciary duties, violates the company’s articles of incorporation, engages in wrongful conduct, or personally gu..

Short AnswerA Korean subsidiary is a separate Korean legal entity, even if it is wholly owned by a foreign parent company. Korean courts have also recognized that 100% ownership alone does not eliminate a subsidiary’s separate legal personality.A foreign parent can exercise substantial shareholder and governance control, but the Korean subsidiary’s directors and representative director must cont..

Short AnswerBefore appointing a distributor or sales agent in Korea, a foreign company should clearly define the commercial relationship, authority of the Korean partner, exclusivity, regulatory responsibilities, intellectual property rights, and termination rights.A Korean distributor that purchases and resells products in its own name is legally and commercially different from a sales or comme..

Short AnswerA shareholder deadlock can arise when shareholders cannot obtain the votes or approvals necessary for important corporate decisions. This is particularly common in 50:50 joint ventures, although equal ownership does not automatically mean that a legal deadlock exists.Under Korean corporate law, one shareholder does not generally have a statutory right to force the other shareholder t..

Short AnswerMinority shareholders in a Korean company are not necessarily powerless simply because another shareholder controls the majority of the voting rights.Under the Korean Commercial Act, minority shareholders may, depending on their shareholding percentage and the circumstances, have rights to:Inspect certain accounting books and documentsRequest an extraordinary shareholders’ meetingMak..

Short AnswerBefore acquiring a Korean company, a foreign buyer should conduct legal due diligence tailored to the target company and the proposed transaction.A Korean legal due diligence review commonly covers:Corporate structure and share ownershipMaterial contractsAssets, debt, guarantees, and security interestsEmployment and labor mattersIntellectual propertyLicenses and regulatory compliance..

Short AnswerCompanies should preserve potentially relevant documents and electronic data, but they should also understand which authority is conducting the investigation and what legal procedure is being used.Different authorities have different powers regarding document requests, on-site inspections, electronic evidence, and criminal search and seizure. Companies should avoid destroying documen..

Short AnswerIt depends.Whether Korean authorities may enter your office without a warrant depends on who is conducting the investigation and what legal procedure is being used.In general, criminal search and seizure by prosecutors or police requires a court-issued warrant. By contrast, many administrative inspections by regulatory authorities may allow on-site entry and document review without a..

Short AnswerYes, potentially. However, whether attendance is mandatory, whether you may have legal counsel present, and what happens if you decline depend largely on which authority is conducting the investigation and which legal procedure applies.A request from the Korea Fair Trade Commission (KFTC) or another regulatory authority is different from questioning by Korean prosecutors or police in..