The amended Commercial Code of Korea provides for “squeeze-out” rights for shareholders holding 95% or more of the shares of a company. This Korean law was promulgated in April of 2012. The law also provides for a right of minority shareholders of Korean companies to demand a “sell-out.” It seems possible, under the very vague wording of the amended clauses, for a sell-out to take place at the same time as a squeeze-out with the potential of conflicting appraisals and procedures. For a squeeze-out, in Korea, the majority shareholder must establish that: The squeeze-out is “necessary” to accom ..read more

We are proud to note that 10 Magazine listed us in an article titled 10 Lawyers in Seoul for English-Speaking Expats in Korea. IPG is listed under the title Large/International Law Firms. Thanks for the mention 10 Magazine. We love your work. IPG Legal and many of our lawyers were listed as top attorneys by numerous legal rating services and magazines. Sean Hayes was, also, rated a top 100 Attorney. The article by 10 Magazine on the law firms in Korea notes: The lawyers of IPG focus on business law, civil litigation, franchise law, and criminal defense. With affiliated offices around the ..read more

Stock options, in Korea, are often provided to senior foreign and domestic employees of companies in Korea. For stock options, in non-listed/non-public companies in Korea, to be exercisable by employees in Korea (thus a valid option) the option must be approved, in most cases, at a general shareholders meeting of the Korean company. Another article that may be of interest can be found at: Granting & Exercising Stock Options in Korea.   The articles of incorporation of the Korean stock granting company should be amended or should note at formation, at a minimum, the following: A ..read more

The Financial Services Commission (the “FSC”) in February of 2023 announced a plan to overhaul the Security Token legal regime in Korea. Security tokens are digital representations of an asset traded and held on a blockchain. The announcement, seems to be in reaction to the Terra/Luna Meltdown and related meltdowns and belief that the the population needs more protections. We suspect to see the delisting of some Korean security tokens in Korea and a comprehensive and difficult process to listing. The main component of the law is the Definition of a “Security Token” and placing the regulation ..read more

The Korean Commercial Code (“KCC”) was amended to provide more protection for certain minority shareholders. The amended KCC came into effect at the end of 2020. We wrote many other articles on Minority Shareholder Rights including: Listen to My Mother (JV Basics). Major Changes to the Korean Commercial Code Related to Minority Shareholder Rights The major changes to the Korean Commercial Code related to the rights of minority shareholders including: All listed companies must have a separate election system of one “audit” committee member; Shareholder of a parent company can file representa ..read more

In Korea, a contracts are agreements that are legally binding and enforceable under the law. They can be created for a wide range of purposes, such as employment, real estate, intellectual property, and commercial transactions. A contract, in Korea, is an agreement between two or more parties to create, modify, or terminate obligations that are legally enforceable. To constitute a legally enforceable contract in Korea, there must be: Mutual consent: Both parties must agree to the terms and conditions of the contract. This can be achieved through an offer and acceptance (“Meeting of the Minds ..read more

Prior to the recent amendment to the Special Measures for the Promotion of Venture Businesses Act, Korea was an outlier in the developed world with regard to Dual-Class Shareholdings. Most developed economies allow Dual- Class Shares for IPOs and for unlisted countries. Korea prohibited Dual-Class Shareholding for both listed and unlisted companies. Korean Commercial Code Art. 369(1) The Korean Commercial Code mandates that a shareholder may, only, receive one vote for each share. This so called “One-Share One-Vote Principle” was confirmed by the Supreme Court of Korea when it ruled that any ..read more

The Serious Accident Punishment Act (“SAPA”) was passed by the Korean National Assembly and came into effect on January 27, 2022. With the implementation and recent expansion of the SAPA, we encourage all employers to do a comprehensive compliance audit. Some law firms, including this one, have attorneys and staff that can assist your team in doing a comprehensive audit. SAPA has greatly expanded the list of accidents that are applicable and significantly increased the penalties for breaking the law. The SAPA imposes criminal liability against business owners and responsible management officer ..read more

On May 11, 2023, the National Policy Committee of the Korean National Assembly passed a bill known as the “2023 Proposal” on the Act on the Protection of Virtual Asset Investors (“Act”). The 2023 Proposal, which focuses on enhancing the protection of virtual asset investors, shall be finalized in the plenary session of the Korean National Assembly. The 2023 Proposal introduces the following key points to enhance investor protection: It defines “Virtual Asset” as electronic certificates (including all rights thereto) that have economic value and can be traded or transferred electronically, ex ..read more

I just received a phone call from a prospective client with a wonderful product that has been offered a sweetheart deal.  Whenever I hear that someone has received a no risk or sweetheart deal in Korea, a red flag immediately goes up in my head and I immediately request the client to let me do a couple of weeks of due diligence. One of the many, ubiquitous, sweetheart deals is ownership of shares in company in exchange for some benefit from the foreign partner.  Too often, the Korean company is a shell.  The shell is broke with liabilities that far exceed assets.  The shel ..read more