SOUTH KOREA Law and Practice Contributed by: Heejun Choi, Kyoung-Ho Kim, Sungsok Yang, Eunjee Kim and Kwang-Chun Park, Dentons Lee
Following payment of capital, the company files for incorporation registration with the competent court registry. Legal personality arises upon registration, typically within two to three business days. The company must then obtain business registration from the tax office, generally within a further five busi - ness days. Where applicable, post-closing registration as a foreign-invested company must also be com - pleted. The usual sequence is: • foreign investment report (where applicable); • capital remittance and incorporation documenta - tion; • corporate approvals and officer appointments; • incorporation registration; and • business registration and foreign-invested com - pany registration. Absent regulatory approvals, in-kind contributions or document execution delays, incorporation can often be completed within one to two weeks, although addi - tional time may be required for regulated businesses or when foreign documents must be notarised, apos - tilled or translated. 3.3 Ongoing Reporting and Disclosure Obligations Although private companies in Korea are subject to fewer disclosure obligations than listed companies, they remain subject to ongoing corporate, accounting and registration requirements. The principal obligations arise under the commercial registry system. Certain corporate changes must be registered and become publicly accessible, including: • appointment, resignation or removal of directors, auditors and representative directors; • changes to the company name, head office, busi - ness purpose or other registered particulars; and • amendments affecting matters recorded in the commercial register. These changes must generally be registered within two weeks.
Private companies must also prepare annual financial statements and obtain approval in accordance with the applicable corporate procedures. For a chusik hoesa , approval is generally obtained at the annual shareholders’ meeting, although board approval is permitted in limited circumstances. Companies must also maintain accounting books and records. Certain companies meeting statutory thresholds are subject to external audit requirements, including: • the appointment of an external auditor; • the submission of audited financial statements; and • compliance with enhanced accounting and internal control requirements. Korea does not maintain a general public register of beneficial ownership for private companies. Beneficial ownership information nevertheless remains relevant for anti-money laundering and KYC compliance, regu - lated industries and certain sector-specific reporting obligations. Accordingly, although private companies are not sub - ject to the continuous market disclosure obligations applicable to listed companies, they remain subject to significant registry, reporting and financial compliance requirements. 3.4 Management Structures The governance structure of a Korean company depends on its corporate form. In practice, the prin - cipal forms are chusik hoesa , yuhan hoesa and yuhan chaegim hoesa . Chusik Hoesa The chusik hoesa has the most formal governance structure, comprising: • the shareholders’ meeting; • the board of directors; • one or more representative directors; and • a statutory auditor or audit committee, where required. The board makes major management decisions and supervises directors, while the representative director manages the company’s day-to-day affairs and rep -
966 CHAMBERS.COM
Powered by FlippingBook