SOUTH KOREA Law and Practice Contributed by: Hyeon-Deog Cho, Yeong-Ik Jeon, Ji-won Lim and Hakbum Ahn Kim & Chang Contents 1. Types of Company, Share Classes and Shareholdings p.215 1.1 Types of Company p.215 1.2 Types of Company Used by Foreign Investors p.215 1.3 Types or Classes of Shares and General Shareholders’ Rights p.216 1.4 Variation of Shareholders’ Rights p.216 1.5 Minimum Share Capital Requirements p.216 1.6 Minimum Number of Shareholders p.217 1.7 Shareholders’ Agreements/Joint Venture Agreements p.217 1.8 Typical Provisions in Shareholders’ Agreements/Joint Venture Agreements p.217 2. Shareholders’ Meetings and Resolutions p.217 2.1 Types of Meeting, Notice and Calling a Meeting p.217 2.2 Notice of Shareholders’ Meetings p.218 2.3 Procedure and Criteria for Calling a General Meeting p.218 2.4 Information and Documents Relating to the Meeting p.218 2.5 Format of Meeting p.218 2.6 Quorum, Voting Requirements and Proposal of Resolutions p.219 2.7 Types of Resolutions and Thresholds p.219 2.8 Shareholder Approval p.219 2.9 Voting Requirements p.219 2.10 Shareholders’ Rights Relating to the Business of a Meeting p.220 2.11 Challenging a Resolution p.220 2.12 Institutional Shareholder Groups p.220 2.13 Holding Through a Nominee p.221 2.14 Written Resolutions p.221 3. Share Issues, Share Transfers and Disclosure of Shareholders’ Interests p.221 3.1 Share Issues p.221 3.2 Share Transfers p.222
China
North Korea
Seoul
South Korea
Japan
4. Cancellation and Buybacks of Shares p.223 4.1 Cancellation p.223 4.2 Buybacks p.223 5. Dividends p.224 5.1 Payments of Dividends p.224 6. Shareholders’ Rights as Regards Directors and Auditors p.224 6.1 Rights to Appoint and Remove Directors p.224 6.2 Challenging a Decision Taken by Directors p.225 6.3 Rights to Appoint and Remove Auditors p.225 7. Corporate Governance Arrangements p.225 7.1 Duty to Report p.225 8. Controlling Company p.226 8.1 Duties of a Controlling Company p.226 9. Insolvency p.226 9.1 Rights of Shareholders If the Company Is Insolvent p.226
10. Shareholders’ Remedies p.226 10.1 Remedies Against the Company p.226 10.2 Remedies Against the Directors p.227 10.3 Derivative Actions p.227 11. Shareholder Activism p.228 11.1 Legal and Regulatory Provisions p.228 11.2 Aims of Shareholder Activism p.228 11.3 Shareholder Activist Strategies p.229 11.4 Recent Trends p.229 11.5 Most Active Shareholder Groups p.230 11.6 Proportion of Activist Demands Met p.230 11.7 Company Prevention and Response to Activist Shareholders p.230
3.3 Security Over Shares p.222 3.4 Disclosure of Interests p.222
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