SOUTH KOREA Law and Practice Contributed by: Hyeon-Deog Cho, Yeong-Ik Jeon, Ji-won Lim and Hakbum Ahn, Kim & Chang
2.6 Quorum, Voting Requirements and Proposal of Resolutions Under the KCC, only the concept of a quorum required for a resolution exists; a quorum for a general meeting of the shareholders is not recognised. An ordinary resolution at a general meeting of the shareholders requires the affirmative vote of “a major- ity of the voting shares present at the meeting”, rep- resenting “at least one-quarter of the total number of issued and outstanding shares”. In practice, the requirement for the affirmative vote of “at least one-quarter of the total number of issued and outstanding shares” tends to serve as a de facto quorum. However, such requirement may be waived solely in the case of the resolution on the appointment of auditors or audit committee members, if electronic voting is permitted. In such case, only the affirmative vote of a majority of the voting shares present at the meeting is required. 2.7 Types of Resolutions and Thresholds Resolutions adopted at a general meeting of the shareholders include ordinary resolutions, special resolutions and extraordinary special resolutions. • Ordinary resolutions are passed by the affirmative vote of “a majority of the voting shares present at the meeting” representing “at least one-quarter of the total number of issued and outstanding shares”. • Special resolutions require the affirmative vote of “at least two-thirds of the voting shares present at the meeting” representing “at least one-third of the total number of issued and outstanding shares”. • Extraordinary special resolutions need the consent of all shareholders. Statutory requirements under the KCC are the base- line threshold. Companies may adopt, through their AOI, more rigorous voting standards than the statutory requirements under the KCC, but they cannot adopt voting standards that are lower than the baseline threshold.
2.8 Shareholder Approval Agenda items requiring approval by an ordinary res- olution at the general meeting of the shareholders include: • the appointment of directors and auditors; • the determination of remuneration for directors and auditors; • the approval of yearly financial statements as of the end of each fiscal year; • the distribution of dividends; • the reduction of capital to compensate for deficit; and • the reduction of legal reserves. Agenda items requiring approval by a special reso- lution at the general meeting of the shareholders include: • any amendment(s) to the AOI; • the transfer of all or a material part of the business; • the removal of directors or auditors; • the reduction of capital (except for the purpose of compensating for deficit); • any merger, split-off, split merger, comprehensive share exchange or comprehensive share transfer; and • the grant of stock options. Extraordinary special resolutions requiring the con- sent of all shareholders include resolutions to exempt a director from liability to the company and resolutions on organisational change to convert a joint stock com- A shareholder may cast their vote in person at a gen- eral meeting of the shareholders or designate a proxy to exercise their vote at such meeting. Shareholders may also cast their vote themselves (without using a proxy) without attending the share- holder meeting in person, by way of electronic voting if the company has adopted an electronic voting sys- tem by board resolution, or in writing if the AOI allows the casting of votes in writing, in each case, without duplication with any other method of voting. pany to a limited company. 2.9 Voting Requirements
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