SOUTH KOREA Law and Practice Contributed by: Hyeon-Deog Cho, Yeong-Ik Jeon, Ji-won Lim and Hakbum Ahn, Kim & Chang
2.13 Holding Through a Nominee If shares are purchased not directly but under the name of a nominee, and the nominee’s name is entered in the shareholders’ registry, only the nominee may exer- cise shareholder rights vis-à-vis the company. Except for special circumstances, the company may not deny the exercise of shareholder rights by a shareholder whose name appears in the shareholders’ registry, nor can it acknowledge the exercise of such rights by a person whose name does not appear therein. Therefore, even when a company convenes a general meeting of shareholders, the notice of convocation is sent to the nominee, and the nominee exercises the voting rights. 2.14 Written Resolutions A general meeting of shareholders must be held in a physical location, and resolutions are required to be adopted by shareholders (or agents) in person. However, pursuant to the 2025 KCC Amendment, beginning from 1 January 2027, listed companies will be allowed to hold virtual general meetings of share- holders concurrently with physical meetings, enabling shareholders to attend general meetings and partici- pate in resolutions via electronic means of communi- cation. Despite the 2025 KCC Amendment, adopting a written resolution without actually holding a general meeting of shareholders is not allowed. However, as an exception, a company with total paid- in capital of less than KRW1 billion may adopt a writ- ten resolution in lieu of the resolution of the general meeting of shareholders, and such company will be deemed to have adopted a written resolution if all shareholders have consented to the agenda of the resolution in writing. 3. Share Issues, Share Transfers and Disclosure of Shareholders’ Interests 3.1 Share Issues Unless otherwise provided in the KCC, a company may issue authorised but unissued shares at such times and upon such terms as the board of direc- tors of the company may determine. In such issuance, all shareholders who are listed on the shareholders’ register as of the record date (“allotment to share-
with the court for a preliminary injunction to access and copy the documents: (a) the shareholders’ registry (shareholders holding at least one share); (b) the minutes of the board meeting (shareholders holding at least one share); (c) the minutes of the general meeting of share- holders (shareholders holding at least one share); (d) the company’s accounting books (sharehold- ers holding 3% or more of the total issued and outstanding shares or, in the case of a listed company, shareholders who have held 0.1% or more of the total issued and outstanding shares, or 0.05% or more for a large listed company, for the previous six months); and (e) financial statements, business reports and audit reports (shareholders holding at least one share). • Right to request an inspector for the purpose of investigating business/property status: A share- holder holding 3% or more of the total issued and outstanding shares has the right to request the court to appoint an inspector in order to investigate the business and property status of the company, if such shareholder reasonably believes that there is any misconduct or material violation of laws or the AOI. Influence The company’s shareholders may seek to influence the company through non-legal and legal measures against the company or its directors. • Non-legal measures include requests for conversa- tions with the management or the board of direc- tors, distributions of shareholders’ letters, media campaigns, etc. • Legal measures – shareholders who hold a certain amount of shares may take measures including court actions/demand rights against the company and its directors. In addition, a shareholder hold- ing a certain amount of shares may file a derivative suit against the company’s directors on behalf of the company or a derivative suit against the direc- tors of a company’s subsidiary on behalf of such subsidiary. See 10. Shareholders’ Remedies for further details.
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