SOUTH KOREA Law and Practice Contributed by: Hyeon-Deog Cho, Yeong-Ik Jeon, Ji-won Lim and Hakbum Ahn, Kim & Chang
based on the consolidated financial statements as of the previous fiscal year end (and starting from 2026, all KOSPI-listed companies) must disclose their cor- porate governance reports by 31 May each year, and financial companies must disclose their annual gov- ernance reports on their websites, 20 days prior to the date of the ordinary general meeting of shareholders.
• entering into, altering or rescinding a contract for leasing the whole business, for giving authority to manage such business, or for sharing with another person all profits and losses of the company, or other similar contracts; • assuming all or a material portion of the business of another company, which significantly affects the company’s business; • a comprehensive share swap or transfer; • a merger; • a spin-off merger; • a vertical spin-off of a listed company; or • a horizontal spin-off of a listed company in which the shares issued by the company newly incorpo- rated as a result of the spin-off are not listed on the securities market. Court Actions/Demand Right A shareholder holding at least one share has the right to bring an action in court and/or to demand the com- pany to take or not take certain actions, including the right to: • petition the court for revocation or nullification of a resolution passed at a general meeting of share- holders; • petition the court to nullify the issuance of new shares; • demand the company to suspend the issuance of new shares; • petition the court to nullify the incorporation of the company; • petition the court to nullify a merger, a consolida- tion, a corporate split, a split merger or any reduc- tion in paid-in capital; • demand the company to suspend any unfair issu- ance of convertible bonds or bonds with warrants; and • petition the court for retrial of the confirmed final decision, in the event that a derivative suit is brought and the plaintiff and defendant colluded to have a decision rendered for the purpose of injur- ing the company’s rights. Furthermore, holders of at least 1% of the total issued and outstanding shares have the following rights:
8. Controlling Company 8.1 Duties of a Controlling Company
In principle, a controlling company does not have any duties or liabilities to the shareholders of a company it controls. However, under specific circumstances, a controlling company may be held jointly and sever- ally liable with directors of the controlled company for damages to the shareholders of the controlled com- pany, if such controlling company participates in ille- gal actions of the controlled company through actions such as using its influence to instruct directors of the controlled company to perform specific acts. 9. Insolvency 9.1 Rights of Shareholders If the Company Is Insolvent If there are concerns that the company may be insol- vent (ie, unable to pay its debts without significant difficulty), holders of at least 10% of the company’s total issued and outstanding shares have the right to petition the court for rehabilitation of the company, pursuant to the Debtor Rehabilitation and Bankruptcy Act.
10. Shareholders’ Remedies 10.1 Remedies Against the Company Appraisal Right
A shareholder holding at least one share has the right to request the company to purchase its shares if such holder dissents from any of the following resolutions: • a transfer of all or a material portion of the busi- ness of the company;
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