The Commercial Act of South Korea is the law that controls commerce in South Korea. It was originally enacted on 1 January 1963. It currently consists of 5 main chapters: General Provisions, Commercial Transactions, Company, Insurance, and Maritime Commerce.
Amendments (changes) were made in 1963, 1984, 1991, 1993, 1995, 1996, 1998, 1999, 2001, 2002, 2008 and 2009. The biggest changes were made to comply with rules made by the International Monetary Fund. These changes were made during South Korea's foreign currency crisis in 1998. They were to support corporate restructuring and improving accountability and transparency of management through efficient monitoring.
The concept of directors' duty of loyalty was introduced in the Commercial Act and was imposed as a statutory obligation of directors of stock companies. The Commercial Act also included the concept of de facto directors liable for damages under certain circumstances. The Commercial Act holds "owners", who do not hold any official corporate directorship, liable for mis-management and misconduct. Additionally, through the introduction of the shareholder proposal rights, the status of minority shareholders improved. They have opportunities to propose certain issues to the board of directors and the general shareholders' meeting.
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Wikisource has original writing related to this article:
- Hwa-Jin Kim (1999) "Living with the IMF: a New Approach to Corporate Governance and Regulation of Financial Institutions in Korea", 17 Berkeley Journal International Law.
- The Korean Commerce Code (상법/商法): § 382-3, 401-2, 363-2
