1, Preface Under Korean Commercial Code(hereinafter referred to as "Code"), stock companies are divided into four groups(namely, small stock company, medium unlisted stock company, medium listed stock company and big listed stock company). A stock company whose total sum of capital is under one billion Korean Won, is divided into the small stock company. A stock company whose total sum of capital is one billion or more and whose stocks are not listed in Korean Exchange, is divided into the medium unlisted stock company. A stock company whose total sum of capital is one billion or more and whose stocks are listed in Korean Exchange, is divided into the medium listed stock company. A stock company whose total sum of assets in the end of the latest business year is two thousand billion or more Korean Won and whose stocks are listed in Korean Exchange, is divided into the big listed stock company. 2. A Small Stock Company A small stock company may hav on or two directors as recutive organ (Code § 383 CD s. 2). In other words, a small stock company may not have the board of directors system. Each directoruhe representative director, if the Article of Incorporation provides it between two directors) in this company represents the company any and decide executive matter instead of the board of directors(Code § 383 (§:)). The shareholders`` meeting in this company supervises the administration of the affairs of the company by one or two directors as executive organ. A small stock company may not have any auditort (Code § 409 ④). The shareholders`` m ting in this company audits this adminlstration of the affairs of the company by on or two directors as x exective organ(Code § 409⑥). 3. A Medium Unlisted tock Company (I) A Medium Unlisted tock Company without Executive Officers System 1) A medium Unlisted rock company without executive officers system hall have the board of directors and the representative director as executive organ(Code §§ 393 CD, 389). The board of director in this company also supervises the adminisration of the affairs of the company by the (representative) directors(Code § 393②). In other words, the board of directors in this company holds two positions(executive function and supervi ion function and supervision function) concurrently 2) A medium Unlisted rock company without executive officers system may have the auditor(Code §§ 409-415) or the audit committee(Code §§ 409~415-2) as auditing organ. But I propose that this company should have only the auditor in order to increase tile function of auditing. (2) A Medium Unlisted tock Company with Executive Officers system 1) A medium unlisted stock company with executive officers system shall have the officers as executive organ(Code § 408-4). The board of directors in this company supervises the administration of the affairs of the company by the executive officers(Code § 408-2 ③). The function of supervision by the board of directors is very meaningful, because the executive organ(executive officers) is separated from supervisory board of directors in this company. 2) A medium unlisted stock company with executive officers system may have the audit committee(Code §§ 409~415) or the audit committee(Code § 415-2) as auditing organ. But I propose that this company should have only the audit commit in order to save the unnecessary procedure and money. Therefore, Korean Commercial Code Article 415-2 Paragraph 1 Sentence 1 should be r vised as following: "A stock company with executive officers system should have the audit committee instead of the auditor." 4. A Medium Listed Stock Company A medium Ii ted tock company is similar to a medium unlisted stock company. But a medium Ii ted tock company should have a quarter or more outside directors of total directors of the company(Code § 542-8 ①s.1). And the reasons for disqualification of outside directors are added(Code § 542-8②). 5. A Big Listed rock Company (1) A Big Li ted rock Company without Executive Officers System1) A big Ii ted stock company without executive officers system shall have the board of directors(executive board of directors) and the representative director a executive organ(Code §§ 393 CD, 389). But this company should have three persons or more and a majority outside directors of total directors(supervisory board of directors)(Code § 542-8 ①s. 2). 111e board of directors with a majority outside directors supervises the administration of the affairs of the company by the executive officers on the premise of the stock company with executive officers system. Therefore, it is dearly contradictory and make both functions of the administration and the supervision of the board of directors drop off at the same time that a big stock company without executive officers system(namely, a big stock company with the executive board of directors) should have a majority outside directors of total directors(supervisory board of directors)(Code § 542-8 ① s. 2). I propose that only the big listed stock company with executive officers system should have three persons or more and a majority outside directors of total directors(supervisory board of directors)(Code § 542-8 ①s.2). Therefore, Korean Commercial Code Article 542-8 Paragraph 1 Sentence 2 should be revised as my proposal. 2) A big listed stock company without executive officers system should have the audit committee as auditing organ(Code § 542-11 (1). r propose that this company should have only the auditor in order to increase the function of auditing, because the audit committee system is the system on the premise of the stock company with executive officers system. (2) A Big Listed Stock Company with Executive Officers system 1) A big listed stock company with executive officers system shall have the executive officers a executive organ(Code § 408-4). The board of directors with a majority outside directors of total director (Code § 542-8 (1) s.2) in this corn] any supervises the administration of the affairs of the company by the executive officers(Code § 408-2 ③) The function of supervision by the board of directors with a majority outside directors will take good effect, because the executive organ(executive officers) is separated from the supervisory board of directors and the supervisory board of directors is composed mostly of independent directors(outside directors). 2) A big listed stock company with executive officers system should have the audit committee as auditing organ(Code § 542-11 ①. It``s very desirable, I propose that the members of audit committee should be appointed and removed by not the shareholders`` meeting but the board of directors(Code § 383-2② Nr.3). For this purpose, Korean Commercial Code Article 542-11 and 542-12(except the regulation of the auditor) should be deleted.

There is a general consensus that modern corporate law originated from four sources, which are the corporate and commercial laws of the UK, the USA, Germany and France. All of them are the fruit of a capitalist economy, but further categorization can lead to a classification of two systems - the external governance structure of the Anglo-Saxons and the internal governance structure of the Continent. While the former promotes financing through an open stock market, the latter achieves financing mostly through investment banks. The former has been focused on the maximization of shareholder value based on economic liberalism, but the latter has been understood to be more interested in stakeholder value. However, in contemporary times, the two systems have been somewhat mixed, making it difficult to maintain an exclusively binary categorization system. In the era of the global economy in particular, understanding of another country``s legal system is essential in setting the right direction for corporate law in one``s own country. While Korea has a rich history of over 5000 years, the history of its corporate law is very short. Since the commercial laws of Japan were translated all of a sudden, the process of evolution has been skipped and there is no tradition in this field to speak of. A completed form of law had been transplanted from the beginning. Korean commercial law can be seen as having common roots with German commercial law. Corporate law in Korea, however, has more common roots with the corporate law of the Anglo-Saxon world. In recent years, Korean corporate law has increasingly become similar to American corporate law. Of the four major origins of corporate law, this researcher focused on surveying the history of British corporate law, general corporate law in the State of Delaware, and German law on corporate stocks, discussed the concept of corporate social responsibility and looked at where Korean corporate stands today amidst the evolution taking place in corporate laws around the world. The paper then concludes with presenting a future direction for Korean corporate law. The first purpose of corporate law is not regulation. Corporate law must ensure that no matter what the size, a firm can make the most of the corporate system to organize and operate its business. The purpose of corporate law is to promote efficient operations of the business and increased adjustability to change. This is a concept that is included in one of the basic ideas underlying Korean corporate law, which is the ``reinforcement of maintenance`` (e.g., formation of the basis on which a corporation can exist, a guarantee for the corporation to exist as a going concern, and prevention of the dissolution of the corporation). The goal of corporate law is to increase efficiency. Douglas North, a 1993 Nobel laureate, emphasized in 1992that "Institution does matter." Acemoglu, as well as Johnson & Robinson noted that "The reason there is a gap between rich countries and poor countries can be trace to the difference in economic policy and systems." Policies and systems are conceived by the law. According to the World Economic Forum``s Global Competitiveness Index, Korea was ranked 62nd in 2012, 74th in 2013 and 82nd in 2014 for its comprehensive score on policies on systems with a focus on trust in politicians, the independence of the justice department, regulatory pressures, efficiency of its legal system, transparency in decision-making, efficacy of corporate boards, and protection of minority shareholder rights. This ranking is among the lowest out of all 154 countries that were assessed, and among the OECD member countries, ranks Korea among the lowest 30% bracket. A variety of regulations are only worsening the situation. What is more worrisome is the unofficial ``system`` taking root, such as anti-corporate sentiments among the public. This researcher believes that academics in corporate law can play an important role in such a situation to improve both the official and unofficial systems concerning corporations in Korea.(End)

Since the beginning of the twenty one century, legislative races to reforming the company law have been speeded up in the international dimension. For example, the Sarbanes-Oxley Act was enacted in the U.S in 2002, individual European member country``s domestic Company Acts have been revised in all of the countries since 2006, and also Japanese Commercial Code had been revised since the middle of ``90s and its Company Act was firstly enacted in 2005 as an independent code from the conventional integrated Commercial Code. Such global reforming movements were carried out under the so-called "modernization of Company Act". In Korea, the commercial code was also being revised in accordance with the global trends since 1998 and was drastically reformed focusing on the company act in 2011. Such reforms of company act can be referred to as "globalization of contents", but are remote from the "globalization of Code" as an internationally general standard. It means that Korean Commercial Code has a new assignment to accept the international trends of "Globalization of the Code". In this paper, types of international legislature were classified according to the legal origins in relation to separation of company act from the Commercial or Civil Code, the reasons why the separation of company act is required were analysed in the comparative legal points and some plausible recommendations to be taken into consideration for the separation of company act in the future were suggested. In conclusion, positive co-operation among the concerned authorities having enforcing control over the general and special company acts is especially required for a success, "legislative separation of Company Act from the Commercial Code", because such a task is closely concerned with the establishment of national social and economic infrastructure.

The Section 13 of Korean Commercial Code prescribes special rules for listed companies. The article 542-2 of the Korean Commercial Code stipulates that the section 13 shall apply to listed companies which have issued certificates of stock listed in a securities market (referring to a market for purchase and sale of securities). This article deals with current issues of section 13 and legal measures to solve those problems. It discusses the issues of expanding the scope of recipients for stock options and substituting the process of obtaining expost facto approval of shareholders meeting for expost facto reporting to shareholders meeting. It also analyzes legal issues raised from strengthening or relaxing requirements for minority shareholders`` rights. This article deals with legal problems associated with introducing compulsory cumulative voting system of shareholders`` meeting in electing plural directors. It proposes to unify those articles regarding ratio of independent directors between the Commercial Code and the Capital Markets and Financial Investment Services Act and to eradicate the rules requiring mandatory election of independent directors for small and medium sized listed companies. It also suggests to amend irrational requirements of disqualification for independent directors and analyzes the prohibition of independent directors`` holding concurrent office of other companies. Finally, this article discusses qualification requirements, election method for supervisory committee members, and reviews effective mechanism to induce internal control system.

Short-termism refers to the investment approach in which investors "push managers to invest in short-term projects in order to keep earnings high. In this sense, investors who behave in a short-termistic manner may well have long holding periods, provided managers satisfy the investors`` need for high earnings period by period." Short-termism promotes a tendency to overvalue short-term rewards, invariably leading to an undervaluation of long term consequences. For that reason, long-term shareholding is an essential, but increasingly scarce, commodity in a society currently consumed with a short-term orientation and an attention span that is mainly amenable to quick fixes. The economy needs long-term shareholders to provide prudent and profitable patient capital, generate an antidote to corporate short-termism, and spearhead managerial accountability. Finding shareholders who are willing to commit to a company for considerable periods of time and employ a long horizon approach to their investment, however, is a difficult undertaking. It requires a structure that provides the right environment and incentives for such investment. But recently, Professor Emeka Duruigbo introduces a revised version of the trust fund theory to provide such a structure. Accordingly, this Article presents professor Duruigobo``s revised version of the trust fund theory and deals with the if the theory can be applied in Korea. Under this revived theory, the paid-in capital of some shareholders would constitute an expressly created trust fund for the benefit of creditors. Companies can create a separate class of common shares (Class T) to fund the trust. Holders of these securities will purchase the shares on the understanding that they will hold them for extended time periods, with ten-year restrictions on sale or transfer. A revised trust fund theory could offer a framework for effective shareholder monitoring of management through emphasis on voice instead of unlimited exit, proceeding on the understanding that voice is not likely to be amplified where exit is not substantially constrained. A core component of the revised theory is a trust fund that is financed by this class of shares that, in return for their relative illiquidity, enjoy special privileges in corporate governance, including voting on the corporation``s long-term strategy, nominating directors on the company``s proxy materials, and holding a number of seats on the board of directors. This paper investigated from various angles such as need for long-term shareholders and long-term capital in our country and how to attract them

Dual-class shares have long been debated in corporate law, but it seems that commentators have not yet reached a conclusion. It is sometimes argued that one-share-one-vote system is in most cases socially more desirable than the dual class system. The controlling shareholders with multiple-vote shares are likely to pursue private benefits inefficiently, especially when the corporate law is not good enough to deter them. Such observation, however, does not necessarily lead that mandatory one-share-one-vote rule is socially preferable. Dual-class shares are likely to have several value-enhancing effects by coordinating various interests in many contexts such as IPO, strategic alliance, and joint venture investment. Mandatory enforcement of one-share-one-vote rule just eliminates suchp ositive effects. Even if the dark sides of dual-class shares should be fully taken into account, the prohibition would not be an answer in most situations. This paper joins the dual-class share debates with theories and empirical studies on corporate ownership structure and family firms, and suggests more modest approach, in which law should regulates the details of dual class shares. In fact, dual class shares, as an option given to founders, might be socially desirable even in emerging markets where corporate law is not that good enough to effectively protect investors. The point is that the corporate law which could hardly prevent controlling shareholders from pursuing private benefit is also likely to fail as well to restrict agency costs associated with professional management. Legislators could not know which agency cost is larger. In those situations, therefore, dual-class shares might be an optimal solution. At the same time, however, this paper emphasizes that the details of this multiple voting rights should be regulated by corporate law. While current conventional theory employs simple dual-class v. one-share-one-vote dichotomy, this paper argues that more attention should be paid to the detailed provisions of dual-class shares. One of the most important features to be considered is that the multiple voting rights should be granted only to the founders of company (or equivalent members), and should not be transferred to others nor inherited by the next generations. In fact, dual class shares in the United States, Canada, and Japan often contain those provisions. Market-oriented scholars are likely to argue that such features can be achieved contractually with investors and thereby priced by stock market, but a handful of empirical studies demonstrate that the market could not be so efficient as to evaluate such details. This paper therefore proposes rather a safer approach where corporate law or listing rules should play a role to alert investors to pay attention to the specific provisions of multiple-vote shares.

This paper deals with limitations and Improvement about application of the Companies Act in Small and Medium Enterprises(SMEs). Small Medium Enterprises(SMEs) contribute significantly to our economy in terms of enterprise scale or its employees compared to large enterprises. In the contribution of national economic development, I think that SMEs have a important value and meaning as well as large companies. But SMEs are in a very poor position in capital and the scale of enterprise. People call a current system ``knowledge society`` or ``information society``. In this society a small piece of firm size can be required in the prompt activities of the enterprises. The difficulties of the economy have been accelerating. The idea to overcome the current economic difficulties have been raised by the SMEs. Korean Commercial Code was so widely amended in the area of limited liabilities companies in 2011. In this paper, we describe the review of the revision and some unimproved parties for the amendments. Limited Company in Korean Commercial Code which are a limited liability company is not used in our country. A limited Company is a favorable form to the original small-scale enterprises and is also a much more autonomous than the Corporation to run the company. Nevertheless, a limited Company is not well being used in our country today. Efforts to amend Korean Commercial Code should be made on and on in our country, so that operators can take advantage of enterprise better than a limited company.

A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being, rather than maximising profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, mutual organization, a social business, or a charity organization. In Korea, Social Enterprise Promotion Act has been established and the purpose of this Act is to contribute to the enhancement of social unity and the quality of life of citizens by supporting social enterprise in the creation of new job opportunities and the expansion of social services that have been undersupplied in our society. In United States, many states offers new business forms for the social enterprise. And the community interest companies(CIC), the organization form that the U.K. established as a legal designation for social enterprise in UK. In many country, the new legal forms for the social enterprise, because it is that the Corporation of the Commercial Law is inappropriate for social enterprise. The Social Enterprise means an enterprise certified in accordance with Article 7 of this Act as one that pursues a social objective aimed at enhancing the quality of life of community residents by providing vulnerable social groups with social services and job opportunities while conduction its business activities, such as the production and sale of goods and service. But, it is necessary for the improvement of Social Enterprise Promotion Act and other Enterprise Establishment Acts to revitalize the Social Enterprise. In this article, with these issues in mind, I would like to explore problems and remedies of Social Enterprise Promotion Act and other Enterprise Establishment Acts.

Historically the trust was a ``conveyancing`` device for real estates designed to avoid rigidities of intestacy and the tax burdens. But in late 19th century when financial markets started to produce new investment products, the trust underwent radical transformation. As the portfolio of financial assets displaced family land as a dominant form of trust property, the trust has become a ``management`` vehicle for holding such assets, and the nature of the trusteeship radically changed. The trustee was now required to perform ``active manager`` role rather than ``passive custodian`` role. The equity courts in UK and many states in US developed a series of trust investment law, reflecting the enhanced management discretion on the trusteeship. Korean Trust Act has also adopted similar stance as to investment law to Anglo-American style and equipped the Korean trustees with similar powers and duties. This article investigates among other things whether the standard of care on the Korean trusteeship should be that imposed upon a mandatee or that upon a voluntary bailee. It is argued here that the standard of care upon a trusteeship should be flexible enough to cover both bailee standard and mandatee standard. In investigating the standard issue, following issues are also researched: (i) the influence of the new financial products and the enhanced management powers on the trusteeship, and (ii) the separate development of trust investment law and fiduciary law that is triggered by the enhanced management powers. It is also argued here that although the Korean investment law is in a developing stage such as that of ``legal list``, it is possible for investors to impose ``prudent investor`` standard upon the Korean trustees by inserting such terms in a trust contract. On the other hand, it is argued in this article, that Korean fiduciary law is well developed to cover conflict of interest issues and expressly stipulated in the Korean Trust Act.

The Korean Commercial Act regulates transactions between directors, major shareholders under Article 542-8 (2) 6 etc. and Company by Article 398 and 542-9 (3). When directors, major shareholders intend to engage in a transaction with the company for his own account or for the account of a third party, he shall in advance disclose material facts of the relevant transaction at the board of directors and shall obtain approval therefrom. In such cases, the relevant transaction shall be fair in terms of its particulars and procedures. And where a listed company determined by Presidential Decree § 35 (4), intends to engage in transactions that fall under the large scale of a single transaction or the total amount of transactions of Article 542-9 (3) 1·2 with or for the largest shareholder, his specially related persons, and such listed company``s specially related persons prescribed by Presidential Decree § 35(5)·34(4), the company shall obtain approval thereof from the board of directors. I thought that duty of fair dealing of directors-senior executives-controlling shareholders on U.S. MBCA and Principle Corporate Governance of ALI had an influence on conflict-of-interest statute Article 398, 542-9 (3). This paper analyzed meaning and material issues of (i) related person, (ii)an extent of conflicting interest transaction, (iii) required disclosure, (iv) authorization in advance or ratifies by disinterested directors or shareholders, (v) fair to the corporation etc under Article 398, comparison with MBCA or PCG. I especially explained we needed to take into account the process by which the transaction was shaped and approved and any relevant objective indicators of fairness price. In an additional sense as well, the court may consider in the full business context of a transaction in determining fairness. This paper challenges a new analysis by the dualism(distinguishing between "intentionally or negligently" and "negligence of performing his duty"), about what a appropriate principle of the burden of proving was, when Article 399 applied the rule of liability to company to a director in violation of Article 398. And this paper said about the application conflict of Article 398 vs Article 542-9 (3) and presented an amendment of Article 542-9(3). In this paper, an main idea of an amendment of Article 542-9(3) is to standardize the requirement of fulfillment the duty of fair self-dealing on Article 398 and Article 542-9(3).