Starting Tomorrow, the 'Sosanggongin Basic Act' Enforced... "Support Maintained for 3 Years Even if Sales Increase"

On the 22nd, as social distancing measures to prevent the spread of the novel coronavirus infection (COVID-19) continue, the food street in Mapo-gu, Seoul, appears quiet. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Bo-kyung] A grace period system will be introduced that allows businesses that have graduated from small business owner status due to increased sales to continue receiving support for three years.

According to the Ministry of SMEs and Startups on the 4th, the "Small Business Basic Act," which was enacted and promulgated in February last year, passed the Cabinet meeting on the 26th of last month and will take effect tomorrow (the 5th).

With the enforcement of the law, a grace period system for small business owners will be introduced, and a Small Business Policy Deliberation Committee and a specialized research evaluation agency will be established.

First, even if a business exceeds the scope of small business owners due to increased sales or employment size, a grace period system will be introduced that considers them as small business owners for three years. The sales amount qualifying as a small business owner ranges from 1 billion to 12 billion KRW depending on the industry, and the number of regular employees is fewer than 5 or 10 depending on the industry.

With the introduction of this grace period system, businesses that have just graduated from small business owner status can also receive support for three years.

Additionally, a Small Business Policy Deliberation Committee chaired by the Minister of SMEs and Startups will be established. This committee will include vice ministers of central administrative agencies and private experts as members to oversee and coordinate small business policies.

Legal grounds have also been stipulated to support digitalization so that small business owners can quickly respond to new consumption and distribution trends such as the non-face-to-face and online economy.

The enforcement decree of the Small Business Basic Act will also take effect from the 5th. The decree defines the number of regular employees by industry that determines the scope of small business owners and cases where the grace period system does not apply.

The contents to be included in the small business owner status survey are specified as the status of small business owners by industry and region, startup status, and management types, and the scope of statistical compilation is detailed as the status of small business owners, management conditions, trend analysis, and outlook.

Details related to the convening and resolution of the Small Business Policy Deliberation Committee’s operations are stipulated, and the composition and operation of the "Working Adjustment Meeting" to support agenda consultation and the "Expert Committee" for professional review of relevant matters are established.

Park Chi-hyung, Small Business Policy Officer at the Ministry of SMEs and Startups, stated, "We will continuously support small business owners so that they can be the foundation of our economy and a proud subject of growth."

This content was produced with the assistance of AI translation services.