Starting to Organize the 'Nudeogi Corporate Law'... Kwon Chil-seung to Submit Company Law by End of September

Legislative Public Hearing on Company Law Enactment Held on the 1st
Professor Kwon Jae-yeol of Kyung Hee University Releases Service Report
Kwon Chil-seung: "Legal System Reform More Urgent Than Corporate Regulation Overhaul"

The movement to unify the fragmented company-related legal system, dispersed across the Commercial Act and the Capital Markets Act, into a single 'Company Act' has gained momentum in this regular session of the National Assembly.

On the 1st, Kwon Chil-seung, a member of the Democratic Party of Korea, will hold a legislative public hearing titled 'Legislative Public Hearing for Enhancing National Competitiveness and Establishing an Advanced Company Legal System' at the National Assembly to propose the Company Act bill. The bill is expected to be submitted to the National Assembly as early as the end of September.

At the hearing, Professor Kwon Jae-yeol of Kyung Hee University Law School will present a research report titled 'The Necessity and Specific Measures for Enacting a Single Company Act,' commissioned by Kwon's office, and discussions will be held with representatives from corporations, law firms, and government officials.

Currently, unlike countries such as the United States, Japan, the United Kingdom, and Germany, South Korea does not have a separate Company Act; instead, the Commercial Act serves as the main framework with related laws scattered around. At a discussion hosted by Kwon in May, the need to improve the current legal system was confirmed. In the existing company-related laws, regulations on governance are found in the Commercial Act, while those on financial management are in the Capital Markets Act, resulting in a dual legal system. The relevant ministries are also divided, making it difficult to amend related laws and causing a lack of consistency.

[Image source=Yonhap News]

The amendment bill commissioned by Kwon focuses primarily on separating the company section from the Commercial Act. Regarding controversies such as the jurisdiction of ministries that may arise upon the establishment of the new law, Professor Kwon suggested, "In principle, the Ministry of Justice should be the competent authority, but even after unifying the law, a compromise approach is required where the Financial Services Commission retains jurisdiction only over regulations related to the financial structure of listed companies, recognizing existing vested interests." Additionally, the bill includes provisions to incorporate parts of the general provisions of the Commercial Act applicable to company law into the Company Act and to prioritize regulations related to stock companies.

Kwon Chil-seung emphasized, "More urgent than corporate regulatory reform is enhancing coherence and clarity through legal system maintenance. With the current fragmented company law structure, our companies will inevitably fall behind not only in the rapidly changing economic environment but also in competition with advanced countries. Now is the time to invigorate our companies by unifying the Company Act in line with global standards."

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