Ministry of Justice Releases “Guide to the Amended Commercial Act on Mandatory Cancellation of Treasury Shares”

Includes Answers to Key Questions from the Business Community

On March 11, the Ministry of Justice released the “Guide to the Amended Commercial Act,” which organizes answers to major questions from the public and the business community regarding the key points of the revised Commercial Act.

The guide covers a range of practical topics, including: ▲companies subject to the amended Commercial Act; ▲procedures for the cancellation of treasury shares; ▲the meaning of “reasons necessary to achieve business objectives” as grounds for holding or disposing of treasury shares; ▲whether annual approval by the general meeting of shareholders is required for treasury share holding and disposal plans; and ▲the approval period by the general meeting of shareholders for holding acquired treasury shares.

The amended Commercial Act, which came into effect on March 6, stipulates that, in principle, companies must cancel treasury shares they have acquired, but may exceptionally retain or dispose of them with the approval of the general meeting of shareholders.

Justice Minister Jung Seongho stated, “We hope that the Guide to the Amended Commercial Act will help the smooth implementation of the revised law and assist companies ahead of their regular general meetings of shareholders. We will continue to listen to the voices of the public and businesses and work for the sustainable growth of our companies.”

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