There are four basic corporate entities under the Korean Commercial Code.
1. Chusik Hoesa (Joint Stock Company)
Only form of corporate entity that is allowed to publicly issue shares. An article will be posted on the specifics of forming a Chusik Hoesa in the next couple of weeks and a link will appear HERE when the article is completed.
2. Yuhan Hoesa (Limited Liability Company)
A closely held company that is prohibited from having more than 50 shareholders. In recent years a few foreign companies have chosen the Yuhan Hoesa, however, most foreign companies are advised and will form a Chusik Hoesa. A few companies, recently, have chosen this form because of possible U.S. tax benefits. I will explain the tax benefits in a follow-up article. A link will appear HERE when the article is completed.
3. Hapja Hoesa (Limited Partnership)
One or more partners may have unlimited liability and one or more partner may maintain limited liability. The entity is responsible for corporate taxes.
4. Hapmyung Hoesa (Partnership)
Must be formed by two or more partners and each partner maintains unlimited liability. The entity is responsible for corporate taxes.
- Starting a Company in Korea: Establishing a Foreign Capital-Invested Korean Company, Branch or Liaison Office
- Piercing the Corporate Veil in Korea: Suing Shareholders of a Corporation
- Korean Small Business Partnerships/Joint Ventures: Pubs, Distributors, Exporters, Boutiques, Franchises and Basic Manufacturing etc.
- Tax Liability of Controlling Shareholders in a Korean Company: Tax Law Updates
- Fiduciary Duties of Directors/Representative & Controlling Shareholders of Korean Companies
- So you Want to Start a Partnership/Joint Venture in Korea?