There are four basic corporate entities under the Korean Commercial Code. The first to forms are the most usual forms for a foreign capital-invested company to form a company in Korea.
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.
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.
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. Most foreign companies do not form this type of entity even if entering into a joint venture with a Korean partner.
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. Most foreign companies do not form this type of entity even if entering into a joint venture with a Korean partner.
If you would like to schedule a call with a lawyer in Korea please schedule a call at: Schedule a Legal Consultation.
- Establishing a Company in Korea: New Korean Corporate Forms Available under Revised Korean Code
- Starting a Company in Korea: Establishing a Foreign Capital-Invested Korean Company, Branch or Liaison Office
- English-Speaking Business Lawyers in Seoul, Korea: Corporate Law & Compliance Team at IPG Legal
- Last week’s Recap of the Top Legal Headlines in South Korea for the week of August 9, 2021:
- Korea emerges as an Arbitration Hub in East Asia
- Alternative Legal Fee Arrangements at Korean-based Law Firms: Limited Scope Representation Explained
- Piercing the Corporate Veil in Korea: Suing Shareholders of a Corporation
- So you Want to Start a Partnership/Joint Venture in Korea?
- Korean Small Business Partnerships/Joint Ventures: Pubs, Distributors, Exporters, Boutiques, Franchises and Basic Manufacturing etc.
- Succeeding in Business in Korea