Prior to the 2009 amendments to the Korean Commercial Code, electronic voting was not specifically authorized. I highly recommend to most clients the utilization of electronic voting if the foreign shareholder is in a closed corporation in Korea.
The method to include this voting is well known by most attorneys experienced in the drafting of Korean joint venture agreements and shareholder agreements for non-Korean clients.
In order for a company to utilize electronic voting:
- The board of directors must approve voting by electronic means;
- The Company’s articles of association must not exclude voting via electronic means;
- The notice of the general meeting of shareholders, must note that electronic voting is allowed, must note the internet address to cast the vote, the period in which votes may be cast and the basic technical details. The voting must end the day before the shareholder meeting;
- Prior to voting, the shareholder must have a “registered electronic signature.” This is sometimes cumbersome for foreign shareholders, but is manageable with a little assistance from your lawyer.
The Board of Directors is prohibited from revealing the results of the electronic voting until the vote is held at the shareholder meeting.
In contrast, if a shareholder vote in Korea is to be conducted by mail, the articles must specifically note that voting by mail is allowed. Thus, the articles are required to be amended prior to the vote.
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