The Korean Corporate Restructuring Promotion Act of 2018: Korean Insolvency Law Updates

The recently enacted Korean Corporate Restructuring Promotion Act (hereinafter as “CRPA”) focuses on facilitating “…constant corporate restructuring and promotes the stabilization of financial markets and the development of the national economy, by providing for matters necessary to promptly and efficiently implement corporate improvement of enterprises with signs of insolvency.” (Art 1 (Purpose) CRPA). The CRPA is intended to facilitate out-of-Korean-court restructuring procedures. Often, debtors prefer out-of-court proceedings over in-court proceeding, because the belief that out-of-court proceedings shall lead to more flexibility and less costs. In October 2018 a revised version of CRPA 2016 entered into force. The revised CRPA, provides eased legal conditions for creditor banks. The key amendments to Korean CRPA 2018 are noted below. Liability-Exemption for Creditors Acts and Omissions Creditor financial institutions, their officers and employees have liability while restructuring a debtor company. But they shall not be responsible for the results, if they properly fulfilled their

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Establishing a Company in Korea: New Korean Corporate Forms Available under Revised Korean Code

According to the Ministry of Justice, over 95% of corporations in Korea are formed as a Chushik Hoesa, while the Korean Commercial Code (KCC), at this time, defines four different types of Korean potential business entities.  In order to allow a little more flexibility, two new business forms have been created.  The recent amendment to the Korea Commercial Code, that will be promulgated from April of 2012, introduces two new forms of Korean business entities: Hapja Johap (LLP) Yuhan Chaekim Hoesa  (LLC) We expect that more foreign investors will choose the Hapja Johap and Yuhan Chaekim Hoesa forms and few new market entrants will utilize the Yuhan Hoesa form, because of the added flexibility of the Hapja Johap. Chushik Haesa (Joint Stock Company – Co. Ltd./Corp./Ltd.) Chushik Hoesa is the only corporate entity that is allowed, at the present, to publicly issue shares.  The revision will not change this.  The vast majority of incorporators in Korea chose the

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