In relation to the most common form of corporate business vehicle used by foreign companies in
your jurisdiction, outline the management structure and key liability issues.
Management structure
A stock company must have at least three directors, including one representative director, and an
in-house statutory auditor, unless the company has a total capital of less than KRW1 billion, in
which case there only needs to be one or two directors.
Management restrictions
There are no nationality or residency restrictions on directors, managers or statutory auditors.
Directors' and officers' liability
Directors have a fiduciary duty to the company, therefore if a director violates the company's
articles or applicable laws, or negligently fails to fulfil his/her duties, he/she will be jointly and
severally liable to the company (and, in some cases, to a third party), together with any director
who directly or indirectly approved the violating act, and must indemnify the company.
Parent company liability
Parent companies and subsidiaries are independent for legal purposes. A parent company is not
generally liable for the obligations of its subsidiaries unless:
It is obligated contractually.
It is liable under tort law.
Other exceptional circumstances apply.
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