A Comparative Study On Legal System Of Incorporated Company Between China And Korea

From 1960's Korea made great efforts in economical development, and became one of the newly industrializing countries(NICs) in 1980's. Evidently, corporation law plays a considerable role in guaranteeing its economical development. The Commercial Code of Korea(KCC) is derived from Japan and developed by drawing on the experience of other market-oriented Western countries. The corporation law of Korea passed through the phases from immature to maturely developed. As there is a very similar background between China and Korea in many aspects such as history, culture and economy, and now there are some resembled promblems which exists in incorporated companies in two countries, such as the structure of stock ownership and company governance, I would like to compare some aspects of the legal system of incorporated company between China and Korea. Before writing this paper, I collected a lot of materials about the corporation law of Korea, including original academic works on the corporation law of Korea and the newest legislative development on KCC. The study is to make a rough contrast in the establishment, capital system of incorporated company, protection of shareholders, corporate governance between China and Korea. The defects in the process of revising the KCC will also be pointed out and be some irradiance to our country at the same time. Finally several legislative suggestions will be put forward. This paper consists of six parts. Chapter 1 is about establishment and capital system of incorporated company. Initiator, principle of establishment, process of establishment, defects of establishment, capital system, minimum capital, form of capital, and breach of capital system will be encircled. Chapter 2 is to compare the legal protection of shareholders'rights, which includes vote right, overture right, accumulative vote right, new stock application right, buy-back right of opposing shareholders, etc. Chapter 3 has a discussion on the different regulation of shareholders'conference, which includes summon of conference, elements of resolution, relief of defects in resolution, etc. Chapter 4 is on the comparison of board of directors. There will be some discussion on formation of the board of directors and its authority, liability and obligation, and analysis on the orientation of directors'function. Chapter 5 is on the subject of supervision system, board of supervisors and independent directors system in China will be compared with the supervision system in Korea, which includes supervisor, supervision committee, outsider inspector, temporary inspector and social organization. The reason of the difference, advantages and disadvantages will also be discussed in this chapter. In Chapter 6, the problems arising from the revision and enforcement of KCC will be pointed out and be some irradiance to China. As Korea inconditely copied the Commercial Code of Japan at the very start, there were many problems in implementing. After the financial crisis in 1997, Korea began to revise its corporation law from its actual condition, and has materially altered in many aspects, such as perfection of corporate governance and enhancing the protection of minority shareholders and sucessfully transplanted many legal system drawing on the experiences of other countries. Finally, several legislative suggestion on the revision of Corporation law in China will also be put forward in this chapter, for example, relaxing restriction on legal system and strengthening initiator's liability, enhancing protection of minority shareholders, perfecting corporate governance, etc.