(a) What are the main form of business organisation for medium and large scale enterprises in this economy?

There are four types of businesses in Korea: partnership, limited partnership company, limited company (yuhan hoesa), joint stock company (chusik hoesa). Since the majority of businesses take the form of a chusik hoesa, we will mainly address the issues relating to chusik hoesa in our discussion below.

 

(b) Is there a system of registration for these business organizations? If so, briefly describe.

Korea has a business registration system for chusik hoesa. All chusik hoesa must be registered with commercial registry office.

 

(c) Are there any minimal capitalisation requirements for these enterprises?

Minimum capital requirement for a chusik hoesa is KRW50,000,000 and the par value of each stock must be KRW5,000 or more (however, for listed companies and registered companies, the par value of stock may be KRW100 or more).

 

(d) Briefly describe the main features of each type of these business organisations, by reference to public/private/state ownership and management; accounting and auditing responsibilities (particularly the standards which apply to accounting and auditing practices); director and management responsibility (including, if relevant, possible liability for debts); and the role of regulatory authorities regarding these enterprises.

Although most chusik hoesa are privately owned, some have government ownership as well. A chusik hoesa maintains its accounting books in accordance with generally accepted Korean accounting principles. For chusik hoesa that are government owned, these businesses must adhere to budget accounting standards as determined by the government. Directors and management have liability in case they willfully or through gross negligence cause damage to the company. In addition, directors would liable as joint and several guarantor if they have agreed to jointly and severally guarantee the company's obligations. Once a chusik hoesa is established, the role of regulatory authorities is minimal (except as to those regulatory matters relating to the particular business or operation of the company; such as securities regulations, fair trade regulations, etc.)

(a) Are there any relevant observations to make concerning political, social (powerful family), financier (bank equity or involvement) or cultural controls or influences in respect of these types of business organisation?

Political, social, financier or cultural control and influences may exist with respect to a particular company. However, this would not be so merely because such a company is a chusik hoesa. For example, there may be controls for chaebol companies because they are chaebol companies, and not because they are a chusik hoesa.