Corporation:  Role of Representative Director under Korean law

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Under Korean commercial laws, the representative director of a corporation (a joint stock company that is normally called jushik hoesa in Korean) is responsible for implementation of resolutions of the board of directors and shareholders.  The representative director is also responsible for making decisions in regard to the ordinary matters not stipulated under the Commercial Code of Korea and articles of incorporation as being subject to authorization by the shareholders or the company board. The representative director is normally elected by a board resolution among the directors of the company board.  In the event that more than 1 director is appointed as representative director, the articles of incorporation must stipulate whether the directors are to act jointly or individually in representing the corporation.

 

If deemed necessary in implementation of the business affairs of the corporation in accordance with the resolutions of shareholders or the company board, the representative director has also power to legally represent the corporation.  This is why control over the seal (of the representative director) and its use is of importance in Korea because, under Korean law, a document executed in the name of the representative director and by use of the registered seal may be assumed as a document that is validly and effectively executed by the corporation, thereby having a binding effect over the corporation.  If the corporation wants to deny the legal effect of such document, it must prove that the seal was used without due authorization and the counter-party acted with bad faith with knowledge of such unauthorized use of the seal.