Corporate Governance for Foreign Companies

Every fiscal year, a corporation must finalize its financial statements and have them approved by the shareholders.

The Mandate: An AGM must be held within three months after the end of each fiscal period (usually by the end of March for companies with a December fiscal year).

Board Involvement: Before the AGM, the board of directors must meet to approve the agenda and the financial reports.

Documentation: These meetings require formal minutes (minutes of meetings) signed or sealed by the attendees to be legally valid.

Historically, Korean law strictly required physical, face-to-face meetings for valid corporate resolutions. However, since the pandemic, the legal environment has evolved.

Video Conferencing: It is now legally permissible to hold board meetings and shareholder meetings via video conference, provided certain procedural requirements are met.

Accessibility for Global Headquarters: This is a major advantage for foreign-invested companies, as it allows board members and shareholders residing abroad to participate officially without traveling to South Korea.

Skipping these formal steps might seem inconsequential for a small office, but the risks are real:

Administrative Fines: Failure to hold meetings or maintain proper minutes can result in fines from the court.

Operational Gridlock: Important corporate actions, such as changing directors, amending the articles of incorporation, or distributing dividends, cannot be executed without these formal resolutions.

Corporate Governance Audit: During a due diligence process or when applying for certain government benefits, the lack of proper corporate records can be a major red flag.

To help you maintain compliance without the burden of hiring a dedicated corporate secretary, we provide specialized support for your annual governance cycle:

Video Conference Hosting: Upon request, we can organize and host the necessary virtual meetings, ensuring that all participants can join from their respective locations.

Minutes Preparation: If you hold your meetings independently, we assist in drafting the official minutes in compliance with Korean law, ensuring that all discussions and resolutions are properly recorded and stored.

Administrative Guidance: We provide reminders for upcoming deadlines and guide you through the signing and sealing process to ensure all documents are legally binding.