Joint Stock Company vs Limited Liability Company in Korea
Two most common types of a corporation are Joint Stock Company (“chusik hoesa” in Korean, which is similar to a public limited company) and Limited Liability Company (“yuhan hoesa” in Korean, which is similar to a private limited company).
Set forth below is a comparison table of key features of JSC and LLC in Korea.
| JSC | LLC | |
| Investigation by Inspectors at the time of Incorporation | Yes (Article 299 of the Korean Commercial Act, “Commercial Act”) | No |
| Public Offering | Allowed (Incorporation by subscription allowed) | Not allowed |
| Director | 3 or more, provided that, however, in cases of a company with total capital of less than KRW 1,000,000,000*, the number of directors may be 1 or 2
*KRW 1,000,000,000 is roughly about USD 860,000 |
1 or more |
| Domicile | A director/ representative director is not required to be domiciled in Korea so s/he can be a non-Korean resident living anywhere in the world. However, the representative director must provide its home address for business registration. | A director/ representative director is not required to be domiciled in Korea so s/he can be a non-Korean resident living anywhere in the world. However, the representative director must provide its home address for business registration. |
| Board of Directors | Mandatory
(Provided that, not necessary in cases of a company with total capital of less than KRW 1,000,000,000) |
Not necessary |
| Auditor | Mandatory, provided that, however, optional in cases of a company with total capital of less than KRW 1,000,000,000 | Optional |
| Capital Increase | Resolution of the board of directors | Special resolution of a general meeting of members |
| Issuance of Bond | Yes | No |
| Voting Right | 1 voting right per 1 share
(No exceptions allowed) |
1 voting right per 1 unit of investment
(Provided that, the articles of incorporation may provide otherwise with regard to the number of votes, Article 575 (Members’ Rights to Vote) of the Commercial Act) |
Should you have any difficulty in deciding as to which type of a company is most appropriate for your business in Korea, please simply contact us!