Annual General Meeting (AGM) Under the Korean Commercial Act

Annual General Meeting (AGM) Under the Korean Commercial Act

1. Obligation to Hold an AGM

Under Article 363 of the Korean Commercial Act (KCA), all limited liability companies and joint-stock companies must hold an Annual General Meeting (AGM) within a specified period after the end of the financial year.

• Typically, the AGM must be held within three months after the financial year-end (e.g., for companies with a December 31 year-end, the AGM must be held by the end of March).
• Main Purpose: Approval of financial statements, dividend declaration, reappointment of directors and auditors, and discussion of key business matters.

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2. AGM Process & Timeline

✅ AGM Notice & Invitation (At least two weeks before the AGM)

• Convener: The Representative Director (or a person designated by the Articles of Incorporation)
• Method of Notification:
  • Written or electronic notice to all shareholders
  • Public notice in a daily newspaper or electronic disclosure for listed companies
• Required Details in the Notice:
  • Date, time, and venue of the meeting
  • Agenda items and key resolutions
  • Instructions for participation (including proxy appointment, if applicable)

✅ AGM Meeting (Quorum & Voting Requirements as per Articles of Incorporation and KCA)

• Voting requirements:
  • General Resolutions: Majority approval of attending shareholders and at least one-quarter of total voting shares
  • Amendments to Articles of Incorporation and Major Decisions: Approval from two-thirds of total voting shares

✅ Post-AGM Procedures

• Minutes of Meeting (Under Article 374 of KCA):
  • Must include date, venue, attendees, resolutions, and voting results
  • Signed by the Chairperson and present directors and auditors
• Submission to Relevant Authorities (If Required):
  • Business report submission (for companies subject to external audits)
  • Corporate registration updates (if there are changes to directors or auditors)

3. Required Documents for AGM

✅ Company & Shareholder Information

• Latest Certificate of Corporate Registration (including all relevant details)
• Latest Company Constitution (Memorandum & Articles of Association)
• List of Current Directors & Auditors (including their term expiration dates)
• Auditor Information (if applicable)
• Financial Year-End (e.g., January 1 – December 31)

✅ Financial & Accounting Documents

• Latest Financial Statements (Balance Sheet, Income Statement, Statement of Retained Earnings)
• Auditor’s Report (if subject to external audit)
• Dividend Plan (if applicable)
• Director & Executive Compensation Details

✅ AGM Key Resolutions

• Proposed AGM Date, Time, and Venue
• Key Resolutions for Approval, including:
  • Reappointment or Election of Directors and Auditors (if their term has expired)
  • Dividend Declaration (if applicable)
  • Amendments to the Company Constitution (if necessary)
• Appointment of AGM Chairperson

✅ Compliance & Reporting Documents

• Latest Annual Business Report (if applicable)
• Previous AGM Meeting Minutes
• Tax Filing Documents (for corporate tax submission)

4. AGM Timeline Example

Timeline	Action Items
Financial Year-End (e.g., December 31)	Begin AGM preparation
4–6 weeks before AGM	Prepare financial statements & review key agenda items
At least 2 weeks before AGM	Send AGM notice to shareholders
By March 31 (for companies with Dec 31 year-end)	Hold AGM & pass resolutions
Within 1 week after AGM	Prepare and sign meeting minutes
If required	Update corporate registration & file necessary reports

5. Important Considerations & Practical Tips

✅ Review the Articles of Incorporation: Ensure the AGM procedures and voting quorum align with both the company’s constitution and the KCA.
✅ Utilize Written Resolutions if Applicable: If the company has a small number of shareholders, AGM matters can be approved via written resolutions with unanimous consent.
✅ Confirm Dividend Plans in Advance: If dividends will be distributed, review available retained earnings before proposing a dividend declaration.
✅ Check Director & Auditor Terms: If reappointment is necessary, obtain shareholder approval and review any required registration updates.