[1] The validity of the transfer of shares before the issuance of share certificates under Article 335 (2) of the Commercial Code

[2] Whether a company can acquire its own shares without compensation (affirmative)

[1] The transfer of shares made before the issuance of share certificates under Article 335 (2) of the Commercial Code shall be effective against the company at the expiration of six months after the incorporation of the company or after the date of payment of new shares. In this case, the transfer of shares shall take effect only by the declaration of intention of the parties in accordance with the general principle as to the transfer of nominative claim, and in the case of the issuance of share certificates, the transfer of shares shall not take effect on the ground that

[2] In principle, a company may not acquire its own shares on its own account, but in cases where the company cannot endanger the capital foundation or harm the interests of creditors and shareholders, such as acquiring its own shares without compensation, it may exceptionally allow the acquisition of its own shares.

[1] Article 335 (2) of the Commercial Act / [2] Article 341 of the Commercial Act

[1] Supreme Court Decision 92Da16386 delivered on October 27, 1992 (Gong1992, 3261), Supreme Court Decision 94Da47728 delivered on March 24, 1995 (Gong1995Sang, 1731), Supreme Court Decision 94Da36421 delivered on May 23, 1995 (Gong1995Ha, 2226) / [2] Supreme Court Decision 88Nu9268 delivered on November 28, 198 (Gong190, 163)

Plaintiff 1 and five others (Attorney Ha Young-chul, Counsel for the plaintiff-appellant)

Distribution of Co., Ltd.

Daegu High Court Decision 93Na969 delivered on January 11, 1996

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

(1) On November 27, 1985, Plaintiff 1 and Nonparty 2, who were the shareholders of Defendant 1 and Nonparty 1 at the time of the above 00 shares were owned by Nonparty 1 and Nonparty 2, who were the representative director at the time of the above 80,000 shares and paid 83,70,000 shares to Nonparty 3 who were directors at the time of the above 80, and the above 30% shares were owned by Nonparty 1 and distributed 70,00 shares to Nonparty 1 and the above 80,00 shares were transferred to Nonparty 1 and the above 60,000 shares were transferred to Nonparty 1. On the premise that the above 10,00 shares were transferred to Nonparty 1 and the above 6,00 shares were transferred to Nonparty 1 and the above 10,000 shares were transferred to Nonparty 1 and the above 10,000 shares were transferred to Nonparty 6, each of the above 7,000 shares were transferred to Defendant 1.

In light of the records, there is no evidence that evidence Nos. 1, 2, and 2-2 of evidence Nos. 1, 1, 2, and 2-2 of evidence Nos. 3-1, 2, and 5-1 and 2 of evidence Nos. 5-2 of evidence Nos. 1, 1, 2, and 3-1, and 5-2 of the evidence Nos. 1, 2, which the court below employed as evidence of fact-finding, was forged. Thus, even if the court below did not make a decision

(2) The transfer of shares before the issuance of share certificates under Article 335 (2) of the Commercial Act is effective against the company at the expiration of six months after the incorporation of the company or the due date of new shares. In this case, the transfer of shares takes effect only by the declaration of intention of the party in accordance with the general principle as to the transfer of nominative claim. It cannot be said that the transfer of shares does not take the procedure as to the transfer of nominative claim (see, e.g., Supreme Court Decisions 94Da36421, May 23, 1995; 94Da4728, Mar. 24, 1995; 91Da14093, Aug. 13, 1991; 5,000 shares held by the plaintiff 1, which were transferred to the non-party 5,00 shares, non-party 7, non-party 8, non-party 9, non-party 11, and non-party 200 shares shares are justified.

(3) Although the company, in principle, fails to acquire its own shares on its own account (see Article 341 of the Commercial Act), the company may exceptionally allow the acquisition of its own shares in cases where it does not endanger the company’s capital foundation, such as acquiring its own shares without compensation, or where it is not possible to harm the company’s creditors and shareholders’ interests. The judgment below to the same purport is just and it does not err in the misapprehension of legal principles as to Article 341 of the Commercial Act, such as theory,

(4) Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Don-hee (Presiding Justice)