(a) Method and effect of transfer of stocks before issuance of share certificates;

(b) A statement of transfer of preemptive rights where the articles of incorporation or a resolution of the board of directors does not determine the transfer of preemptive rights;

(c) Method of transferring stocks or preemptive rights certificates before issuance of stock certificates and requisite for setting up against third parties without issuance of preemptive rights certificates;

A. The transfer of shares made 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 date of the establishment of the company or the date of the payment of new shares. In this case, the transfer of shares takes effect only by the declaration of intention of the parties in accordance with the general principle as to the transfer of nominative claim, and the transfer of shares on the register of shareholders under Article 337(1) of the Commercial Act is merely a requisite for setting up against the transferee of shares to exercise the shareholder's rights in relation to the company. Thus, the transferee of shares before the issuance of share certificates can solely file a claim for the transfer of shares with the company by proving the fact of the transfer of shares by himself/herself without the need of the transferor's cooperation

B. According to Article 416 subparagraph 5 of the Commercial Act, matters concerning the transfer of preemptive rights by a resolution of the articles of incorporation or the board of directors of the company are to be decided. The necessity to restrict the transfer of preemptive rights lies mainly in the convenience of the company’s business of issuing new stocks. Furthermore, unlike the strict provision that the Commercial Act has no effect on the company, the transfer of preemptive rights can be freely decided by the articles of incorporation or the resolution of the board of directors with respect to the transfer of preemptive rights, since the company did not make a decision on the transfer of preemptive rights by the articles of incorporation or the resolution of the board of directors, the transfer of preemptive rights is not entirely prohibited, and if the company consented to such transfer, it is also effective on the company.

C. The transfer of shares prior to the issuance of share certificates is in accordance with the general principle of the transfer of nominative claims, and the transfer of preemptive rights for which certificates of preemptive rights have not been issued is in accordance with the general principle of the transfer of nominative claims corresponding to the transfer of shares prior to the issuance of share certificates. Therefore, it is reasonable to view that the transfer of shares prior to the issuance of share certificates or the transfer of preemptive rights for which certificates of preemptive rights have not been issued is the notification of transfer by a certificate with a fixed date or the consent of the company as in the transfer of nominative claims. The transfer of shares in the register of shareholders is not only a requisite for setting up against the legitimate transferee in relation

(a) Articles 335(2), 337(1)(b) and 416 subparag. 5 and 420-3(1) of the Commercial Act;

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Han-sung, Attorneys Lee Jong-soo and 1 other, Counsel for plaintiff-appellant)

Plaintiff

Defendant 1 and one other, Defendant 1 et al., Counsel for the defendant-appellant-appellee

Seoul Civil District Court Decision 93Na25324 delivered on June 24, 1994

All appeals are dismissed.

The costs of appeal shall be assessed against the defendants.

The grounds of appeal No. 1 are examined.

Examining the evidence relations presented by the court below in comparison with the records, we affirm the measures that the representative director of the defendant company recognized and judged that the non-party 1 consented to the transfer of shares and preemptive rights on behalf of the plaintiff and the non-party 2, and there is no error of law by violating the rules of evidence or erroneous interpretation of the declaration of intention as argued in the above. There is no reason to argue.

The grounds of appeal Nos. 2 and 3 are also examined.

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 from the date of its incorporation or the date of payment of new shares. In this case, the transfer of shares takes effect only with the declaration of intention of the parties in accordance with the general principle as to the transfer of nominative claim. The transfer of shares in the register of shareholders under Article 337 (1) of the Commercial Act is merely a requisite to exercise shareholder's rights in relation to the company by the transferee of shares. Thus, the transferee of shares before the issuance of share certificates can solely prove that the transferee does not have to obtain the transferor's cooperation, unless there are special circumstances (see Supreme Court Decision 92Da16386 delivered on October 27, 1992).

Therefore, even if there is no change of entry in the register of shareholders in the register of shareholders, a transferee of shares before the issuance of share certificates can assert that he is a shareholder of the company as a person who has lawfully acquired shares, and the judgment of the court below that held to the same effect is just,

The ground of appeal No. 4 is examined.

According to Article 416 subparagraph 5 of the Commercial Act, matters concerning the transfer of preemptive rights by a resolution of the articles of incorporation or the board of directors of a company is to be decided. The necessity to restrict the transfer of preemptive rights lies mainly in the convenience of the business of issuing new stocks by the company. Unlike the strict provision that the Commercial Act has no effect on the company, the transfer of preemptive rights prior to the issuance of stock certificates can be freely decided by the articles of incorporation or the resolution of the board of directors. Thus, the transfer of preemptive rights is not entirely prohibited because the company did not make a decision on the transfer of preemptive rights by the articles of incorporation or the resolution of the board of directors, and if the company consented to such transfer, the transfer of preemptive rights is also effective on the company. Therefore, the judgment of the court below to the same purport is just and there is no ground for discussing

The grounds of appeal No. 5 are examined.

As long as the Plaintiff was confirmed to be a legitimate shareholder's right holder of the shares of this case against Defendant 1, the transfer of shareholder's name of the above Defendant on the shares of this case shall not be effective in relation to the Defendant Company. As such, the transfer of shareholder's name of the above Defendant Company, which is null and void in the transfer of shareholder's name to the shares of this case in the future of the Plaintiff, shall not be any obstacle to the transfer of shareholder's name

The grounds of appeal No. 6 are examined.

As seen earlier, the transfer of shares prior to the issuance of share certificates is subject to the general principle of the designated transfer of shares. It is reasonable to regard the transfer of shares prior to the issuance of share certificates as the general principle of the designated transfer of shares in accordance with the general principle of the designated transfer of shares prior to the issuance of share certificates as the transfer of shares prior to the issuance of share certificates or as the third party of the transfer of preemptive rights prior to the issuance of share certificates as the requisite for setting up against the third party of the transfer of outstanding shares prior to the issuance of share certificates as the transfer of nominative claim, and the transfer of shares prior to the issuance of share certificates is merely a requisite for setting up against the legitimate transferee to exercise

Therefore, the court below's determination that the plaintiff who received the consent of the defendant company by the certificate with the fixed date is a legitimate transferee of shares and preemptive rights, and there is no reason for the argument.

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 Jeong Jong-ho (Presiding Justice)