[1] In a case where several agenda items are presented at a general meeting of shareholders and each resolution has been made, whether each resolution for revocation of the resolution of the general meeting of shareholders must be separately determined for each resolution on each agenda (affirmative)

[2] The case holding that, where a lawsuit seeking nullification of a resolution of a general meeting of shareholders was filed with respect to a resolution of the appointment of a director within two months from the date of the resolution of the general meeting of shareholders, and the lawsuit seeking nullification of a resolution of the amendment of the articles of incorporation and the resolution of the appointment of an auditor were additionally joined, after two months from the date of the resolution, the "action seeking nullification of a resolution of the general meeting of shareholders" as to each of the above resolutions was added to "action for revocation", the above amendment of the articles of incorporation and the revocation of the resolution of the appointment of an auditor are deemed unlawful since the above additional consolidation

[3] Presumption of entry in the register of shareholders

[4] The elements for recognizing that a shareholder on the register of shareholders, who is a shareholder on the register of shareholders, cannot exercise his/her voting rights lawfully in relation to the company

[1] A lawsuit seeking revocation of a resolution of a general meeting of shareholders shall be brought within two months from the date of the resolution pursuant to Article 376(1) of the Commercial Act. A lawsuit brought after the expiration of this period is unlawful. In addition, where multiple items are presented at a general meeting of shareholders and each resolution was made, whether the above period of filing a lawsuit should be separately determined for each resolution on each item.

[2] The case holding that the above amendment of the articles of incorporation and revocation of the resolution of the general meeting of shareholders may be deemed to have been filed when the lawsuit seeking nullification of the resolution of the general meeting of shareholders is additionally combined, after two months have passed from the date of the resolution, after filing a lawsuit seeking nullification of the resolution of the general meeting of shareholders with respect to the resolution of the general meeting of shareholders as to the appointment of directors within two months from the date of the resolution of the general meeting of shareholders, and after two months have passed from the date of the resolution, the lawsuit seeking nullification of the resolution of the general meeting of shareholders was additionally combined, and that the above amendment of the articles of incorporation and the above revocation of the resolution of the appointment of auditors may be deemed to have already been filed when the lawsuit seeking nullification of the resolution

[3] The shareholder registry is presumed to be a shareholder of the company, and the company bears the burden of proof to reverse the shareholder registry.

[4] It is presumed that a shareholder registered as a shareholder in the register of shareholders is entitled to exercise the voting right at the general meeting of shareholders, barring special circumstances, a shareholder listed in the register of shareholders can legally exercise the voting right in relation to the company. Therefore, to recognize that a third party, who is not a shareholder listed in the register of shareholders, is not entitled to exercise the voting right in relation to the company despite being a shareholder listed in the register of shareholders, is insufficient solely for the reason that the third party, who is not a shareholder listed in the register of shareholders, has paid the subscription price for shares. In light of the internal relationship between the third party and the shareholder listed in the register of shareholders, the circumstances and purpose of the acquisition of shares and the registration of the register of shareholders, and the contents of exercise of voting right as a shareholder after the registration of the register of shareholders, it should be proved that the shareholder listed in the register of shareholders has lent only the name during the process

[1] Article 376 (1) of the Commercial Act / [2] Articles 376 (1) and 380 of the Commercial Act / [3] Articles 337 (1) and 352 of the Commercial Act, Article 288 of the Civil Procedure Act / [4] Articles 337 (1), 352 and 376 (1) of the Commercial Act

[3] Supreme Court Decision 84Meu2082 delivered on March 26, 1985 (Gong1985, 623)

Plaintiff

Defendant corporation

Seoul High Court Decision 2007Na11486 decided July 6, 2007

The judgment of the court below is reversed. The judgment of the court of first instance on the amendment of the articles of incorporation and the appointment of auditor shall be revoked, and this part of the lawsuit shall be dismissed, and the remaining

1. We examine the grounds of appeal ex officio prior to determination.

A lawsuit for cancellation of a resolution of a general meeting of shareholders shall be brought within two months from the date of the resolution pursuant to Article 376 (1) of the Commercial Act, and the lawsuit brought after the expiration of the period is unlawful. In addition, where multiple items are presented at the general meeting of shareholders and each resolution has been made, whether the period for filing the lawsuit shall be separately determined for each resolution for each

According to the records, the plaintiff filed a lawsuit to nullify the resolution of the general meeting of shareholders on June 29, 2005 only with respect to the resolution of appointment of non-party 1 among the resolution of the special meeting of shareholders held on April 29, 2005 at the defendant company's temporary general meeting of shareholders (hereinafter "the resolution of this case"). The plaintiff subsequently joined the lawsuit to confirm the invalidity of the resolution of the general meeting of shareholders on May 17, 2006 and July 19 of the same year after two months from the date of the resolution of the resolution of the provisional general meeting of shareholders. The plaintiff subsequently changed the lawsuit to invalidate the resolution of the general meeting of shareholders on November 1, 2006 to the lawsuit to invalidate the resolution of the above provisional meeting of shareholders, and the defendant company attended the above provisional general meeting of shareholders and allowed them to exercise their voting rights at the above provisional general meeting of shareholders. The plaintiff asserted that the above resolution of this case is obviously unfair.

Examining in light of the legal principles as seen earlier, the part concerning the resolution to amend the articles of incorporation and the revocation of the appointment of auditor in the instant lawsuit can be deemed as filing a lawsuit for revocation of the resolution of the general meeting of shareholders when the lawsuit to nullify the invalidity of the resolution of each general meeting of shareholders is additionally combined (see Supreme Court Decision 2007Da4000, Sept. 6, 2007). However, even so, even if so, it is apparent that the period of filing a lawsuit for two months already passed at the time of the said additional consolidation has

Nevertheless, the lower court determined that the part on the amendment of the articles of incorporation and the resolution on appointment of auditor in the instant lawsuit was lawful. In so determining, the lower court erred by misapprehending the legal doctrine on the filing period of a lawsuit seeking revocation of the resolution of the general meeting of shareholders and the litigation requirements

2. We examine the grounds of appeal.

A. As to whether the Plaintiff was merely a type shareholder

The shareholder registry is presumed to be a shareholder of the company, and the company bears the burden of proving the denial of shareholder's rights (see, e.g., Supreme Court Decision 84Meu2082, Mar. 26, 1985).

According to the reasoning of the judgment below, the court below rejected the claim that the plaintiff was registered as a shareholder holding 6,000 shares out of 38,000 shares issued by the defendant company, and that the defendant company's assertion, that is, the 6,000 shares were acquired by borrowing the plaintiff's name, and the plaintiff cannot seek cancellation of the resolution of appointment of director of this case since it was merely a form shareholder lending the plaintiff's name as to the above shares.

In light of the evidence duly admitted by the court below, the above judgment of the court below is just and there is no error of law in violation of the principle of free evaluation of evidence. This part of the ground of appeal is not accepted.

B. As to whether the exercise of voting rights by shareholders other than the Plaintiff and Nonparty 2 is unlawful

(1) As seen above, it is presumed that a shareholder registered as a shareholder in the register of shareholders is entitled to exercise voting rights at the general meeting of shareholders. Thus, barring special circumstances, a shareholder registered in the register of shareholders can legally exercise voting rights in relation to the company, barring special circumstances. Therefore, in order to recognize that a third party, not a shareholder registered in the register of shareholders, is not legally able to exercise voting rights in relation to the company, even if he/she is a shareholder registered in the register of shareholders, there is insufficient circumstance to deem that the third party, not a shareholder registered in the register of shareholders, has paid the subscription price for shares. In light of the internal relationship between the third party and the shareholder registered in the register of shareholders, the circumstance and purpose of registering the subscription price for shares and the contents of exercise of voting rights as a shareholder after the registration of the register of shareholders, a shareholder registered in the register of shareholders is merely lent only the name during the process of acquiring shares

(2) According to the reasoning of the judgment below, the representative director of the defendant company notified the plaintiff, the non-party 1, the non-party 2, the non-party 3, the non-party 4, the non-party 5, and the non-party 6 of the convening of the provisional shareholders' meeting on April 29, 2005, which were listed as shareholders on the shareholder's list as of April 14, 2005 after the resolution of the board of directors was passed. On April 29, 2005, the non-party 1 was decided to appoint the non-party 1 as directors upon the holding of the provisional shareholders' meeting. The above provisional shareholders' meeting was composed of the non-party 6,00 among the total shares issued by the defendant company's company's 38,00 shares, the non-party 2 was 6,40 shares, the non-party 3 was 5,100 shares, the non-party 1 was 7,900 shares, the non-party 6 and the non-party 2, the non-party 2.

(3) The lower court states that there is no dispute between the Plaintiff and the Defendant Company as to the fact that the shareholders on the remaining register of shareholders other than Nonparty 2 and the Plaintiff (hereinafter “shareholders on the register of shareholders”) are all shareholders in the form in which they are unable to exercise voting rights in relation to the company.

However, in light of the records, the statement on legal effect does not bind the court as a right confession (see, e.g., Supreme Court Decision 91Da31494, Feb. 14, 1992). In light of the records, the defendant company asserted that the defendant company has paid the subscription price for shares with the intention to acquire the shares listed in the name of shareholders on the remaining list of shareholders, but the remaining shareholders on the remaining list of shareholders are entitled to legally exercise voting rights from the non-party 2 in relation to the defendant company (see, e.g., the records, 34, 48, 400), and there is no dispute between the parties as to the fact that the shareholders on the remaining list of shareholders are shareholders in a simple form without such authority.

Therefore, in order to recognize that the exercise of voting rights by shareholders on the remaining list of shareholders who are presumed entitled to exercise voting rights in relation to the defendant company is not legitimate, it is insufficient to examine and determine whether the remaining shareholders on the remaining list of shareholders and the non-party 2, who paid the acquisition price of shares, have lent only the name in the process of acquiring shares, and are merely those in the form of not having been granted the right to exercise voting rights as shareholders in relation to the defendant company, in light of the internal relationship between the shareholders on the remaining list of shareholders and the non-party 2 who paid the acquisition price of shares, the circumstances and purpose of the remaining shareholders on the register of shareholders, and the details of exercise of voting rights as shareholders after the registration on the register of shareholders, etc.

(4) Nevertheless, without examining and determining the above circumstances, the lower court determined that: (a) on the premise that the rest of the shareholders on the shareholder registry of this case is a mere form shareholder; (b) on the premise that Nonparty 1, the Defendant’s representative director, was aware of the fact that the rest of shareholders on the shareholder registry, including himself, did not have paid the actual subscription price; and (c) even if it could easily prove such fact, the exercise of voting rights by the type shareholder stated on the shareholder registry was exceptionally illegal, such as allowing the exercise of voting rights by the shareholders on the remaining shareholder registry, without refusing to exercise voting rights by the shareholders on the shareholder registry; and (d) determined that the resolution of this case’s appointment of directors constituted a cause for revocation of the resolution of the general shareholder registry. In so determining, the lower court erred by misapprehending the legal doctrine on the exercise of voting rights by shareholders on the shareholder registry and the grounds for revocation of the resolution

3. Conclusion

Therefore, the judgment of the court below shall be reversed in entirety, and since there are sufficient grounds for the Supreme Court to directly decide on any amendment of the articles of incorporation and any resolution to appoint auditors, the judgment of the court of first instance as to this part shall be revoked and this part of the lawsuit shall be dismissed, and this part of the lawsuit shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)