A. Purport of Article 8 of the Enforcement Decree of the Small and Medium Enterprise Cooperatives Act and whether Article 8 (1) of the same Enforcement Decree violates the parent law (negative)

(b) Whether it is possible to establish an association with its administrative district, even where an existing association with its business district nationwide is located (affirmative with restriction);

A. Article 28 of the Small and Medium Enterprise Cooperatives Act provides that promoters of a cooperative shall submit to the competent authority a document stating the articles of association, business plan, names and addresses of executives, and other necessary matters without delay after the inaugural general meeting and obtain authorization for establishment. Thus, the competent authority ultimately holds the right of authorization for establishment of a cooperative. Thus, even if Article 8 of the Enforcement Decree of the Small and Medium Enterprise Cooperatives Act provides for the procedure for authorization for establishment of a cooperative and provides that the applicant who is recommended shall apply to the competent authority for authorization for establishment, it should be expected that the person who is recommended by the president of the Federation of Small and Medium Enterprise Cooperatives applies for authorization for establishment to the competent authority. If the president of the Federation did not notify the applicant of the recommendation three weeks after the date of recommendation or the president of the Federation rejected the recommendation unfairly due to erroneous interpretation of the Acts and subordinate statutes, the applicant may apply for authorization for establishment to the competent authority regardless of

B. According to Article 6 (1) of the same Act, a small and medium enterprise cooperative shall, in principle, operate its administrative area, but if there are special reasons, two or more administrative areas may be designated. According to Article 2 (1) of the Enforcement Decree of the same Act, the term "when special reasons exist" means when it is deemed impossible to achieve the purpose of the establishment of a cooperative in view of geographical conditions, distribution of union members and other characteristics of the operation of the cooperative in the event that a cooperative designates its administrative area according to the administrative area. Thus, even if a cooperative with a nationwide business area is established, if such special reasons cease to exist, it should be returned to the principle of Article 6 of the same Act, and a cooperative with an administrative

(a) Article 28 of the Small and Medium Enterprise Cooperatives Act, Article 8 of the Enforcement Decree of the same Act, Article 6(1) of the Small and Medium Enterprise Cooperatives Act, and Article 2(1) of the Enforcement Decree of

Jeollabuk-do synthetic resin industrial cooperatives

Governor of Jeollabuk-do

Gwangju High Court Decision 91Gu1560 delivered on July 3, 1992

The judgment below is reversed and the case is remanded to the Gwangju High Court.

We examine the grounds of appeal.

(1) According to the reasoning of the lower judgment, the lower court determined that the Plaintiff’s application for authorization of establishment of a cooperative under Article 3 subparag. 1 of the Act on Small and Medium Enterprise Cooperatives (hereinafter “the Small and Medium Enterprise Cooperatives Act”), among small and medium enterprise owners engaged in the synthetic resin industry in Jeollabuk-do, was made by completing the inaugural general meeting on May 17, 191 and completing its articles of association (the purpose of establishment is to promote the sound development of the synthetic resin industry, promote the promotion of welfare among the members of the Jeollabuk-do, promote independent economic activities of the members of the cooperative, improve economic status, promote the balanced development of the national economy, etc. by carrying out collaborative projects, and the Plaintiff’s membership qualification as a small and medium enterprise owner under Article 2 of the Framework Act on Small and Medium Enterprises, and the Plaintiff’s application for authorization of establishment of a cooperative under Article 28 subparag. 1 of the Act on Small and Medium Enterprise Cooperatives (hereinafter “the Small and Medium Enterprise Cooperatives Act”), which is unlawful by failing to comply with the Plaintiff’s request for authorization of the National Federation’s approval of the above rejection.

In other words, according to Article 6 (1) of the Cooperatives Act, cooperatives are administrative districts of Seoul Special Metropolitan City, Metropolitan City, and Do, but they are business districts of two or more administrative districts, the whole country, or specific areas determined by the Presidential Decree. In light of the fact that small and medium enterprises other than commerce can establish two or more cooperatives within one administrative district, other small and medium enterprises can not establish only one cooperative within the same business area. In addition, even if the defendant has the right to establish a cooperative as a competent authority under Article 28 of the Cooperatives Act, it is difficult to properly determine whether many small and medium enterprises in reality are in compliance with the purpose of the Cooperatives Act in organizing a cooperative. Accordingly, it is not appropriate for the competent authority to consider whether the requirements for authorization are met in accordance with the purpose of the Act on the Establishment of Cooperatives. Thus, it cannot be concluded that the provisions of Article 8 (1) of the Enforcement Decree of the Cooperatives Act which are specialized and comprehensively managed by the non-party Federation of Small and Medium Enterprise Cooperatives are against the mother Law, and the plaintiff's application for approval for the establishment of a cooperative cannot be regarded as an unlawful.

(2) In light of the provisions of the Enforcement Decree of the Cooperatives Act concerning the establishment of a cooperative, a person who intends to obtain authorization to establish a cooperative, a cooperative, an industrial cooperative, or a federation (hereinafter referred to as an “applicant”) shall apply for authorization to establish a cooperative to the president of the National Federation within three weeks after the end of the inaugural general meeting, attaching documents necessary for the establishment of the cooperative. Under Paragraph (2), the president of the National Federation shall determine whether to recommend a cooperative within three weeks, and notify the applicant of the result to the applicant, unless there is a compelling reason not to do so. Under Paragraph (3) of this Article, the applicant who is recommended under Paragraph (2) of this Article shall apply for authorization to establish a cooperative to the Minister of Trade, Industry and Energy or a Mayor/Do governor (hereinafter referred to as the “competent authority”). Paragraph (4) of this Article; Paragraph (3) of this Article, if he receives an application pursuant to Paragraph (3) of this Article, it shall be prescribed that the establishment is authorized after examining the contents thereof, and it may be interpreted only to the competent authority.

However, in Article 28 of the Cooperative Act, promoters of a cooperative shall submit to the competent authority a document stating the articles of association, business plan, names and addresses of officers and other necessary matters without delay after the inaugural general meeting and obtain authorization for the establishment of a cooperative. Since the competent authority ultimately holds the right to establish a cooperative, Article 8 of the Enforcement Decree of the Cooperative Act provides for the procedure for authorization for establishment of a cooperative and provides that an applicant who is recommended shall apply for authorization for establishment to the competent authority, even if Article 8 of the Enforcement Decree of the Union provides that the applicant who is recommended for authorization for establishment of a cooperative shall apply for authorization for establishment to the competent authority. If the president of the National Federation did not notify the applicant of the recommendation three weeks after the date of recommendation under Article 8(2) of the Enforcement Decree of the Union Act, or if the president of the National Federation rejected the recommendation unfairly due to erroneous interpretation of the Acts and subordinate statutes, the applicant may still apply for authorization for establishment

Therefore, the decision of the court below that the provision of Article 8 (1) of the Enforcement Decree of the Cooperatives Act cannot be judged to be in violation of the mother law is just and there is no reason to dispute this issue.

(3) However, Article 6 (1) of the Union Act provides that a cooperative of a person operating a commercial business may establish two or more cooperatives within one administrative district, but does not provide that a cooperative of the same type of business cannot be established within the same administrative district if it is located within two or more administrative districts (national or specific areas) permitted under the same provision.

As a matter of principle, a cooperative has its administrative district as its business area, and at least two administrative districts can be designated as its business area only when there are special reasons, and according to Article 2(1) of the Enforcement Decree of the cooperative Act, the term "when special reasons exist as referred to in Article 6(1) of the cooperative Act" means when it is deemed impossible to achieve the purpose of the establishment of the cooperative because the business area is regarded as geographical conditions, the distribution of union members and other characteristics of union operation when it is determined according to the administrative district. Thus, regarding the plaintiff's type of business, the court below should consider the reasons why the non-party Korea Plast Industrial Cooperative established with the whole country as its business area and the establishment of the cooperative is made. If such special reasons cease to exist at present, it seems that the plaintiff's application union should be established and authorized with the administrative district as to the plaintiff's type of

Nevertheless, the court below erred by interpreting Article 6 (1) of the Act on the Establishment of Small and Medium Enterprise Cooperatives only one cooperative cannot be established within one business area. The court below's decision that the defendant's rejection disposition of this case is legitimate only on the ground that the business area of the cooperative requested by the plaintiff overlaps with the business area of the non-party cooperative, without examining at all the point of view whether the whole business area of the plaintiff's business area is valid.

Therefore, the judgment of the court below shall be reversed and the case shall be remanded to the court below on the grounds of appeal for this issue. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-dong (Presiding Justice)