[1] Whether it is legitimate for a representative director to exercise his/her power of representation without delegation or consent of one shareholder where the representative director's power of representation is substantially restricted by one shareholder who is a substantial operator of the company (affirmative)

[2] In a case where the representative director of a corporation already appointed the representative director prior to his/her resignation as the representative director without specific delegation or consent of the shareholder, who is the actual operator, and prepares a document under the name of the company, the case denying the establishment of the crime of forging documents

[1] The representative director's power of representation can be lawfully restricted by the articles of incorporation, the general meeting of shareholders, or the resolution of the board of directors. However, it cannot be said that the representative director has lawfully restricted the representative director's power of representation merely because a shareholder who actually has neglected the management of the company actually restricted the exercise of his/her power. Thus, the representative director's power of representation does not constitute an act beyond his/her power of representation merely because he/she did not obtain delegation or consent from the shareholder.

[2] In a case where the representative director of a stock company has already indicated the representative director prior to his/her resignation as the representative director without specific delegation or consent of the shareholder who is the actual operator, and has prepared a document in the name of the company, the case denying the establishment of document forgery

[1] Articles 231 and 232 of the Criminal Act / [2] Article 231 of the Criminal Act

Defendant

Prosecutor

Ulsan District Court Decision 2006No368 decided Dec. 1, 2006

The appeal is dismissed.

The grounds of appeal are examined.

Since the representative director of a corporation is not an individual representative director, the person to whom the intent or concept expressed in a document prepared in the manner that indicates his/her representative qualification belongs, the nominal owner of the document shall be deemed a stock company. Therefore, whether the act of preparing the document constitutes the above Article shall be determined depending on whether the preparing person has the authority to lawfully prepare the document in the name of the stock company, and it shall not be determined in accordance with whether the document was delegated or accepted by the person who is indicated as the representative director (see Supreme Court Decision 74Do1684, Sept. 23, 1975, etc.).

Inasmuch as a legitimate representative director of a corporation has the authority to do all judicial or extra-judicial acts with respect to the business of the corporation, he/she is in principle not to fall under the preparation of qualification documents or the above Article. This also applies in cases where the content of the document was made for the purpose of promoting his/her own or a third party’s interest by false or abusing his/her power of representation against the truth (see, e.g., Supreme Court Decisions 79Do3034, Apr. 22, 1980; 83Do2257, Oct. 25, 1983). The representative director’s power of representation can be lawfully restricted by the articles of incorporation, the general meeting of shareholders, or the board of directors, etc., but the mere fact that a single shareholder who has practically neglected and controlled the operation of the corporation actually restricts the exercise of the power of the legitimate representative director’s representative director’s power, such act does not constitute a legitimate restriction on the representative director’s power of representation.

In the same purport, the decision of the court below is just in holding that the act of the defendant, who was appointed as a legitimate representative director of Pyeongtaek-si Co., Ltd., by indicating the name of the above company as "non-indicted 1" and preparing the document under the name of the above company, even though Non-indicted 1 is already the representative director prior to his resignation or part of the document was false contrary to the truth, and even if he did not obtain specific delegation or consent of the non-indicted 2, a shareholder who was actually malicious and controlled in the operation of the above company, the act of forgery does not constitute an act of forgery. There is no violation of the law regarding the misapprehension of legal principles as to the concept of forgery or the preparation or evaluation of evidence

Therefore, the prosecutor's appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Young-ran (Presiding Justice)