Effect of transfer of shares before issuance of share certificates

Even if share certificates have not been issued, if six months have passed after its incorporation, the company may claim the validity of the transfer of shares to the company, and since the transfer of shares before the issuance of share certificates is established only by the declaration of intention between the parties in accordance with the general principle of the transfer of designated shares, the transfer of shares is not effective on the ground that the procedure for the transfer of registered shares

Article 335 (2) of the Commercial Act

Supreme Court Decision 87Nu481 decided Oct. 11, 1988 (Gong1988, 1414) decided Aug. 13, 1991 (Dong)

Plaintiff

[Judgment of the court below]

Seoul High Court Decision 89Na11000 delivered on April 2, 1991

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

The judgment of the court below, based on the facts acknowledged based on the evidence, is based on the facts in its reasoning, and the defendant company acquired to carry out a partnership agreement between the non-party 1 and the non-party 2, and in light of the contents of the partnership agreement and the status of stock ownership, etc., the shares of the above company held by them are expressed their shares in the company. However, the judgment of the court below is just in light of the records, and there is no violation of the rules of evidence against the rules of evidence as pointed out.

The arguments on this issue are different, or they return to the fact-finding and the preparation of evidence, which are the exclusive authority of the court below.

Even if share certificates are not issued, if six months have passed after its incorporation, the company may claim the validity of the transfer of shares to the company, and since the transfer of shares before the issuance of share certificates is established only by the declaration of intention between the parties in accordance with the general principle of the transfer of designated shares, the transfer of shares shall not be effective on the ground that it did not follow the procedure of transfer of registered shares (see Supreme Court Decision 87Nu481, Oct. 11, 198).

Therefore, the court below held to the same purport that once the transfer of shares was made six months after the incorporation of the defendant company, the plaintiff who finally acquired the shares of this case can assert that the above transfer of shares was made lawfully (in accordance with the evidence in the original instance, it is recognized that the defendant company was aware of the above transfer of shares). Since the plaintiff is a shareholder holding 25,210 shares out of 50,00 shares of the defendant company, the plaintiff and the above non-party 3 and the non-party 4, who are shareholders, were held without the notice of convening a general meeting of shareholders. Thus, the provisional general meeting and the board of directors of this case held without the notice of convening a general meeting of shareholders of this case, all of the plaintiff and the above non-party 3 and the non-party 4, who are shareholders, were found to have a significant defect in the process of its establishment, and

Therefore, the appeal is 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.

Justices Kim Yong-ju (Presiding Justice)