The judgment of the court below is reversed, and the case is remanded to the Gwangju District Court Panel Division.

The grounds of appeal are examined.

1. A person who prepares for business prior to the commencement of a commercial activity which is the subject of business is to realize an intention to engage in a commercial activity. As such, he/she is qualified as a merchant at the time of such preparation, and as well as his/her first auxiliary commercial activity, is an act for business purposes;

If the other party can objectively recognize the intention of the preparation, such as the purchase of a store and the employment of a trade employee, etc., the preparation act is an auxiliary commercial activity, and the provisions of the Commercial Act governing commercial activities are applicable thereto (see, e.g., Supreme Court Decision 98Da1584, Jan. 29, 199). Furthermore, the act of borrowing business funds cannot be deemed as an act of preparing commercial activities which is an object of business, in view of the nature of the act itself. However, in a case where the subjective intent of the actor is the preparation act for business and the other party recognizes that the act is a preparation act for business based on the explanation of the actor, etc., the provisions of the Commercial Act concerning commercial activities are applicable (see, e.g., Supreme Court Decision 2011Da104246, Apr. 13, 2012). Meanwhile, in full view of the contents and legislative intent of Articles 440 and 165 of the Civil Act, the extinctive prescription period has been extended to ten years.

Even if it is so, the application of short-term extinctive prescription is excluded from the guarantee liability, and the ten-year extinctive prescription period is not applied, and the period of the joint and several surety obligation is still in accordance with the previous extinctive prescription period.

(2) On August 24, 2006, the court below held that the principal debtor B, who operated a singing room at the time of the instant lending, is required to raise funds for facility investment in order to change the type of business directly into standards.