The judgment below is reversed, and the case is remanded to the Seoul Central District Court.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 2 and 3

A. The term “business” under Article 42(1) of the Commercial Act refers to a functional property as an organic integration organized for a given business purpose, and the term “functional property as an organic integration” refers to a functional property as an organic combination of tangible and intangible property constituting a business and facts with economic value, which function as a source of profit, and the source of profit, which is an organic combination of these facts, serves as the source of profit, shall be the object of transaction, such as one goods.

Therefore, the issue of whether a transfer of business can be seen as a transfer of functional property as the source of revenue organized by the transferee should be determined depending on whether the transferee continues to engage in the same business activity as the transferor had performed.

(2) Article 42(1) of the Commercial Act provides that “Where an obligee’s business credit to an obligor is substantially secured by the obligor’s business property, and an obligee’s business credit is excluded from succession to an obligation while the obligor’s business credit is actually secured by the obligor’s business property, the obligee’s business credit is separated from the obligee’s business property, thereby causing injury to the obligee.” Thus, in order to protect the obligee, it is difficult to ascertain the fact that the transferor’s business credit continues to use the transferor’s trade name in order to use the transferor’s trade name and make it difficult for the obligee to ascertain the fact that the transferor’s business transfer or succession to an obligation does not take place, and thus, it shall be held liable to the assignee who caused the transferor’s obligee to lose the opportunity to enforce the obligation of the

(see, e.g., Supreme Court Decisions 88Meu10128, Dec. 26, 1989; 2010Da35138, Sept. 30, 2010). However, in cases of a business lease, Article 42(1) of the Commercial Act is the same.