[1] The meaning of "business affairs" of a company under Article 408 (1) of the Commercial Act, and whether the representative director's act of acting director constitutes a reason for revocation of a resolution where a general general meeting of shareholders including items that may affect the management and control of the company is convened without permission of the court (affirmative)

[2] Where an amendment of the articles of incorporation is made upon a special resolution of the general meeting of shareholders, whether the amendment of the articles of incorporation takes effect regardless of the registration of the amendment or authentication of the notary public

[1] The "general affairs" of Article 408 (1) of the Commercial Code refers to affairs that must be conducted daily in the company, affairs that are ordinarily within the ordinary business scope in the company's continuing to conduct its business, or ordinary business affairs that do not significantly affect the company's management. Whether certain acts belong to the regular business affairs should be objectively determined in light of the organization, type and nature of the company in question, and other circumstances. If an acting director's convening a general shareholders' meeting includes acts that affect the company's management and control, such as changing the composition of the board of directors itself or acts that fall under the special resolution of Article 374 of the Commercial Code, the convening of the general shareholders' meeting does not belong to the regular business affairs. If the acting director convened a general shareholders' meeting without permission of the court, it constitutes grounds for cancellation of the resolution due to defects in the convocation procedure.

[2] Although the original correction officer of a corporation takes effect upon the authentication by a notary public, if the articles of incorporation are amended in its effective manner, the articles of incorporation shall take effect at the time when a special resolution of the general meeting of shareholders exists, and whether the articles of incorporation has been amended or the contents of the amendment are registered at the time of registration or the authentication of a notary public does not affect the effect of

[1] Articles 376(1), 407(1), and 408(1) of the Commercial Act / [2] Articles 292, 433, and 444 of the Commercial Act

[1] Supreme Court Decision 91Da4355 delivered on December 24, 1991 (Gong1992, 664) / [2] Supreme Court Decision 78Nu167 delivered on December 26, 197 (Gong1979, 11651)

Plaintiff

Defendant corporation

Seoul High Court Decision 2005Na101842 decided August 23, 2006

All appeals are dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. As to the Defendant’s ground of appeal

According to Article 407(1) of the Commercial Act, where an action for nullifying or revoking a resolution of appointing a director or for removing a director is brought, the court may, upon the application of the parties concerned, suspend the performance of duties of the director by provisional disposition and appoint an acting director accordingly. In such a case, Article 408(1) of the Commercial Act provides that an acting director shall not engage in any act that does not belong to the ordinary director of the company unless otherwise stipulated in the provisional disposition order, but the same shall not apply to the case where permission is granted by the court. Here, the term "ordinary director of the company" means affairs that must be done normally in the company, affairs that the company normally performs within the ordinary business scope in continuing its business, or ordinary affairs that do not have an important influence on the company's management, and it shall be objectively determined in light of the organization, type and nature of the company in question, and other circumstances. If an acting director is in accordance with such legal principles, the act of changing the composition of the board of directors itself or the act that falls under a special resolution under Article 374 of the Commercial Act is not included in the convocation procedure.

After compiling the evidence adopted in the judgment, the court below acknowledged the facts as stated in its holding, in principle, it should be deemed that the convening of the general shareholders' meeting itself belongs to the ordinary business affairs of the representative director. However, in the case where litigation as to the validity of the resolution of the general shareholders' meeting of this case is under way, the court below held that the convening of the general shareholders' meeting of this case is not an act of belonging to the general business affairs of the company, and there is no error in the misapprehension of the legal principles as to the cancellation of the resolution of the general shareholders' meeting of this case's Disposition No. 2 and No. 6 since there is no evidence that the defendant's representative director's convening of the general shareholders' meeting of this case's representative director's meeting of this case's holding that the approval of dismissal of the representative director and directors, the approval of the sale of the general shareholders' meeting of this case's important property which is the basis of the defendant's existence, and the approval of the remaining resolution of the general shareholders' meeting of this case's revocation of authority as well as the defendant's resolution of this case's revocation.

In addition, as seen earlier, as long as the resolution on the agenda of No. 2 through 4 is revoked among the resolution of the general meeting of shareholders of this case, the resolution of the general meeting of shareholders of this case was legally ratified on the premise that the resolution on the agenda of No. 2 through 4 is valid, and therefore, the ground of appeal purporting to the effect that this part of the lawsuit is unlawful is without merit.

2. Plaintiff’s ground of appeal

A. Whether the amendment of the articles of incorporation concerning the quorum of the general meeting of shareholders is made

Although the original correction officer of a corporation takes effect upon obtaining authentication from a notary public, if the articles of incorporation are amended to be effective, the articles of incorporation shall take effect at the time when a special resolution of the general meeting of shareholders is made, and whether the articles of incorporation is completed or the contents of the amendment are registered at the time of registration or the authentication of a notary public does not take effect (see Supreme Court Decision 78Nu167 delivered on December 26, 1978).

In full view of the evidence presented in the judgment of the court below, the decision of the general meeting of shareholders at the time of establishment of the defendant was stipulated in the articles of incorporation that the majority of the voting rights of the shareholders present and the number of 2/3 or more of the total number of issued and outstanding shares shall be 2/3 or more (Article 19) except as otherwise provided in the Acts and subordinate statutes or the articles of incorporation (Article 19), but it was just that after December 8, 200, the decision was modified by a majority of the

B. As to the title truster of the Defendant’s shares under Nonparty 2

On December 30, 2004, the court below decided that the non-party 1 asserted that the shares of the non-party 2 were owned by the defendant and applied for the change of shareholder name, and accordingly acknowledged that the name of the non-party 2 was changed from the non-party 1 to the non-party 1. After considering the evidence presented by the court below, the non-party 1's 16,00 shares issued by the non-party 2 as the plaintiff's shares owned by the non-party 7 is insufficient to recognize that the non-party 16,00 shares issued by the non-party 2 were owned by the plaintiff, and there is no other evidence

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)