Promulgation and Scheduled Effectiveness of the Amended Commercial Code

As explained in our previous newsletter (Link), proposed amendments to the Korean Commercial Code (the “Amended KCC”), which, among other things, expand the fiduciary duties of directors to include protection of shareholders’ interests, were passed at the plenary session of the National Assembly on July 3, 2025 and approved by the State Council on July 15. Subsequently, on the morning of July 22, 2025, the Amended KCC was promulgated in the official gazette and became effective shortly thereafter.

The table below shows the dates on which the relevant provisions of the Amended KCC will go into effect, and transitional measures for the implementation of such provisions:

Amended Articles	Amended Provisions	Enforcement Dates
Article 382-3(1) and (2)	Expansion of the fiduciary duties of directors to protect shareholders’ interests	July 22, 2025
Article 400(2)	Adoption of a system of independent directors (i.e., change of the term “outside directors” to “independent directors,” along with strengthened requirements for independence of boards of directors) Adoption of a new requirement that listed companies in general ensure independent directors comprise no less than one third of the total number of directors (for large listed companies, the requirement to appoint a majority of independent directors applies the same as before the amendment)	July 23, 2026* *Transitional measures for the system of independent directors: At the time of enforcement of the Amended KCC, outside directors under Article 542-8 of the pre-amended KCC will be deemed independent directors under the revised provisions of Article 542-8 of the Amended KCC. However, a listed company must satisfy the requirements under the revised provisions of Article 542-8(1) of the Amended KCC within one year from the effective date of the Amended KCC
Article 542-4(3)
Article 542-8(1) through (5)
Article 542-11(2) through (4)
Article 635(3)
Article 542-12(4)	Expansion of application of the 3% rule (i.e., the rule under the pre-amended KCC which aggregates and limits the voting rights of the largest shareholder and related parties to 3% in the appointment of statutory auditors and members of the audit committee who are not outside directors) to audit committee members who are outside directors
Article 364	Allowance of listed companies in general, and imposition of obligation on large listed companies, to hold general meetings of shareholders virtually	January 1, 2027
Article 368
Articles 542-14 through 542-15 (Newly Inserted)

The Amended KCC may have a significant impact on the ways boards of listed companies operate and general meetings of shareholders are conducted. Therefore, companies and other market participants should pay close attention to the Amended KCC and the scheduled effective dates of the revised provisions thereof. It is also necessary to keep a close eye on any further amendments to the Enforcement Decree of the Amended KCC with respect to the system of independent directors and the requirement to hold general meetings of shareholders virtually.

[Korean Version]

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