KCCI "Regret over National Assembly's Passage of Commercial Act Amendment... Government Should Exercise Reconsideration Request Right"

"Does Not Meet Global Standards"
"Causes Confusion Across All Aspects of Corporate Management"

The Korea Employers Federation (KEF) expressed deep regret on the 13th over the passage of the 'Commercial Act Amendment' through the National Assembly.

On the 13th, the partial amendment to the Commercial Act was passed at the plenary session of the National Assembly. 2025.3.13 Photo by Kim Hyun-min

In a statement released that day, KEF said, "Despite the earnest appeals from the business community, the Commercial Act Amendment passed the plenary session of the National Assembly," adding, "It is highly concerning as it is likely to cause confusion in the overall management activities not only of large corporations struggling in global competition but also of small and medium-sized enterprises that are vulnerable in litigation response."

In particular, KEF pointed out, "It is difficult to find legislative examples in major overseas countries that directly stipulate shareholders as the subjects of directors' fiduciary duties," and noted, "This bill does not conform to global standards."

The Commercial Act Amendment expands the scope of directors' fiduciary duties from 'the company' to 'the company and shareholders' and mandates the introduction of electronic shareholder meetings for listed companies. It is justified on the grounds of improving governance and protecting minority shareholders' rights. The law will be enforced one year after its promulgation.

The business community has repeatedly raised concerns that the bill could hinder corporate investment and innovation and weaken national competitiveness.

KEF stated, "Rather than regulating all companies under a comprehensive provision in the Commercial Act, more rational and effective alternatives should be prepared through the Capital Markets Act," and strongly requested, "We urge the government to exercise its right to request reconsideration of the Commercial Act Amendment."