SMEs "Regret Over National Assembly's Passage of Commercial Act Amendment... Government Requests Reconsideration"

"SMEs With Limited Legal Teams Are More Vulnerable"
"Concerns Over Increased Management Uncertainty"

The small and medium-sized enterprise (SME) sector has expressed strong concerns about the amendment to the Commercial Act passed by the National Assembly.

The Korea Federation of SMEs issued a statement on the 13th, saying, "Currently, the Korean economy faces a bleak outlook due to a complex internal and external crisis," and added, "At times like this, it is crucial for companies to make decisions quickly and efficiently, but this amendment is likely to increase uncertainty in management."

On the 13th, the partial amendment to the Commercial Act was passed at the plenary session of the National Assembly. The amendment expands the duty of directors from the existing "company" to "company and shareholders" and includes provisions mandating the introduction of electronic general meetings of shareholders for listed companies. March 13, 2025 Photo by Kim Hyun-min

The Federation emphasized, "Especially for SMEs that lack dedicated legal teams and personnel, there is a high risk of being defenselessly exposed to management interference from global institutions and funds," and warned, "As a result, resources for overcoming crises and growth may be diverted to defending management rights, leading to weakened corporate competitiveness."

While the industry agrees on the necessity of protecting minority shareholders, it expressed concerns that the side effects of this Commercial Act amendment could outweigh the expected benefits.

The Federation of SMEs stated, "We request the acting president to reconsider the Commercial Act amendment passed today, and urge the National Assembly, government, and economic sectors to cooperate in creating a forum for more in-depth discussions."

It added, "The SME sector will also do its best to overcome the current crisis through revitalizing domestic demand and sustainable growth, and to protect the national economy and jobs."