2011년 개정 상법이 배당 실무에 미친 영향

The Amended Korean Commercial Code which took effect in 2012 has adopted various new mechanisms with regards to corporate distributions. This article explores the impacts of the new legislations on Korean corporations and reviews a number of issues and controversies that have arisen in implementing the newly adopted distribution system. ① Before the new legislation, the Korean Commercial Code required corporations to prepare additional financial statements based on its unique accounting provisions that were different from applicable accounting principles such as GAAP or IFRS. Such financial statements were required to be used in calculating distributable profit. Now that such independent accounting provisions are abolished, corporations are required to prepare only one kind of financial statements based on applicable accounting principles and use it in the calculation of distributable profit. However, the Korean Commercial Code also changed the calculation formula of distributable profit in order to prohibit distribution of unrealized income to shareholders. In practice, despite such change, many Korean companies deem the ‘unappropriated retained earnings’ account in the balance sheet as distributable profit, without independently calculating distributable profit based on the new law. Such practice may lead to excessive dividends as unappropriated retained earnings are likely to be overestimated compared to distributable profit. ② Under the new act, the board of directors is entitled to decide corporate distributions without the shareholders meeting’s approval. Many companies now decide their dividend amount by a resolution of the board. This new system may prevent shareholders from making their own proposal on corporate distributions at the shareholders meeting as shareholders’ approval is no longer required. ③ In-kind distribution is now allowed, but the evaluation of distributed assets is an important issue since under-evaluation may disadvantage creditors or minority shareholders. Although the new act allows companies to distribute assets only to shareholders exceeding a certain threshold if other shareholders are paid with equivalent cash per share, in-kind distribution does not seem to be widely used due to the difficulties of evaluation and risks of challenges by minority shareholders who are not provided with such assets. ④ Since the enforcement of the new act, mandatory corporate reserve exceeding 150% of the capital amount may be converted into distributable profit. In practice there are controversies and uncertainties on the timing of calculation of the excess capital and whether distribution of profit is permissible immediately after such conversion under the amended Commercial Code.