Series Index
Part 1 | Attorney Hong Seung-kwon: “AI Arrives in the Legal Profession”
Part 2 | How Should Lawyers Use AI?
Part 3 | Dividing Roles Between AI and Lawyers
Part 4 | AI Legal Advice Isn’t Enough—Here’s Why Lawyers Still Matter
Part 5 | Attorney Hong Seung-kwon: Korea’s AI Law—KRW 30 Million Fine Threshold
Part 7 | You Can’t Remove a Co-CEO Just Because You Want To
By Hong Seung-kwon
Principal Attorney, PAN Law Firm (skh@law-pan.com)
Entering into a business venture with an acquaintance is common. When the venture takes the form of a corporation, it is equally common for the parties to serve as co-chief executive officers.
Just as personal conflicts may arise between business partners, disputes frequently emerge between co-CEOs who jointly manage a company.
When such a conflict occurs, the consequences can be serious. As a general rule, external acts representing the company must be undertaken jointly by the co-CEOs. If agreement is possible, the matter may be resolved internally. If not, one party may seek to remove the other. In practice, however, this is far more complicated than it appears.
The difficulty stems from procedural constraints. To register the dismissal of a representative director, a notarized copy of the shareholders’ meeting minutes must be submitted. Yet most notary offices refuse to notarize minutes containing a resolution to dismiss a representative director. The reason cited is the significant legal risk associated with notarizing documents that may later become the subject of corporate disputes.
In a recent matter, I personally contacted more than 30 notary offices. Approximately 25 refused outright, solely because the matter involved the dismissal of a representative director. Of the remaining five that indicated notarization might be possible, each imposed a condition: the corporate seal of the director to be dismissed had to be affixed to the minutes.
It is unrealistic to expect an individual facing dismissal to voluntarily affix his or her seal to a document confirming that removal. The condition is, for all practical purposes, impossible to satisfy.
Another point worth noting is that it is not legally settled whether all co-CEOs must affix their seals to the shareholders’ meeting minutes. The co-CEO structure requires joint action in representing the company, but whether signing or sealing meeting minutes constitutes an act of “corporate representation” remains open to debate.
Is there, then, an alternative to notarization?
In Korea, most corporations are small companies with capital of less than KRW 1 billion. Share ownership in such companies is typically concentrated among a small number of individuals.
Accordingly, the Commercial Act permits small corporations with capital under KRW 1 billion to replace a formal shareholders’ meeting with a unanimous written resolution of all shareholders. The purpose is procedural efficiency. In principle, the dismissal of a co-CEO may also be resolved through such written consent.
However, when registration is sought on the basis of a written resolution, the registry office typically issues a corrective order requiring submission of notarized shareholders’ meeting minutes. The basis for this practice is Registry Precedent No. 201809-3.
Under that precedent, in matters such as the dismissal of a representative director—where a management control dispute may arise—the registrar, who holds only formal review authority, cannot reliably determine from written resolutions alone whether all shareholders genuinely consented. As a result, registrars require an actual shareholders’ meeting and the submission of minutes certified by a notary.
One cannot entirely dismiss the registrar’s concerns. Nevertheless, the practical effect of this precedent is to mandate notarized shareholders’ meeting minutes for virtually all registrations involving the dismissal of a representative director.
The remaining option, therefore, is to petition the court to convene an extraordinary shareholders’ meeting. The meeting must then be held under a chairperson appointed by the court, and the dismissal resolution adopted accordingly. This process, however, requires considerable time.
Even where the will of all shareholders is clear, requiring several months of procedure before effecting dismissal is highly inefficient.
It would be difficult to attribute fault solely to any one party. Registrars possess only formal review authority, and notary offices cannot reasonably assume significant legal risk for modest fees. Yet the parties ultimately disadvantaged are shareholders seeking to exercise their legitimate rights.
It may be time to consider establishing a separate mechanism to verify the authenticity of unanimous written resolutions, or to discuss institutional safeguards addressing the practical consequences of widespread notarization refusals.
