The format of stock company was not legislated for the close corporation which is generally characterized by a limited number of shareholders, an active shareholder participation in management and the lack of a public market for the stock owned by the minority shareholders. The majority shareholders in close corporation can easily engage in illegal conduct or oppressive conduct. The common forms of oppressive conduct include the failure to declare dividends, removal of a minority shareholder from management and excessive compensation to the majority shareholders. When the close corporation is misused by the majority shareholders to engage in the shareholder oppression, the close corporation is plunged into confusion. Although the minority shareholders seek judicial relief for the oppressive conduct, the dispute between shareholders inflict lots of loss on the minority shareholders without mentioning a satisfactory settlement. However the minority shareholders in close corporation have no way to withdraw from the close corporation, since they have difficulty in finding the resale market for their stocks. This article will examine the present situation of the close corporation in Korea and the method to protect the minority shareholders. It will propose to expand appraisal right, to enlarge autonomy of the by-law, to approve the special meeting for the benefit of the minority shareholders on critical issues or to enforce the court order to purchase the stocks owned by the minority shareholders in order to provide protection for the minority shareholders in close corporation.

The format of stock company was not legislated for the close corporation which is generally characterized by a limited number of shareholders, an active shareholder participation in management and the lack of a public market for the stock owned by the minority shareholders. The majority shareholders in close corporation can easily engage in illegal conduct or oppressive conduct. The common forms of oppressive conduct include the failure to declare dividends, removal of a minority shareholder from management and excessive compensation to the majority shareholders. When the close corporation is misused by the majority shareholders to engage in the shareholder oppression, the close corporation is plunged into confusion. Although the minority shareholders seek judicial relief for the oppressive conduct, the dispute between shareholders inflict lots of loss on the minority shareholders without mentioning a satisfactory settlement. However the minority shareholders in close corporation have no way to withdraw from the close corporation, since they have difficulty in finding the resale market for their stocks. This article will examine the present situation of the close corporation in Korea and the method to protect the minority shareholders. It will propose to expand appraisal right, to enlarge autonomy of the by-law, to approve the special meeting for the benefit of the minority shareholders on critical issues or to enforce the court order to purchase the stocks owned by the minority shareholders in order to provide protection for the minority shareholders in close corporation.

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폐쇄적 주식회사, 다수파 주주, 소수파 주주, 주식매수 청구권, 정관, 주식매수 명령, 소수파 주주총회