Joint Stock Corporation (Corporation) and Limited Liability Company (LLC)
Corporation and LLC are two common types of a company in Korea as both can benefit a corporate shield.
Most of the companies have a form of corporation (although LLC is the most common form in many other countries including USA) but, recently, many companies have been established in a form of LLC.
The following table compares key features of Corporation and LLC under the Korean law.
| Corporation | LLC |
| Investigation report requirement at the time of incorporation | Required | No |
| Public Offering | Available | Not available |
| Director | Three or more
(but one or two in case the total capital is less than KRW 1billion) | One or more |
| BOD | Required
(but in case of sole director, not applicable) | Not required |
| Auditor | Required
(but optional in case the total capital is less than KRW 1billion) | Optional |
Capital increase
| Through resoluion of BOD | Through resolution of a meeting of members |
| Bond issue | Available | Not available |
| Voting right | 1 voting right per share | 1 voting right per unit of investment (interest)
|
As you can see, it is easier for initial investors (incorporators) to set up an LLC because of simple fewer formalities compared to a corporation. And LLC can be an option for restricting the transfer of the share because such transfer is required a consent of other members of LLC.
However, to attract investors, a corporation is suitable because most of investors request shares (bond, or other benefits which a corporation may provide) in consideration of their investment. And only a corporation can be listed.
With Whale & Dale and our partner Law Firm and financial / tax experts, you can design the best business structure for your business.
