Hello. I am Attorney Oh Seung-hyun from the law firm Cheongchul.

As the regular annual general meeting season approaches, there are particularly common questions arising in family-owned businesses, startups, and single-shareholder corporations.

• “Isn’t it just a formality since we agreed amongst ourselves?”

• “Can’t we just prepare minutes on time because we need urgent investments/loans?”

• “Isn’t it enough to just stamp it?”

However, the 'decision-making process' and 'minutes' of shareholder meetings and board meetings are key documents that determine the survival of the company in disputes, tax matters, and investment situations, so they must not be handled carelessly.

The court does not remedy legal defects solely on the grounds of “it has always been done that way.” Today, in light of the upcoming AGM season, let’s take a look at the checklist that non-listed companies must ensure for their board and shareholder meetings.

I. Reasons Why “Writing Later” and “Backdating” Are Particularly Dangerous

(1) If the minutes are prepared without actually holding a meeting, the resolution may be deemed non-existent.

The court has recognized cases where minutes of shareholder meetings were falsely prepared without actual convening procedures or meetings as having “a severe defect to the extent that it cannot be said that a resolution exists” (Supreme Court ruling 91Da14369 on August 18, 1992).

Especially in companies where shares are actually dispersed (even in family-owned businesses where ownership is divided or where there is potential for future disputes), it is difficult to recognize the existence of a resolution based solely on the fact that “the majority shareholder agreed, so the resolution would have passed anyway” (Seoul Central District Court ruling 2024Gahap43346 on October 17, 2024, etc.).

(2) If the notice of convening is mostly omitted, the resolution may be deemed non-existent.

The omission of a notice of convening does not always lead to non-existence, but it has been established that if notices are not sent to all or most shareholders, the resolution may be judged as non-existent (Daegu District Court ruling 2024Gahap200735 on September 3, 2024, etc.).

(3) Falsifying minutes can be subject to ‘criminal punishment’.

The most concerning case in practice is when “there was no actual general meeting, but the minutes are created and used for registration or submission purposes.”

There is a case where someone was criminally punished for preparing false minutes of a shareholder meeting and proceeding to register based on them for making a false statement in a public document and for exercising that statement (Busan District Court ruling 2019Gahap51112 on May 12, 2021, etc.). Ultimately, the choice of “let’s write it later” leads to not only civil law ineffectiveness but also criminal liability and a **risk of investment failure (DD points)** creating a triple risk.

II. Shareholders Meeting: If Procedures Are Violated, It Will Lead to “Lawsuits”

(1) The board of directors shall convene as a principle

The convening of a shareholders meeting is usually determined by the ​board of directors​ (Commercial Act Section 362).

(2) Notice of convening period: 2 weeks as a principle (however, special provisions apply for capital less than 1 billion won, Commercial Act Section 363)

• Principle: You must notify the meeting purpose in writing at least 2 weeks before the date of the meeting.

• Special provisions for small companies (capital less than 1 billion won): You can notify 10 days before the meeting, and if all shareholders agree, you can either hold the meeting without convening procedures or replace it with a written resolution.

※ Note: To replace it with a written resolution, there must be evidence that **‘all shareholders have agreed in writing’** on the ‘matters to be resolved’.

(3) Requirements for the minutes: Whether the chairman and attending directors have signed/stamped is key.

The minutes of the shareholders’ meeting must include the ​procedures of the meeting and its results​, and the ​chairman and attending directors must sign or affix their seal​ (Commercial Act Section 373, Para. 2).

III. Board of Directors: Convening, Quorum, and Minutes Must Be Prepared and Operated According to Procedure.

(1) Notice of board meeting: Generally 1 week in advance.

The board of directors must usually notify each director and auditor 1 week before the meeting ​(Commercial Act Section 390, Para. 3). However, if all directors agree, the notice procedure may be omitted ​(Commercial Act Section 390, Para. 4).

(2) Minutes of the board meeting: Signature/stamping of attending directors and auditors is mandatory.

The minutes of board meetings must include the signature or seal of attending directors and auditors (Commercial Act Section 391, Para. 3). Although lower court precedents indicate that simply missing a signature does not immediately invalidate them (Busan District Court ruling 2018Gahap1325 on April 25, 2019), it is safer to adhere to the principle to prevent disputes.

(3) Board resolutions can also be a subject of disputes.

Unlike shareholder meetings, there is no such system as “lawsuit to annul board resolutions,” but in cases of disputes, they can escalate into lawsuits to confirm invalidity/non-existence or stay petitions against executives, so initial document organization is very important.

IV. Practical Checklist Risks

(1) Before the Meeting (Preliminary)

• Check the articles of incorporation: convenor, notice method, resolution requirements (ordinary/special), electronic voting, etc.

• Update the shareholder registry: Verify the shareholders as of the cut-off date.

• Send the notice of convening (Commercial Act Section 363, the board is Section 390): Keep records (evidence) after sending registered mail or emailing with shareholder consent.

(2) On the Day of Holding (Proceeding)

• Select a chairman and take notes on the progress of the discussion.

• Collect and organize the attendance register/proxies.

• Clearly tally votes (based on number of shares) during voting.

(3) After the Meeting (Post-Proceedings)

• Immediately prepare the minutes.

• Shareholders' meeting: Signature/stamp from the chairman and attending directors (Commercial Act Section 373, Para. 2).

• Board: Signature/stamp from attending directors and auditors (Commercial Act Section 391, Para. 3).

• Submit for registration: If it is a matter of registration, proceed without delay (check if notarization of the minutes is necessary).

• In the case of a written resolution: All shareholders must have a written consent document.

V. Conclusion

The organization of meeting minutes for non-listed companies is not merely a matter of “paperwork”; it is about building the foundational strength for governance, tax matters, and attracting investments. Especially if shares are slightly dispersed in a family business, even minor procedural defects can become a decisive spark for future management disputes.

The law firm Cheongchul offers standardized operations for the annual general meetings and board meetings of non-listed companies that satisfy the Commercial Act, articles of incorporation, and practical practices. If you are facing difficulties in preparing for the upcoming general meeting, please feel free to reach out to us for one-stop support, including notarization, registration, and dispute prevention solutions.