AGRICULTURAL COOPERATIVE ACT

Article 1(Purpose) #

The purpose of this Act is to improve the economic, social, and cultural status of farmers based on the independent cooperative organization of farmers, enhance the quality of life of farmers by strengthening the competitiveness of agriculture, and contribute to the balanced development of the national economy.

[This Article Wholly Amended on Jun. 9, 2009]

Article 2(Definitions) #

The terms used in this Act are defined as follows: <Amended on Mar. 10, 2026>

1. The term "cooperative" means a local cooperative or an item cooperative;

2. The term "local cooperative" means a local agricultural cooperative or a local livestock cooperative established under this Act;

3. The term "item cooperative" means a cooperative by item or by business type established under this Act;

3-2. The term "urban cooperative" means a cooperative established under this Act that has its principal office in the Special Metropolitan City, a Metropolitan City, a Special Self-Governing City, or a city with a population of 300,000 or more and that satisfies the criteria prescribed by Presidential Decree;

4. The term "National Federation" means the National Agricultural Cooperatives Federation established under this Act.

[This Article Wholly Amended on Jun. 9, 2009]

Article 3(Name) #

(1) A local cooperative shall use the name of an agricultural cooperative or a livestock cooperative indicating the name of the region or the characteristics of the region; an item cooperative shall use the name of the cooperative indicating the name of the region, item, or business type; and the National Federation shall use the name of the National Agricultural Cooperatives Federation.

(2) Any person other than a cooperative or the National Federation established under this Act shall use the name under paragraph (1) or any other name similar thereto; provided, any of the following corporations may use such name where approval is obtained as prescribed by the articles of association of a cooperative or those of the National Federation: <Amended on Mar. 31, 2011>

1. A corporation invested or contributed by a cooperative or the National Federation;

2. Other corporations deemed necessary by the National Federation.

[This Article Wholly Amended on Jun. 9, 2009]

Article 4(Legal personality) #

(1) A cooperative and the National Federation established under this Act shall be respectively a corporation.

(2) The addresses of a cooperative and the National Federation shall be the seat of its principal office.

[This Article Wholly Amended on Jun. 9, 2009]

Article 5(Best-interest principle) #

(1) A cooperative and the National Federation shall serve its members' interests to the fullest extent, in the conduct of its business. <Amended on Dec. 27, 2016>

(2) A cooperative and the National Federation shall not engage in business affairs that favor some of its members.

(3) A cooperative and the National Federation shall not engage in business affairs for profit-making or speculative purposes contrary to the purpose of establishment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 6 #

Deleted. <Dec. 27, 2016>

Article 7(No involvement in public elections) #

(1) Cooperatives, joint business corporations of cooperativess under Article 112-3, the federation of item cooperatives under Article 138 (hereinafter referred to as "cooperatives, etc.") and the National Federation shall neither support a specific political party nor engage in any conduct that causes a specific person to be elected or not to be elected for public office.

(2) No person shall engage in any conduct referred to in paragraph (1) by taking advantage of cooperatives, etc. or the National Federation.

[This Article Wholly Amended on Jun. 9, 2009]

Article 8(Exemption from surcharges) #

Business affairs and property of cooperatives, etc., the National Federation, the NongHyup Agribusiness Group, the NongHyup Financial Group, the NongHyup Bank, the NongHyup Life Insurance Co., Ltd., and the NongHyup Property & Casualty Insurance Co., Ltd. established under this Act (hereinafter referred to as "NongHyup Agribusiness Group, etc.") shall be exempt from surcharges, other than taxes imposed by the State and local governments. <Amended on Mar. 31, 2011>

[This Article Wholly Amended on Jun. 9, 2009]

Article 9(Cooperation with State and public organizations) #

(1) The State and public organizations shall not infringe on the autonomy of cooperatives, etc. and the National Federation.

(2) The State and public organizations shall actively cooperate with cooperatives, etc. and the National Federation in their business. In such cases, the State or public organizations may provide subsidies or loans to cover necessary expenses.

(3) The Chairperson of the National Federation (hereinafter referred to as the "Chairperson") may present his or her opinions to the State and public organizations on matters necessary for the development of cooperatives, etc. and the National Federation. In such cases, the State and public organizations shall exert utmost efforts to reflect their opinions. <Amended on Mar. 31, 2011>

[This Article Wholly Amended on Jun. 9, 2009]

Article 10(Cooperation with other cooperatives) #

(1) Cooperatives, etc., the National Federation, the NongHyup Agribusiness Group under Article 161-2 (hereinafter referred to as the "NongHyup Agribusiness Group"), and its subsidiaries shall strive for mutual cooperation, better understanding, and joint business development with other cooperatives, joint business corporations of cooperatives under Article 112-3, the federation of item cooperatives under Article 138, cooperatives under other statutes, and cooperatives in foreign countries. <Amended on Dec. 27, 2016>

(2) Urban cooperatives shall endeavor to promote the win-win development of urban and rural areas, expand mutual exchanges, and revitalize joint projects among cooperatives. <Added on Mar. 10, 2026>

[This Article Wholly Amended on Jun. 9, 2009]

Article 11 #

Deleted. <Mar. 31, 2011>

Article 12(Exclusion from, and mutatis mutandis application of, other statutes) #

(1) Article 19 of the Grain Management Act, Articles 4, 8, and 81 of the Passenger Transport Service Act, Article 56 of the Trucking Transport Business Act, and Article 9 of the Licensed Real Estate Agents Act shall not apply to the businesses of cooperatives and the National Federation. <Amended on Mar. 31, 2011; Dec. 27, 2016>

(2) Article 19 of the Grain Management Act and Article 56 of the Trucking Transport Business Act shall not apply to the businesses of joint business corporations of cooperatives under Article 112-3 and the federation of item cooperatives under Article 138.

(3) Article 10 of the Petroleum and Alternative Fuel Business Act shall not apply where the National Federation supplies cooperatives with petroleum for agricultural use, which is eligible for tax exemption or reduction under Article 106-2 of the Restriction of Special Taxation Act.

(4) Articles 155 through 168 of the Commercial Act shall apply mutatis mutandis to the storage business of a cooperative. <Added on Mar. 31, 2011>

(5) Article 25(1) of the Monopoly Regulation and Fair Trade Act shall not apply to the NongHyup Financial Group under Article 161-10 (hereinafter referred to as "NongHyup Financial Group") and its subsidiaries (including cases where it controls other companies by vertically investing in a second-tier subsidiary, a third-tier subsidiary, or other lower-tier subsidiaries; hereafter the same shall apply in this Article); provided, this shall not apply where it holds stocks of an affiliate of the National Federation, other than the NongHyup Financial Group and its subsidiaries. <Amended on Oct. 31, 2017; Dec. 29, 2020>

(6) Article 26 of the Monopoly Regulation and Fair Trade Act shall not apply to the NongHyup Financial Group and its subsidiaries. <Added on Dec. 11, 2012; Dec. 29, 2020>

(7) Where an affiliate of the National Federation is subject to restrictions upon having been designated as a business group subject to limitations on cross shareholding pursuant to Article 31 of the Monopoly Regulation and Fair Trade Act under statutes, other than the Monopoly Regulation and Fair Trade Act, the affiliate shall not be deemed to be included in the business group subject to limitations on cross shareholding; provided, an affiliate of the National Federation (in cases falling under subparagraph 4, limited to an affiliate of the National Federation, excluding the NongHyup Financial Group and its subsidiaries) shall be deemed to be included in the business group subject to limitations on cross shareholding under any of the following statutes: <Added on Dec. 11, 2012; Jun. 9, 2020; Dec. 29, 2020>

1. The Broadcasting Act;

2. The Software Promotion Act;

3. The Inheritance Tax and Gift Tax Act;

4. The Financial Investment Services and Capital Markets Act.

(8) Where the NongHyup Agribusiness Group and its subsidiaries (including second-tier subsidiaries; hereafter the same shall apply in this Article) conduct the business prescribed in Article 161-4(2) with the National Federation, cooperatives, etc. (including members of cooperatives; hereafter the same shall apply in this Article), Article 40(1) of the Monopoly Regulation and Fair Trade Act shall not apply to activities necessary to achieve the purpose of such business; provided, this shall not apply where any person other than the NongHyup Agribusiness Group and its subsidiaries, the National Federation, cooperatives, etc. is involved in such activities and where the activities infringe on consumers' interests by substantially restricting competition in a certain field of transaction. <Added on Dec. 31, 2014; Dec. 27, 2016; Dec. 29, 2020>

(9) Article 45(1)9 of the Monopoly Regulation and Fair Trade Act shall not apply to any of the following activities performed by the NongHyup Agribusiness Group and its subsidiaries on cooperatives, etc. in accordance with reasonable standards disclosed in advance to improve the rights and interests of farmers; provided, this shall not apply where the activity substantially restricts competition in a certain field of transaction and infringe on consumers' interests: <Added on Dec. 31, 2014; Dec. 29, 2020>

1. Creation of, support for, and guidance of economic business of cooperatives, etc.;

2. Provision of financial support for cooperatives, etc.

[This Article Wholly Amended on Jun. 9, 2009]

[Title Amended on Mar. 31, 2011]

Article 12-2(Relationship to the Framework Act on Labor Welfare) #

(1) The National Federation, the NongHyup Agribusiness Group, etc. may be deemed the same business or same place of business for the purpose of applying the Framework Act on Labor Welfare and may integrate and operate the intra-company labor-welfare fund.

(2) Other matters necessary for the integrated operation of the intra-company labor-welfare fund shall be prescribed by the articles of association of the intra-company labor-welfare fund corporation.

[This Article Added on Dec. 11, 2012]

[The amended provisions of Article 12-2 of the Act (No. 11532, Dec. 11, 2012) shall remain effective until Mar. 1, 2017 pursuant to Article 2 of the Addenda to that Act]

Article 12-3(Relationship to the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets) #

Where a cooperative, etc. supplies goods that it directly produces to a public institution (referring to a public institution defined in subparagraph 2 of Article 2 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets), the cooperative, etc. shall be deemed a person eligible to enter into a supply contract with the State by means of a negotiated contract under Article 33(1), with the exception of its subparagraphs, of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets.

[This Article Added on Dec. 30, 2017]

[The amended provisions of Article 12-3 of the Act (No. 15337, Dec. 30, 2017) shall remain effective until Dec. 29, 2027 pursuant to Article 2 of the Addenda to that Act]

Article 13(Purpose) #

The purpose of a local agricultural cooperative (hereafter in this Chapter referred to as "local agricultural cooperative") is to increase the agricultural productivity of its members, expand and facilitate the distribution of agricultural products produced by its members, and improve the economic, social, and cultural status of its members by providing the technology, funds, and information that they require.

[This Article Wholly Amended on Jun. 9, 2009]

Article 14(Business area and branch office) #

(1) The business area of a local agricultural cooperative shall be determined to cover a single Si under Article 2(1)2 of the Local Autonomy Act (including an administrative Si under Article 10(2) of the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City; hereinafter the same shall apply), Gun or Gu by the articles of association; provided, where it is unsuitable to designate a single Si/Gun/Gu as a business area in consideration of neighborhood units, economic units, etc. and authorization is obtained from the Minister of Agriculture, Food and Rural Affairs, a business area may be determined to cover 2 or more Sis/Guns/Gus by the articles of association. <Amended on Mar. 23, 2013; Dec. 13, 2022>

(2) A local agricultural cooperative may establish branch offices in accordance with the standards and procedures prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 15(Authorization for establishment) #

(1) In order to establish a local agricultural cooperative, at least 20 persons qualified as members of a local agricultural cooperative in the relevant business area shall become promoters, prepare the articles of association, obtain authorization therefor from the Minister of Agriculture, Food and Rural Affairs upon a resolution at the inaugural general meeting. In such cases, standards and procedures necessary for authorization, such as the number of members, amount of investments, etc. shall be prescribed by Presidential Decree. <Amended on Mar. 23, 2013>

(2) A resolution at the inaugural general meeting shall be adopted with the concurring vote of a majority of those who have submitted a written consent to the establishment to the promoters before the meeting.

(3) If any promoter refuses to file an application for authorization for establishment under paragraph (1), the remaining promoters may file an application accompanied by a statement of reasons therefor.

(4) Upon receipt of an application for authorization to establish a local agricultural cooperative pursuant to paragraph (1), the Minister of Agriculture, Food and Rural Affairs shall grant authorization, except in any of the following cases: <Amended on Mar. 23, 2013; Oct. 31, 2017>

1. Where documents required for authorization for establishment are incomplete;

2. Where the procedures for establishment, articles of association, and details of a business plan are in violation of statutes or regulations;

3. Where it fails to meet the standards for authorization for establishment.

(5) The Minister of Agriculture, Food and Rural Affairs shall notify the applicant of whether to grant authorization within 60 days from the date of receipt of an application for authorization under paragraph (1). <Added on Oct. 31, 2017>

(6) Where the Minister of Agriculture, Food and Rural Affairs fails to notify the applicant of whether authorization is granted or the extension of the processing period under the statutes or regulations related to treatment of civil petitions within the period prescribed in paragraph (5), authorization shall be deemed to have been granted on the day following the expiry of the period (referring to the relevant processing period where the processing period is extended or re-extended under statutes or regulations related to treatment of civil petitions). <Added on Oct. 31, 2017>

[This Article Wholly Amended on Jun. 9, 2009]

Article 16(Matters to be stated in articles of association) #

The articles of association of a local agricultural cooperative shall include the following matters:

1. Objectives;

2. Name;

3. Business area;

4. Location of the principal office;

5. Eligibility of members and their admission, withdrawal, and expulsion;

6. Matters concerning the value per unit of equity share, the maximum number of units of equity shares held by a member, the method of payment, and the calculation of shareholding;

7. Matters concerning preferential investment;

8. Matters concerning imposition of expenses and collection of administrative fines;

9. Matters concerning types of reserves and methods of accumulation;

10. Matters concerning appropriation of surplus earnings and losses;

11. Matters concerning fiscal years and accounting;

12. Matters concerning types of business and execution thereof;

13. Matters concerning the general meeting or other decision-making bodies, the fixed number, election, and dismissal of executive officers;

14. Matters concerning appointment and dismissal of officers;

15. Matters concerning methods for public announcement;

16. Where the articles stipulate the time of existence or grounds for dissolution, such time or grounds;

17. Where an in-kind investment agreement is made after its establishment, the name, quantity, and price of the invested property, the name and address of the investor, and the terms and conditions of cash investment conversion and a special repurchase agreement;

18. Where there is any property to be transferred under an agreement after its establishment, the name, quantity, and price of the property, and the name and address of the transferor;

19. Other matters required to be prescribed by the articles of association under this Act.

[This Article Wholly Amended on Jun. 9, 2009]

Article 17(Transfer of administrative affairs for establishment and payment for investment) #

(1) Upon obtaining authorization for establishment pursuant to Article 15(1), promoters shall transfer their administrative affairs to the president of the cooperative without delay.

(2) When the president of the cooperative takes over the administrative affairs pursuant to paragraph (1), he or she shall require that a person intending to become its member make equity investment payment within a specified period of time.

(3) An in-kind investor shall transfer the property which is the subject matter of investment within the payment period under paragraph (2) and submit documents necessary for registration, recordation, and transfer of other rights to the local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 18(Formation of local agricultural cooperative) #

(1) A local agricultural cooperative shall be duly formed when the registration for establishment under Article 90 is completed at the location of its principal office.

(2) Article 328 of the Commercial Act shall apply mutatis mutandis to the nullification of the establishment of a local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 19(Member eligibility) #

(1) A person eligible as a member shall be a farmer who has his or her domicile, residence, or place of business in the business area of the local agricultural cooperative, and shall not join 2 or more local agricultural cooperatives.

(2) An agricultural partnership and agricultural company under Articles 16 and 19 of the Act on Fostering and Supporting Agricultural and Fisheries Business Entities, which operate agriculture with their principal offices in the business area of a local agricultural cooperative, may become members of the local agricultural cooperative.

(3) An item cooperative, the business area of which includes all or part of an autonomous Gu of the Special Metropolitan City or a Metropolitan City, may become a member of a local agricultural cooperative with the same business area.

(4) The scope of farmers under paragraph (1) shall be prescribed by Presidential Decree.

(5) Where a local agricultural cooperative changes its business area by the articles of association, existing members thereof shall remain as members even if they do not have a domicile, residence, place of business, or principal office in the new business area; provided, this shall not apply where the domicile, residence, place of business, or principal office is relocated outside the business area before change of business area by its articles of association. <Added on Jan. 23, 2024>

[This Article Wholly Amended on Jun. 9, 2009]

Article 20(Associate members) #

(1) A local agricultural cooperative may have a person who has a domicile or residence in its business area, and whose use of its business is deemed reasonable, as an associate member, as prescribed by the articles of association.

(2) A local agricultural cooperative may require its associate members to pay membership fees and expenses, as prescribed by its articles of association.

(3) Associate members of a local agricultural cooperative hall have the right to use its business, as prescribed by the articles of association.

(4) Where a local agricultural cooperative changes a business area by its articles of association, existing associate members shall remain as associate members even if they do not have a domicile or residence in the new business area; provided, this shall not apply where the domicile or residence is relocated outside the business area before the change of business area by its articles of association. <Added on Jan. 23, 2024>

[This Article Wholly Amended on Jun. 9, 2009]

Article 21(Investment) #

(1) A member shall make an investment in the minimum number of units prescribed by the articles of association.

(2) The value per unit of equity share shall be determined uniformly.

(3) The value per unit of equity share shall be prescribed by the articles of association.

(4) A member's equity share shall not be pledged.

(5) A member may not offset his or her investment against any debt owed to a local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 21-2(Preferential investment) #

`Article 147 shall apply mutatis mutandis to preferential investment in a local agricultural cooperative. In such cases, "National Federation" shall be construed as "local agricultural cooperative" and "Article 117" in Article 147(2) and (4) as "Article 21". <Amended on Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

Article 21-3(Re-investment of dividends on investment) #

A local agricultural cooperative may require its members to invest all or part of the dividends on their investments, as prescribed by its articles of association. In such cases, no member shall offset the amount of the dividend paid against any debt owed to the local agricultural cooperative.

[This Article Added on Jun. 9, 2009]

Article 22(Revolving investment) #

A local agricultural cooperative may require its members to invest all or part of the dividends to be paid to the members depending on their use of its business as prescribed by its articles of association, in addition to the investment under Article 21. In such cases, the latter part of Article 21-3 shall apply mutatis mutandis.

[This Article Wholly Amended on Jun. 9, 2009]

Article 23(Prohibition on transfer and co-ownership of equity interests) #

(1) A member shall not transfer his or her equity interests without approval from the local agricultural cooperative.

(2) If a non-member intends to take over equity interests, he or she shall comply with the procedures for membership, such as application for membership, qualification screening, etc.

(3) The transferee of equity interests shall succeed to the transferor's rights and obligations with respect to such equity interests.

(4) Equity interests of a member shall not be co-owned.

[This Article Wholly Amended on Jun. 9, 2009]

Article 24(Liability of member) #

(1) The liability of a member shall be limited to the amount of his or her investment.

(2) A member shall faithfully participate in the operation process of the local agricultural cooperative and faithfully use its business, such as the shipment of produced agricultural products through the local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 24-2(Preferential treatment of members) #

(1) A local agricultural cooperative may give preferential treatment to members who conclude an agreement on the use of its economic business, such as the shipment of agricultural products, and remain faithful to the agreement (hereafter in this Article referred to as "committed members") in terms of their use of business, dividend payments, etc.

(2) Details concerning the scope of committed members, education, liability, confirmation of the conclusion and performance of an agreement, details of preferential treatment, etc. shall be prescribed by the articles of association. <Amended on Dec. 27, 2016>

(3) A local agricultural cooperative shall formulate and implement a plan for fostering committed members each year if the scale of its economic business under Article 57(1)2 or the ratio of members who use such business meets the standards prescribed by Presidential Decree. <Added on Dec. 27, 2016>

[This Article Added on Jun. 9, 2009]

Article 25(Imposition of expenses and administrative fines) #

(1) A local agricultural cooperative may impose expenses and administrative fines on its members, as prescribed by the articles of association.

(2) When a member pays expenses and an administrative fine under paragraph (1), he or she shall not offset them against his or her debt owed to the local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 26(Voting and electoral rights) #

Members shall have equal voting rights and election rights regardless of the amount of their investment. In such cases, the voting rights may only be exercised by a person who has joined the relevant cooperative by the date 180 days before the expiry of the term of office of an executive officer or a representative (in the case of a special election, the date the reason for holding the election becomes definite).

[This Article Wholly Amended on Jun. 9, 2009]

Article 27(Proxy voting) #

(1) A member may have an agent exercise his or her voting rights. In such cases, the member shall be deemed to have been present.

(2) The agent shall be another member of a cooperative or a family member living with him or her (in the case of a corporation or a cooperative under Article 19(2) or (3), referring to its members), and he or she may act for only one member.

(3) The agent shall submit a written document certifying the right of representation to the local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 28(Subscription) #

(1) A local agricultural cooperative shall neither refuse to accept a person qualified as a member nor attach any conditions disadvantageous than other members without good cause; provided, it may refuse to accept a person in whose case 2 years have not elapsed since he or she was expelled for falling under any subparagraph of Article 30(1).

(2) A member under Article 19(1) shall be prohibited from joining another local agricultural cooperative established in the same business area within one year and 6 months after joining the relevant local agricultural cooperative.

(3) A person who intends to become a new member shall make an investment as prescribed by the articles of association.

(4) A local agricultural cooperative shall not limit the number of members.

(5) Where an heir (referring to one heir selected by the joint heirs, in the case of joint inheritance) of a member who has withdrawn from membership due to death is also qualified as a member under Article 19(1), he or she may succeed to the investment of the decedent and become a member.

(6) Paragraph (1) shall apply mutatis mutandis to an heir who succeeds to the investment under paragraph (5).

[This Article Wholly Amended on Jun. 9, 2009]

Article 29(Withdrawal) #

(1) A member may withdraw by notifying the local agricultural cooperative of his or her intention to withdraw.

(2) If a member falls under any of the following cases, he or she shall be duly withdrawn from the cooperative: <Amended on Dec. 27, 2016>

1. Where the member is not qualified;

2. Where the member is deceased;

3. Where the member is bankrupt;

4. Where adjudication on commencement of adult guardianship has been rendered;

5. Where a corporation which is a member is dissolved.

(3) The board of directors under Article 43 shall confirm whether all or some of the members fall under any subparagraph of paragraph (2).

[This Article Wholly Amended on Jun. 9, 2009]

Article 30(Expulsion) #

(1) A local agricultural cooperative may expel a member through a resolution of the general meeting if the member falls under any of the following cases: <Amended on Mar. 31, 2011; Dec. 27, 2016>

1. Where he or she fails to use the business of a local agricultural cooperative for at least one year;

1-2. Where he or she fails to use the economic business under Article 57(1)2 for at least 2 years; provided, this shall not apply where any justifiable ground prescribed by the articles of association exists;

2. Where he or she fails to perform obligations to the local agricultural cooperative, such as making a payment for investment and expenses and others;

3. Where he or she engages in any activity prohibited by the articles of association.

(2) Where a member falls under any subparagraph of paragraph (1), the local agricultural cooperative shall notify the member of the grounds for expulsion by not later than 10 days before the general meeting and give him or her an opportunity to state opinions at the general meeting.

[This Article Wholly Amended on Jun. 9, 2009]

Article 31(Claims for refund of equity interests and suspension of refund) #

(1) A member who has withdrawn from a cooperative (including expelled members; hereafter the same shall apply in this Article and Article 32) may claim a refund of his or her equity interests from the fiscal year following the fiscal year in which he or she withdrew (including expulsion; hereafter the same shall apply in this Article and Article 32), as prescribed by the articles of association.

(2) The right to claim refund under paragraph (1) shall be extinguished if not exercised within 2 years.

(3) A local agricultural cooperative may suspend the refund of equity interests under paragraph (1) until the member has paid off all debts owed to the local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 32(Bearing of loss by withdrawing member) #

Where a local agricultural cooperative is unable to fully pay its debts with its property, it may request that the share of loss be borne by the withdrawing member when calculating the refundable amount under Article 31, as prescribed by its articles of association. In such cases, Article 31(1) and (2) shall apply mutatis mutandis.

[This Article Wholly Amended on Jun. 9, 2009]

Article 33(Petition for revocation of resolution) #

(1) A member may request the Minister of Agriculture, Food and Rural Affairs to revoke, or confirm the invalidity of, election following the resolution or election or may lodge a lawsuit seeking such revocation or confirmation on the grounds that the procedures for convening a general meeting (including the inaugural general meeting), the method of resolution, the details of the resolution, or election of executive officers are in violation of statutes or regulations, an administrative disposition taken under statutes or regulations, or articles of association; provided, the Minister of Agriculture, Food and Rural Affairs shall not take the measures under the latter part of paragraph (2) if he or she becomes aware of the fact that a lawsuit with the same purport as that of the member's petition has already been filed with the court. <Amended on Mar. 23, 2013>

(2) A petition with the Minister of Agriculture, Food and Rural Affairs under paragraph (1) shall require the consent of at least 300 members or 5/100 of members within one month from the date of resolution or election. In such cases, the Minister of Agriculture, Food and Rural Affairs shall notify the petitioner of the results of the measures taken within 3 months from the date of receipt of the written petition. <Amended on Mar. 23, 2013>

(3) Articles 376 through 381 of the Commercial Act shall apply mutatis mutandis to lawsuits under paragraph (1).

(4) Matters necessary for filing a petition for revocation of a resolution under paragraph (1) shall be prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 34(General meeting) #

(1) A local agricultural cooperative shall have a general meeting.

(2) A general meeting shall be comprised of members.

(3) An ordinary general meeting shall be convened once a year at the time prescribed by the articles of association, and an extraordinary general meeting shall be convened whenever necessary.

[This Article Wholly Amended on Jun. 9, 2009]

Article 35(Matters subject to resolution of general meeting) #

(1) The following matters shall be subject to resolution by a general meeting: <Amended on Mar. 31, 2011>

1. Modification of the articles of association;

2. Dissolution, division, or reorganization into an item cooperative;

3. Expulsion of a member;

4. A merger.

5. Election and dismissal of executive officers;

6. Establishing, amending, and repealing rules;

7. Formulating a business plan, income and expenditure budgeting, and making changes to important matters in the business plan and income and expenditure budget that are determined by the articles of association;

8. A business report, a statement of financial position, and an income statement, and proposals for surpluses and losses;

9. Becoming a promoter for the establishment of the National Federation, or joining or withdrawing from the National Federation;

10. Remuneration and compensation for actual expenses for executive officers;

11. Other matters deemed necessary by the president of a cooperative or the board of directors.

(2) The matters referred to in paragraph (1)1, 2, and 4 shall not take effect unless they are authorized by the Minister of Agriculture, Food and Rural Affairs; provided, this shall not apply where amendment referred to in paragraph (1)1 is made in accordance with the example of articles of association prescribed and publicly notified by the Minister of Agriculture, Food and Rural Affairs. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 36(Request for convocation of general meeting) #

(1) A member may request the convocation of a general meeting by submitting to the president of the cooperative a statement of the purposes of and grounds for such convocation, with the consent of at least 300 members or 10/100 of the members.

(2) Upon receipt of a request under paragraph (1), the president of the cooperative shall send a notice of a general meeting within 2 weeks.

(3) Where there is no one to convene a general meeting or where the president of the cooperative fails to send a notice of a general meeting within the period specified in paragraph (2) without justifiable grounds, the auditor shall send a notice of a general meeting within 5 days.

(4) If the auditor fails to send a notice of a general meeting within the period under paragraph (3), the representative of the member who has requested the convocation of a general meeting pursuant to paragraph (1) shall convene a general meeting. In such cases, the member shall perform the duties of the chairperson.

[This Article Wholly Amended on Jun. 9, 2009]

Article 37(Notification and peremptory notice to members) #

(1) When a notice or a peremptory notice is given by a local agricultural cooperative to its member, it shall be sent to the address or residence of the member listed in the membership register.

(2) To convene a general meeting, a notice of a general meeting stating the purpose thereof shall be sent to the members at least 7 days beforehand; provided, if a general meeting is convened again for the same purpose, it may be notified one day beforehand.

[This Article Wholly Amended on Jun. 9, 2009]

Article 38(Opening of general meeting and resolution) #

(1) Except as provided in this Act, a general meeting shall be held with the attendance of a majority of members and a resolution shall be passed with the concurring vote of a majority of those present; provided, a resolution on any of the matters referred to in Article 35(1)1 through 3 shall be passed with the attendance of a majority of the members and with the concurring vote of at least 2/3 of those present. <Amended on Jan. 23, 2024>

(2) Notwithstanding the proviso of paragraph (1), in cases of a cooperative that survives a merger, a meeting on the amendment of the articles of association due to such merger shall be held with the attendance of a majority of members and a resolution shall be passed with the concurring vote of a majority of those present. <Added on Jan. 23, 2024>

[This Article Wholly Amended on Jun. 9, 2009]

Article 39(Restrictions on voting rights) #

(1) A general meeting may adopt a resolution only on matters notified pursuant to Article 37(2); provided, this shall not apply to urgent matters, excluding the matters referred to in Article 35(1)1 through 5, where a majority of the members are present and at least 2/3 of the members present vote in favor.

(2) In the case of a resolution on an agenda item in which the interests of the local agricultural cooperative and its member conflict with each other, the relevant member shall not participate in the resolution process.

(3) A member may present a written proposal to the president of the cooperative to suggest that a certain matter be included in the purposes of a general meeting with the consent of at least 100 members or 3/100 of the members by no later than 30 days prior to the opening of the general meeting (hereinafter referred to as "member's proposal"). In such cases, unless the contents of the member's proposal violate statutes, regulations, or the articles of association, it shall be included in the purposes of the general meeting, and the member who made such proposal shall be given an opportunity to explain it at the general meeting if he or she so requests.

[This Article Wholly Amended on Jun. 9, 2009]

Article 40(Minutes of general meeting) #

(1) Minutes shall be prepared for a general meeting.

(2) The minutes shall include the proceedings and results of the meeting, and the chairperson and at least 5 members elected at the general meeting shall write their names and affix their seals, or shall sign them.

[This Article Wholly Amended on Jun. 9, 2009]

Article 41(Special cases concerning resolutions of general meeting) #

(1) Notwithstanding Article 35(1), a vote of the members may replace a resolution of the general meeting with respect to the following matters; in such cases, the notification and method of voting and other matters necessary for voting shall be prescribed by the articles of association: <Amended on Dec. 27, 2016; Mar. 10, 2026>

1. Dissolution, division, or reorganization into an item cooperative;

2. Election of the president of a cooperative under Article 45(5);

3. Dismissal of an executive officer under Article 54(1);

4. A merger.

(2) The methods for resolution or election on the matters referred to in the subparagraphs of paragraph (1) shall be as follows:

1. In the case of paragraph (1)1, a resolution shall be passed by a vote of a majority of the members and the concurring vote of at least 2/3 of the members who voted;

2. In the case of paragraph (1)2, the person receiving the highest number of valid votes shall be elected; provided, if there are more than 2 candidates with the same highest number of votes, the elder person shall be elected;

3. In the case of paragraph (1)3, a resolution shall be passed by a vote of a majority of the members and the concurring vote of at least 2/3 of the members who voted;

4. In the case of paragraph (1)4, a resolution shall be passed by a vote of a majority of the members and the concurring vote of a majority of the members who voted.

[This Article Wholly Amended on Jun. 9, 2009]

Article 42(Board of delegates) #

(1) A local agricultural cooperative may establish a board of delegates that can replace a general meeting on matters other than those prescribed in the subparagraphs of Article 41(1), as prescribed by the articles of association.

(2) Delegates shall be members of the cooperative.

(3) The fixed number, term of office, and method of election of delegates shall be prescribed by the articles of association; provided, if the term of office of a delegate ends during the period from the last month of the settlement of accounts for the year in which the term of office expires to the date before an ordinary general meeting for the settlement of accounts, such term of office shall be extended until the end of the ordinary general meeting.

(4) No delegate shall concurrently hold office as an executive officer or employee of the relevant local agricultural cooperative, excluding the president thereof, and as an executive officer or employee of another cooperative.

(5) The provisions concerning the general meeting shall apply mutatis mutandis to the board of delegates; provided, the voting rights of delegates shall not be exercised by their agents.

[This Article Wholly Amended on Jun. 9, 2009]

Article 43(Board of directors) #

(1) A local agricultural cooperative shall have a board of directors.

(2) The board of directors shall be comprised of directors including the president of the cooperative, and shall be convened by the president of the cooperative.

(3) The board of directors shall adopt resolutions on the following matters: <Amended on Dec. 31, 2014; Mar. 10, 2026>

1. Examination of member eligibility and acceptance of members;

2. Use of statutory reserves;

3. Maximum limit on borrowing;

4. Methods of imposition and collection of expenses;

5. Changes to minor matters, other than those prescribed in Article 35(1)7, among business plans and income and expenditure budgeting;

6. Appointment and dismissal of officers;

6-2. Appointment and dismissal of the compliance officer under Article 44-2;

7. Acquisition and disposal of real estate for business purposes in an amount not less than the amount specified in the articles of association;

8. Establishment, amendment, abolishment of business regulations and determination on business execution policies;

9. Matters mandated by the general meeting;

10. Matters provided in the statutes or regulations or in the articles of association;

11. Matters concerning requests for dismissal of standing directors;

12. Matters concerning performance evaluation of business affairs under the jurisdiction of standing directors;

13. Other matters deemed necessary by the president of the cooperative, and at least 1/3 of standing directors or directors.

(4) The board of directors shall supervise the business execution by the president of the cooperative or standing directors with respect to the matters resolved pursuant to paragraph (3).

(5) A majority of the members of the board of directors shall constitute a quorum, and any decision thereof shall require the concurring vote of a majority of those present.

(6) The board of directors may require executive officers to attend and state their opinions. <Amended on Mar. 10, 2026>

(7) Matters necessary for the performance evaluation under paragraph (3)12 and matters necessary for the operation of the board of directors shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 44(Organization and operation of operational evaluation advisory board) #

(1) In order to promote its sound development, a local agricultural cooperative may organize and operate an operational evaluation advisory board consisting of up to 15 members of the cooperative and external experts.

(2) The operational evaluation advisory board operated pursuant to paragraph (1) shall evaluate the operational status of the local agricultural cooperative and report the results thereof to the board of directors.

(3) The board of directors shall report the results of evaluation conducted by the operational evaluation advisory board to the general meeting.

(4) The president of the local agricultural cooperative shall actively reflect the results of the evaluation by the operational evaluation advisory board in the operation thereof.

(5) Matters necessary for the composition and operation of the operational evaluation advisory board under paragraph (1) shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 44-2(Internal control standards and compliance officer) #

(1) To comply with statutes and the articles of incorporation and to protect users of a regional agricultural cooperative, a regional agricultural cooperative shall establish basic procedures and standards to be followed by its executive officers and employees in performing their duties (hereafter in this Article referred to as the "internal control standards"), and shall have 1 or more persons who inspect compliance with the internal control standards, investigate any violations thereof, and report the results to the auditor (hereafter in this Article referred to as the "compliance officer").

(2) The president of a cooperative shall appoint or dismiss the compliance officer from among persons who meet the qualification requirements prescribed by Presidential Decree, following a resolution of the board of directors. In such cases, the compliance officer may be appointed from among the employees.

(3) Detailed matters concerning the internal control standards and the compliance officer shall be prescribed by Presidential Decree.

[This Article Added on Mar. 10, 2026]

Article 45(Fixed number and election of executive officers) #

(1) A local agricultural cooperative shall have not less than 7 but not more than 25 directors, including one president, and 2 auditors as its executive officers; and the fixed number thereof shall be prescribed by the articles of association. In such cases, at least 2/3 of the directors shall be members of the cooperative, and if the business scale of the local agricultural cooperative, such as assets, meets the standards prescribed by Presidential Decree, it shall have at least one director who is not a member.

(2) A local agricultural cooperative may have up to 2 standing directors, including its president under paragraph (1), as prescribed by the articles of association; provided, a local agricultural cooperative whose president is a non-standing position or whose business scale, such as assets, meets the standards prescribed by Presidential Decree shall have at least one standing director who is not a member. <Amended on Dec. 27, 2016>

(3) A local agricultural cooperative may appoint one of the auditors as a standing auditor as prescribed by the articles of association; provided, a local agricultural cooperative whose business scale, such as assets, meets the standards prescribed by Presidential Decree shall have one standing auditor who is not a member. <Added on Dec. 27, 2016>

(4) Notwithstanding the main clause of paragraph (2), where the business scale of a local agricultural cooperative, such as its assets, meets the standards prescribed by Presidential Decree, its president shall serve as a non-standing position. <Amended on Dec. 27, 2016>

(5) The president of a cooperative shall be elected from among its members and shall be directly elected by the members by vote at or outside a general meeting. <Amended on Dec. 27, 2016; Mar. 10, 2026>

1. Deleted; <Mar. 10, 2026>

2. Deleted; <Mar. 10, 2026>

3. Deleted. <Mar. 10, 2026>

(6) Executive officers other than the president of a cooperative shall be elected at a general meeting; provided, standing directors and a standing auditor shall be elected at a general meeting from among persons recommended by the personnel recommendation committee who have profound expertise and experience in the affairs of the cooperative and meet the requirements prescribed by Presidential Decree. <Amended on Dec. 31, 2014; Dec. 27, 2016>

(7) Executive officers of a local agricultural cooperative, except for standing executive officers, shall serve on an honorary basis. <Amended on Dec. 27, 2016>

(8) A local agricultural cooperative shall endeavor to ensure that female members and members who can represent respective items take up at least 1/5 of the fixed number of directors; provided, a local agricultural cooperative in which female members account for at least 30/100 of the total members shall elect at least one director from among such female members. <Amended on Dec. 31, 2014; Dec. 27, 2016>

(9) A director or auditor of a local agricultural cooperative who has resigned during his or her term of office in order to run for president of the local agricultural cooperative shall not be a candidate for a special election for which the grounds for holding the election have become definite due to his or her resignation. <Added on Mar. 31, 2011; Dec. 27, 2016>

(10) Except as provided in this Act, matters necessary for the election and recommendation of executive officers and the composition and operation of the personnel recommendation committee under paragraph (6) shall be prescribed by the articles of association. <Amended on Mar. 31, 2011; Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

Article 46(Duties of executive officers) #

(1) The president of a local agricultural cooperative shall represent it and execute its business affairs.

(2) Notwithstanding paragraph (1), where the president of a cooperative is a standing position and there is a standing director, the president shall delegate part of the business affairs to the standing director so that he or she can perform them at full discretion as prescribed by the articles of association, and where the president of the cooperative is a non-standing position, the standing director shall execute the business affairs; provided, a non-standing president of a cooperative under Article 45(4) may execute all or part of the business affairs under Article 57(1) (excluding the credit business under subparagraph 3 of that paragraph and incidental business related thereto), as prescribed by the articles of association. <Amended on Dec. 27, 2016>

(3) The president of a cooperative shall chair the general meeting and the board of directors.

(4) Where the president of a cooperative or a standing director is unable to perform his or her duties for any of the following reasons (excluding subparagraph 5 in the case of a standing director), a director (excluding directors who are not members of the cooperative in the case of the president) shall act on his or her behalf in the order determined by the board of directors: <Amended on Dec. 31, 2014>

1. Where a vacancy occurs;

2. Where he or she is in custody after the public prosecution has been instituted;

3. Deleted; <Dec. 31, 2014>

4. Where he or she is hospitalized in a medical institution under the Medical Service Act for at least 60 consecutive days;

5. Where the board of delegates has voted to dismiss the president of the cooperative pursuant to Article 54(2)3;

6. Where he or she is unable to perform his or her duties for other unavoidable reasons.

(5) Where the president of a cooperative holds that office and runs for president of the relevant local agricultural cooperative, the director in the order determined by the board of directors pursuant to paragraph 4 shall act on his or her behalf from the date of registration as a candidate until the date of election.

(6) The auditor shall audit the property of the local agricultural cooperative and the status of its business execution, and may request the National Federation to conduct an audit if deemed necessary to conduct a specialized audit.

(7) The auditor shall report to the general meeting if he or she finds any irregularities in the property status or business execution of the local agricultural cooperative; and if it is necessary to report the details to the general meeting promptly, he or she may request the president of the cooperative to convene a general meeting or may convene a general meeting as prescribed by the articles of association.

(8) The auditor may attend a general meeting or a meeting of the board of directors to state his or her opinions.

(9) Articles 412-5, 413, and 413-2 of the Commercial Act shall apply mutatis mutandis to the duties of an auditor. <Amended on Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

[Article 46(4)3, which was declared unconstitutional on Aug. 29, 2013 pursuant to Act No. 12950 (Dec. 31, 2014), has been deleted]

Article 47(Auditor's authority to represent) #

(1) When a local agricultural cooperative enters into a contract with the president or director of a cooperative, the auditor shall represent the local agricultural cooperative.

(2) Paragraph (1) shall apply mutatis mutandis to lawsuits between a local agricultural cooperative and its president or director.

[This Article Wholly Amended on Jun. 9, 2009]

Article 48(Term of office of executive officers) #

(1) The terms of office of the president of a cooperative and its directors shall be as follows, and that of the auditor shall be 3 years, and the president may be reappointed for a second term; provided, the term of office of the president of a cooperative, directors who are members of the cooperative, and auditor at the time of establishment shall be prescribed by the articles of association, but shall not exceed 2 years: <Amended on Mar. 30, 2026>

1. The president and directors who are members of the cooperative: 4 years;

2. Directors other than directors under subparagraph 1: 2 years.

(2) The proviso of Article 42(3) shall apply mutatis mutandis where the term of office of an executive officer under paragraph (1) expires.

[This Article Wholly Amended on Jun. 9, 2009]

Article 49(Grounds for disqualification of executive officers) #

(1) Any of the following persons shall not become an executive officer of a regional agricultural cooperative; provided, subparagraphs 10 and 12 shall apply only to executive officers who are members. <Amended on Mar. 31, 2011; Jun. 1, 2012; Jun. 11, 2014; Dec. 27, 2016; Mar. 10, 2026>

1. A person who is not a Korean national;

2. A minor, a person under adult guardianship, or a person under limited guardianship;

3. A person who was declared bankrupt and has not yet been reinstated;

4. A person whose qualifications have been lost or suspended by a court judgment or by other statutes;

5. A person who was sentenced to imprisonment without labor or a heavier punishment and for whom 3 years have not elapsed since the execution of the sentence was completed (including cases where the execution is deemed to have been completed) or since he or she was exempt from the execution;

6. A person in whose case 5 years have not elapsed since he or she was subjected to a disposition of improvement or disciplinary dismissal from office under Article 164(1) of this Act or Article 84 of the Credit Unions Act;

7. A person who is under suspension of the execution of imprisonment without labor or greater punishment sentenced to him or her by a court;

8. A person in whose case 4 years have not elapsed since he or she was sentenced to a fine of at least one million won for committing a crime prescribed in Article 172 of this Act or Articles 58, 59, 61 through 66 the Act on Elections Entrusted by Public Organizations;

9. A person in whose case the election as an executive officer under this Act was invalidated in accordance with Article 173(1)1 of this Act or subparagraph 1 of Article 70 of the Act on Elections Entrusted by Public Organizations and 5 years have not elapsed since such invalidation became final and conclusive;

10. A person who, as of the date of the public notice of the election, has not continuously held membership in the relevant regional agricultural cooperative for at least two years or has not continuously held paid-in equity shares of not less than the number of equity units prescribed by the articles of incorporation for at least two years; provided that, in the case of a regional agricultural cooperative for which two years have not elapsed since its establishment or merger, the term means a person who, as of the date of the public notice of the election, does not hold membership or does not hold paid-in equity shares of not less than the number of equity units prescribed by the articles of incorporation;

11. A person who falls behind in the repayment of debts to the relevant local agricultural cooperative, the National Federation, or any of the following financial institutions in excess of the amount and period prescribed by the articles of assocation as of the date of public announcement of the election day:

a. A bank established pursuant to the Banking Act;

b. The Korea Development Bank established under the Korea Development Bank Act;

c. The Industrial Bank of Korea under the Industrial Bank of Korea Act;

d. Other financial institutions prescribed by Presidential Decree;

12. A person who fails to use the business prescribed by Presidential Decree in the scale prescribed by the articles of association of the relevant local agricultural cooperative, among the businesses listed in Article 57(1), as of the date of public announcement of the election day.

(2) Where any ground referred to in paragraph (1) arises, the relevant executive officer shall retire from office automatically.

(3) An act in which an executive officer retiring from office under paragraph (2) was involved before such retirement shall not lose its effect.

[This Article Wholly Amended on Jun. 9, 2009]

Article 49-2(Separate sentence of punishment) #

(1) Notwithstanding Article 38 of the Criminal Act, a person who has committed both a crime prescribed in Article 49(1)8 and any other crime shall face separate sentencing.

(2) Where a sentence of imprisonment with labor or a fine of at least 3 million won is imposed for concurrent crimes involving a crime under Article 172(1)2 (excluding violation of Article 50(11)) or 3 of this Act or Article 58 or 59 of the Act on Elections Entrusted by Public Organizations committed by a lineal ascendant or descendant of a candidate for an executive officer or his or her spouse and any other crime, separate sentencing shall be conducted.

[This Article Added on Dec. 27, 2016]

Article 50(Restrictions on election campaign) #

(1) No one shall engage in any of the following acts with intent to have himself or herself or a specific person elected as an executive officer or delegate of a local agricultural cooperative or to prevent him or her from being elected:

1. Any of the following acts committed against a member of a cooperative (including a person who has filed with the cooperative an application for membership; hereafter the same shall apply in this Article) or his or her family (referring to the spouse of the member, a lineal ascendant, a lineal descendant, and sibling of the member or his or her spouse, and the spouse of a lineal ascendant, descendant, and sibling of the member; hereinafter the same shall apply) or an institution, organization, or facility established and operated by the member or his or her family:

a. Providing money, goods, entertainment, or any other property benefits;

b. Offering a position in a public or private organization;

c. Expressing intent to provide money, goods, entertainment, any other property benefits or a position in a public or private organization, or promising to provide them;

2. Conducting any act prescribed in the items of subparagraph 1 against a prospective candidate or candidate with intent to prevent him or her from becoming a candidate or to have him or her resign as a candidate;

3. Receiving any benefit or position prescribed in subparagraph 1 or 2, accepting an expression of intent to provide such benefit or position, or requesting or arranging the provision thereof.

(2) Any person intending to become an executive officer shall neither visit members of a cooperative door-to-door nor have them gather at a particular place for election campaign during the period between 90 days before the expiry of the term of office (referring to the date the grounds for holding the election become definite in the case of by-election, etc.) and the election day. <Amended on Dec. 8, 2020>

(3) No one shall slander a candidate (including a prospective candidate; hereinafter the same shall apply) by publishing false information or by publishing facts in connection with an election of an executive officer or delegate of a local agricultural cooperative by speech, poster, or any other means. <Amended on Mar. 31, 2011>

(4) No one shall conduct an election campaign other than the following methods in connection with the election of executive officers (limited to subparagraph 2 or 4 in cases of election of directors and auditors): <Amended on Mar. 31, 2011; Mar. 23, 2013; Jun. 11, 2014; Oct. 31, 2017>

1. Posting campaign posters;

2. Distributing election notices;

3. Holding joint speeches or public debates;

4. Soliciting support by telephone (including text messaging) and computer communications (including e-mail);

5. Soliciting support and distributing business cards in public places where a large number of people visit or gather as prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs, such as roads and markets.

(5) Details regarding the campaigning methods under paragraph (4) shall be prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs. <Added on Mar. 31, 2011; Mar. 23, 2013>

(6) Notwithstanding paragraph (4), no election campaign shall be conducted in any of the following cases: <Added on Mar. 31, 2011; Dec. 27, 2016>

1. Where the board of directors elects the president of the cooperative from among directors;

2. Electing a standing director and standing auditor;

3. Electing a director who is not a member of the cooperative.

(7) The election campaign referred to in paragraph (4) may be conducted from the date following the deadline for candidate registration to the date before the election day. <Added on Mar. 31, 2011>

(8) No person shall be allowed to be put on the electoral register by fraud or other improper means for purposes of voting, or making a person vote, at an election of a specific executive officer. <Added on Mar. 31, 2011; Jan. 23, 2024>

(9) No person shall deliver money or goods, such as packaged gifts or money envelopes, in a separate form to be distributed to a multiple number of members (including their family members, and institutions, organizations, or facilities established and operated by such members and their family members) from the beginning of candidate registration to the election day, for purposes of making himself or herself or a particular person be, or not to be, elected as an executive officer or a delegate. <Added on Mar. 31, 2011>

(10) No person shall assault, intimidate, induce, arrest, or detain a member or employee of the election commission of a cooperative under Article 51(1) or other persons engaged in election affairs; disturb a polling station, ballot-counting place, or election commission office through assault or intimidation; or conceal, destroy, damage, or unlawfully take facilities, equipment, documents, seals, or electoral register related to election management and monitoring affairs, such as ballot sheets, voting aids, and computer systems. <Added on Mar. 31, 2011; Jun. 11, 2014>

(11) Executive officers and employees of a local agricultural cooperative shall be prohibited from engaging in any of the following acts: <Amended on Mar. 31, 2011>

1. Using their position to campaign for office;

2. Participating in the planning of an election campaign or being involved in the implementation of such planning;

3. Surveying members of a cooperative on support for a candidate or announcing the results thereof.

[This Article Wholly Amended on Jun. 9, 2009]

[Amendment is made to paragraph (4) of this Article, which was declared unconstitutional by the Constitutional Court on Nov. 24, 2016 pursuant to Act No. 14984 (Oct. 31, 2017)]

Article 50-2(Restrictions on donation) #

(1) Any candidate for an election of an executive officer of a local agricultural cooperative, his or her spouse, or an institution, organization, or facility to which the candidate belongs shall not provide money, goods, or other property benefits, express his or her intent to provide such benefits, or promise to provide such benefits (hereinafter referred to as "donation") to a member of the cooperative (including a person who has filed an application for membership; hereafter the same shall apply in this Article) or his or her family member, or an institution, organization, or facility established and operated by the member or his or her family members from the date 180 days prior to the expiry of the term of office of an executive officer (referring to the date the grounds for holding the election become definite in the case of by-election, etc.) to the election day.

(2) Notwithstanding paragraph (1), none of the following shall be deemed an act of donation: <Amended on Mar. 23, 2013; Jun. 11, 2014; Dec. 27, 2016>

1. Functional acts

a. Offering ceremonial money or goods (including rewards, wreaths or flower pots) in the name of an institution, organization, or facility (excluding cooperatives under item b), to which a candidate belongs, based on its own business plan and budget;

b. Offering money or goods (including rewards, wreaths or flower pots), executed in accordance with the business plan and income and expenditure budget of a cooperative under statutes or regulations and its articles of association, in the name of the relevant institution, organization, or facility;

c. Performing obligations, such as payment for the purchase of goods, construction work, provision of services, etc. or payment of expenses, etc.;

d. Contributing or offering goods, etc. under the relevant statutes or regulations, other than the acts specified in items a through c;

2. Ceremonial acts

a. Offering money or goods for expressing congratulations or condolences at a ceremony of coming-of-age, marriage, funeral or ancestral worship of relatives referred to in Article 777 of the Civil Act or other occasions;

b. Offering money or goods (including wreaths and flower pots), within the ordinary limits, for expressing congratulations or condolences at a ceremony of coming-of-age, marriage, funeral or ancestral worship of persons other than relatives referred to in Article 777 of the Civil Act, or officiating a wedding;

c. Providing food or gifts of appreciation, within the ordinary limits, to guests who attend a ceremony of coming-of-age, marriage, funeral or ancestral worship or any other occasions;

d. Giving ceremonial gifts, at the end of the year, New Year's Day, or Chuseok, to paid clerical employees of an institution, organization, or facility (excluding the cooperative of which the candidate intends to become an executive officer) or to relatives referred to in Article 777 of the Civil Act;

e. Paying membership fees, within the previous limits, based on the articles of association, rules, or operational practices of the relevant organization, as a member of various types of social organizations, such as social gatherings, hometown associations, family clan meetings, alumni associations, and others;

f. Making monetary donations (including the provision of goods) to a church, Catholic church, or temple that the candidate usually attends;

3. Acts similar to remedial or charitable acts referred to in Article 112(2)3 of the Public Official Election Act;

4. Acts prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs, which are similar to those prescribed in subparagraphs 1 through 3.

(3) The scope of the amount of money and valuables for congratulatory or condolence purposes, food, gifts of appreciation, and ceremonial gifts that may be provided to a single person, to the customary extent, under paragraph (2) shall be as specified in the Appendix.

(4) No person shall promise, instruct, solicit, recommend, arrange, or demand any act referred to in paragraph (1).

(5) No person shall engage in, or make another person engage in, any act referred to in paragraph (1) for a candidate in connection with the relevant election. In such cases, any donation made in the name of the candidate or in any manner by which it can be presumed to be made by the candidate shall be deemed a donation for such candidate in connection with the relevant election. <Amended on Mar. 31, 2011>

(6) The president of a cooperative shall not make any donation under paragraph (1) during his or her term of office; provided, this shall not apply to any act not deemed a donation under paragraph (2).

[This Article Wholly Amended on Jun. 9, 2009]

Article 50-3(Restrictions on offering of money or goods for expressing congratulations or condolences by the president of cooperative) #

(1) Where money or goods are provided for a ceremony of coming-of-age, marriage, funeral or ancestral worship or any other similar occasions at the expense of a local agricultural cooperative, they shall be provided in the name of the local agricultural cooperative and it shall be clearly recorded that they are paid at the expense of the relevant local agricultural cooperative. <Amended on Dec. 13, 2022>

(2) Notwithstanding the proviso of Article 50-2(6), where money or goods for congratulatory or condolence purposes are provided pursuant to paragraph (1), any act conducted by disclosing the title or name of the president of the relevant local agricultural cooperative or by any method that can be presumed to be done by the president shall be deemed an act of donation.

[This Article Added on Mar. 31, 2011]

Article 51(Composition and operation of election commission) #

(1) A local agricultural cooperative shall organize and operate an election commission to manage the election of executive officers in a fair manner.

(2) The election commission shall be comprised of at least 7 members commissioned by the board of directors from among members (excluding executive officers and employees) and persons experienced in elections.

(3) Matters necessary for the functions and operation of the election commission shall be prescribed by the articles of association.

(4) A local agricultural cooperative shall entrust the management of an election of the head of the cooperative to be elected pursuant to Article 45(5) and 2 to the Gu/Si/Gun election commission under the Election Commission Act (hereinafter referred to as "Gu/Si/Gun election commission") having jurisdiction over the location of their principal office, as prescribed by the articles of association. <Amended on Mar. 31, 2011; Act No. 14839, Dec. 27, 2016; Mar. 10, 2026>

(5) Deleted. <Jun. 11, 2014>

(6) Deleted. <Jun. 11, 2014>

(7) The Gu/Si/Gun election commission entrusted with the management of the election of the president of a local agricultural cooperative pursuant to paragraph (4) may request the head of the prosecutors' office having jurisdiction over the location of the principal office of the relevant local agricultural cooperative to inquire into criminal records of a candidate for the president of the relevant cooperative (including sentences already lapsed; hereafter in this Article, referred to as "criminal records") for which a fine of one million won or a heavier punishment is awarded, and the head of the relevant prosecutors' office shall, without delay, forward such criminal records. <Added on Mar. 31, 2011>

(8) Any person who intends to become a candidate for an executive officer other than the president of a cooperative under paragraph (7) may request the head of a national police agency having jurisdiction over his or her domicile to inquire into his or her criminal records, and the head of the relevant national police agency shall, without delay, forward the criminal records. In such cases, the criminal records received shall be submitted when he or she is registered as a candidate. <Added on Mar. 31, 2011>

[This Article Wholly Amended on Jun. 9, 2009]

Article 52(Prohibition of concurrent office-holding by executive officers and employees) #

(1) The president and directors of a cooperative shall not concurrently serve as an auditor of the local agricultural cooperative.

(2) No executive officer of a local agricultural cooperative shall concurrently serve as an employee of the local agricultural cooperative.

(3) No executive officer of a local agricultural cooperative shall concurrently serve as an executive officer or employee of another cooperative.

(4) No person who runs or engages in a business in de facto competition with the business of a local agricultural cooperative shall serve as an executive officer, employee, or delegate of the local agricultural cooperative.

(5) The scope of business in de facto competition under paragraph (4) shall be prescribed by Presidential Decree.

(6) The president and directors of a cooperative shall not conduct transactions with the relevant local agricultural cooperative in excess of the scale prescribed by the articles of association on their own account or on the account of a third party without obtaining approval from the board of directors.

[This Article Wholly Amended on Jun. 9, 2009]

Article 53(Obligations and responsibilities of executive officers) #

(1) Executive officers of a local agricultural cooperative shall faithfully perform their duties in compliance with this Act, orders issued under this Act, and the provisions of the articles of association.

(2) An executive officer shall be jointly and severally liable for any loss inflicted on a local agricultural cooperative by committing an act in violation of any statute or regulation or the articles of association when performing his or her duties or by neglecting his or her duties.

(3) An executive officer shall be jointly and severally liable for damages for any loss inflicted on a third party by intention or gross negligence in the performance of their duties.

(4) If any act referred to in paragraphs (2) and (3) is conducted in accordance with a resolution of the board of directors, the directors who have consented to such resolution shall also be jointly and severally liable for damages. In such cases, directors who have not filed an objection according to the minutes, among those who participated in such resolution, shall be presumed to have consented to such resolution.

(5) Paragraphs (2) and (3) shall also apply to any loss inflicted on a local agricultural cooperative or a third party by an executive officer filing a false report on the settlement of accounts, registration, or public announcement.

[This Article Wholly Amended on Jun. 9, 2009]

Article 54(Dismissal of executive officers) #

(1) Members of a cooperative may request a general meeting to dismiss an executive officer with the consent of at least 1/5 of the members. In such cases, a resolution shall be adopted at the general meeting with the attendance of a majority of the members and the concurring vote of at least 2/3 of those present.

(2) Members may dismiss an executive officer by any of the following methods, depending on the election method under Article 45:

1. An executive officer elected by a board of delegates: A resolution on dismissal with the attendance of a majority of the delegates and the concurring vote of at least 2/3 of those present, at the request of at least 1/3 of delegates;

2. Deleted; <Mar. 10, 2026>

3. The president of a cooperative directly elected by members: A decision for dismissal by a vote of the members following a resolution by the board of delegates; in such cases, the quorum for resolution under subparagraph 1 shall apply mutatis mutandis to such resolution and a decision for dismissal shall require a vote of a majority of the members and the concurring vote of a majority of the members who have voted.

(3) In order to dismiss a standing director at the request of the board of directors pursuant to Article 43(3)11, a resolution shall be adopted with the attendance of a majority of the delegates and the concurring vote of at least 2/3 of those present.

(4) In order to adopt a resolution on dismissal, the relevant executive officer shall be notified of the grounds for dismissal and shall be given an opportunity to state his or her opinions at the general meeting or the board of delegates' meeting.

[This Article Wholly Amended on Jun. 9, 2009]

Article 55(Application mutatis mutandis of Civil Act and Commercial Act) #

`Articles 35 and 63 of the Civil Act and Articles 382(2), 385(2) and (3), 386(1), 402 through 408 of the Commercial Act shall apply mutatis mutandis to executive officers of a local agricultural cooperative. In such cases, "a shareholder who holds no less than three percent of the total number of issued and outstanding shares" in Article 385(2) of the Commercial Act shall be construed as "a member of a cooperative with the consent of 100 members or 3/100 of the members", and "a shareholder who holds no less than one percent of the total number of issued and outstanding shares" in Articles 402 and 403(1) of that Act as "a member of a cooperative with the consent of 100 members or 1/100 of the members", respectively.

[This Article Wholly Amended on Jun. 9, 2009]

Article 56(Appointment and dismissal of employees) #

(1) Employees of a local agricultural cooperative shall be appointed and dismissed by the president of the cooperative, as prescribed by the articles of association; provided, in the case of a local agricultural cooperative with a standing director, the president shall appoint and dismiss them upon the recommendation of the standing director.

(2) A local agricultural cooperative shall have officers, as prescribed by the articles of association, and they shall be appointed and dismissed by the president of the cooperative, from among the persons who have passed a screening examination conducted by the Chairperson, following a resolution by the board of directors. <Amended on Mar. 31, 2011>

(3) Articles 11(1) and (3), 12, 13, and 17 of the Commercial Act and Articles 23(1), 50, and 51 of the Commercial Registration Act shall apply mutatis mutandis to officers. <Amended on May 20, 2014>

[This Article Wholly Amended on Jun. 9, 2009]

Article 57(Business) #

(1) A local agricultural cooperative shall conduct all or some of the following businesses in order to achieve its objectives: <Amended on Mar. 31, 2011; Mar. 23, 2013; Dec. 31, 2014; Dec. 27, 2016>

1. Education and support

a. Education and support for joint shipment and sale of agricultural products produced by its members;

b. Counseling, education and training for improving agricultural production and management capabilities;

c. Collection and provision of information related to the agricultural industry and rural life;

d. Education and support for improving housing and living conditions as well as culture;

e. Projects for facilitating exchanges with urban cities;

f. Operation of demonstration fields, nurseries, and research center for the development, dissemination of new varieties and the spread of agricultural technology;

g. Support for rural communities and farmers in informatization;

h. Education and support for persons returning to farming and rural communities in their agricultural management and settlement into rural life;

i. Other education and public relations in relation to the conduct of businesses;

2. Economic business

a. Manufacturing, processing, selling, and exporting agricultural products produced by its members;

b. Distribution control and stockpiling of agricultural products produced by members;

c. Purchase, manufacture, processing, and supply of materials necessary for members' business and life;

d. Operation of common-use facilities and leasing of equipment necessary for members' business or life;

e. Projects to increase non-farm income, such as processing business and tourism business utilizing the labor force of members or rural resources;

f. Brokerage of sale, lease, or exchange of farmland;

g. Entrusted farming;

h. Arranging and providing agricultural labor;

i. Rural housing projects, such as rural housing supply;

j. Storage business;

k. Creating, supporting, and guiding the economic business of members and invested corporations;

3. Credit business

a. Earnings from members' deposits and installment savings;

b. Loans for members;

c. Domestic exchange;

d. Bill discount;

e. Acting as an agent for the State, public organizations and financial institutions;

f. Safekeeping of securities, precious metals, and important items for members;

g. Agency services for collection and payment of utility bills, administrative fees, etc.;

h. Agency services for revenue stamps, lottery tickets, and gift certificates;

4. Deleted; <Mar. 31, 2011>

5. Welfare programs

a. Installation and management of welfare facilities;

b. Funeral services;

c. Medical assistance;

6. Exchange and cooperation with other economic, social, and cultural organizations;

7. Business entrusted by the State, public organizations, the National Federation, the NongHyup Agribusiness Group and its subsidiaries, NongHyup Bank under Article 161-11 (hereinafter referred to as the "NongHyup Bank") or other cooperatives;

8. Businesses prescribed by other statutes or regulations as those of a local agricultural cooperative;

9. Businesses incidental to those listed in subparagraphs 1 through 8;

10. Other businesses approved by the Minister of Agriculture, Food and Rural Affairs, which are necessary to achieve the objectives of establishment.

(2) A local agricultural cooperative may borrow funds from the State, public organizations, other cooperatives, the National Federation, the NongHyup Agribusiness Group and its subsidiaries (limited to subsidiaries related to the relevant business), the NongHyup Bank, or the NongHyup Life Insurance Co., Ltd. in order to achieve the business objectives referred to in paragraph (1). <Amended on Mar. 31, 2011; Dec. 31, 2014; Mar. 10, 2026>

(3) The limits and methods of the credit business under paragraph (1)3 and limits of funds that a local agricultural cooperative may borrow from other cooperatives, the National Federation, the NongHyup Agribusiness Group, and its subsidiaries (limited to subsidiaries related to the relevant business), the NongHyup Bank, or the NongHyup Life Insurance Co., Ltd. under paragraph (2) shall be prescribed by Presidential Decree. <Amended on Mar. 31, 2011; Dec. 31, 2014; Mar. 10, 2026>

(4) Where the State or a public organization intends to entrust the business referred to in paragraph (1)7 to a local agricultural cooperative, it shall enter into an entrustment contract with the local agricultural cooperative, as prescribed by Presidential Decree.

(5) A local agricultural cooperative may invest in other corporations within the limit of its equity capital under Article 67(2) if necessary to conduct the business under paragraph (1); in such cases, the investment in a single corporation shall not exceed 20/100 of its equity capital, except in the following cases:

1. Investing in the National Federation;

2. Investing real estate and facilities held by a local agricultural cooperative to conduct the economic business under paragraph (1)2.

(6) A local agricultural cooperative may create and operate a business loss reserve fund and a loan loss reserve fund as prescribed by the articles of association in order to ensure the stable performance of the business under paragraph (1).

(7) The State, local governments, and the National Federation may subsidize the creation of a business loss reserve fund and loan loss reserve fund under paragraph (6) within budgetary limits.

[This Article Wholly Amended on Jun. 9, 2009]

Article 57-2(Promotion of sales of agricultural products) #

(1) A local agricultural cooperative shall promote the following matters for the efficient sale of agricultural products produced by its members: <Amended on Dec. 27, 2016>

1. Joint projects with other cooperatives, the National Federation, the NongHyup Agribusiness Group and its subsidiaries;

2. Establishment and amendment of regulations on contract cultivation, sale, etc. of agricultural products;

3. Other matters necessary for promoting the sale of agricultural products, such as securing customers.

(2) Where necessary for conducting the business under paragraph (1), a local agricultural cooperative may request the NongHyup Agribusiness Group and its subsidiaries to entrust the sale of agricultural products. In such cases, the NongHyup Agribusiness Group and its subsidiaries shall not refuse the request unless there is a compelling reason not to do so. <Amended on Dec. 27, 2016>

(3) Details concerning the conditions, procedures, etc. for the entrusted sale under paragraph (2) shall be determined by the chief executive officer of the NongHyup Agribusiness Group and its subsidiaries, respectively. <Amended on Dec. 27, 2016>

(4) The National Federation, the NongHyup Agribusiness Group and its subsidiaries may give preferential treatment, such as financial assistance, to local agricultural cooperatives, in consideration of their business performance, etc. under paragraphs (1) and (2), as prescribed by the articles of association. <Amended on Dec. 27, 2016>

(5) A regional agricultural cooperative may provide funds necessary for projects promoted by other cooperatives under paragraph (1). <Added on Mar. 10, 2026>

[This Article Added on Mar. 31, 2011]

Article 58(Use of business by non-members) #

(1) A local agricultural cooperative may allow non-members to use its business to the extent that it does not interfere with the use of such business by its members; provided, it may restrict the use of its business other than those specified in Article 57(1)2a (excluding the sales business of non-farmers), f, g and j, 3e, g and h, 5a and b, 7 and 10, as prescribed by the articles of association. <Amended on Mar. 31, 2011>

(2) Where a person belonging to the same household as a member of a cooperative, or another cooperative or a member of another cooperative uses the business of a local agricultural cooperative, it shall be deemed that a member of the local agricultural cooperative has used its business.

(3) A local agricultural cooperative shall provide maximum convenience to the members of item cooperatives when they intend to use the credit business of the local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 59(Creation and management of distribution support fund) #

(1) A local agricultural cooperative may raise and operate a distribution support fund to support the distribution of agricultural products produced by its member or a joint business corporation of cooperatives under Article 112-2, processed products thereof, etc.

(2) A distribution support fund under paragraph (1) shall be used for the following:

1. Contract farming of agricultural products;

2. Controlling the shipment of agricultural products and processed products thereof;

3. Promoting the shipment of agricultural products with common standards;

4. Ensuring the minimum price of agricultural products;

5. Any other distribution-related business deemed necessary by the local agricultural cooperative.

(3) The State, local governments, and the National Federation may support the creation of a distribution support fund under paragraph (1) within budgetary limits.

[This Article Wholly Amended on Jun. 9, 2009]

Article 60(Education for members of cooperatives) #

(1) A local agricultural cooperative shall provide its members with education on the principles and methods of operating the cooperative.

(2) A local agricultural cooperative shall actively provide its members with professional technical education and management counseling, etc. tailored to individual items to promote the rights and interests of members.

(3) In order to efficiently provide education and counseling under paragraph (2), a local agricultural cooperative may have a professional counselor for each major item.

[This Article Wholly Amended on Jun. 9, 2009]

Article 61 #

Deleted. <Mar. 31, 2011>

Article 62(Fiscal year) #

The fiscal year of a local agricultural cooperative shall be determined by its articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 63(Classification of accounts) #

(1) The accounts of local agricultural cooperatives shall be divided into general accounts and special accounts.

(2) General accounts shall be comprehensive, but shall be divided into credit business and non-credit business.

(3) Special accounts shall be established as prescribed by the articles of association when operating a specific business, holding and operating specific funds, or when separation from general accounts is required.

(4) The Minister of Agriculture, Food and Rural Affairs shall determine and publicly notify the financial standards concerning the financial relationship between general accounts and special accounts, between the credit business and the non-credit business, and between a cooperative and its members. In such cases, when determining the financial standards concerning the financial relationship between the credit business and the non-credit business, the Minister of Agriculture, Food and Rural Affairs shall consult thereon with the Financial Services Commission. <Amended on Mar. 23, 2013>

(5) Matters necessary for the accounting standards of the cooperative shall be determined by the Chairperson; provided, matters necessary for the accounting standards for the credit business may be separately determined by the Financial Services Commission. <Amended on Mar. 31, 2011>

[This Article Wholly Amended on Jun. 9, 2009]

Article 64(Business plans and income and expenditure budgeting) #

(1) A local agricultural cooperative shall prepare a business plan and a budget statement for income and expenditure every fiscal year and have them undergo deliberation by the board of directors and a resolution of the general meeting one month before the beginning of the fiscal year.

(2) Any modification of a business plan and a budget statement for income and expenditure shall be subject to a resolution by the board of directors; provided, modification of an important matter under Article 35(1)7 shall be subject to a resolution by the general meeting.

[This Article Wholly Amended on Jun. 9, 2009]

Article 65(Disclosure of operation) #

(1) The president of a cooperative shall prepare a business report and disclose the operational status thereof, as prescribed by the articles of association.

(2) The president of a cooperative shall keep the articles of association, minutes of general meetings, and a list of its members at the principal office.

(3) Members and creditors of the local agricultural cooperative may access minutes of the board of directors (applicable only to members) and documents under paragraph (2) at any time during business hours, or may request the issuance of copies of the documents. In such cases, they shall pay the fees set by the local agricultural cooperative.

(4) A member may request the access to accounting books and documents of a local agricultural cooperative or the issuance of copies thereof with the consent of at least 100 members or 3/100 of the members.

(5) A local agricultural cooperative shall not refuse to issue copies under paragraph (4) unless there is a compelling reason not to do so, and shall specify the grounds in writing if intending to refuse.

(6) If a member of a local agricultural cooperative has reasons to suspect that there is a material fact of fraud or violation of laws, regulations or the articles of association in its business execution, the member may request the court to appoint an inspector to investigate the status of its business and property with the consent of 100 members or 3/100 of the members. In such cases, Article 467 of the Commercial Act shall apply mutatis mutandis.

[This Article Wholly Amended on Jun. 9, 2009]

Article 65-2(Auditing by external auditors) #

(1) A regional agricultural cooperative whose business scale, including assets as of the end of the immediately preceding fiscal year, meets or exceeds the standards prescribed by Presidential Decree shall undergo an accounting audit by an auditor under subparagraph 7 of Article 2 of the Act on External Audit of Stock Companies, etc. (hereafter in this Article referred to as "auditor") at intervals of 1 year or 2 years, as prescribed by Presidential Decree. <Amended on Apr. 13, 2021; Mar. 10, 2026>

(2) In the case of a local agricultural cooperative failing to meet the standards prescribed by Presidential Decree under paragraph (1), if at least 1/3 of its delegates make a request, it shall be subject to an accounting audit by an external auditor for the fiscal year immediately preceding the year in which the date of such request falls, only once during the term of office of the president of the cooperative.

(3) Where a regional agricultural cooperative whose business scale, including assets, meets or exceeds the standards prescribed by Presidential Decree has undergone an accounting audit under paragraph (1) for 4 consecutive fiscal years, the Minister of Agriculture, Food and Rural Affairs may require the cooperative to undergo an accounting audit by an auditor designated by the Minister for the following 2 consecutive fiscal years.

(4) In cases where there is a change in the cycle under paragraph (1), the application of paragraph (3) shall be as prescribed by Presidential Decree. <Added on Mar. 10, 2026>

(5) The Minister of Agriculture, Food and Rural Affairs may entrust all or part of the duties for designating auditors under paragraph (3) to an institution prescribed by Presidential Decree. <Added on Mar. 10, 2026>

(6) Where an auditor has conducted an accounting audit under paragraphs (1) through (3), the auditor shall prepare an accounting audit report and submit it to the board of directors, the auditor, and the president of the relevant regional agricultural cooperative within the period prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs. <Amended on Mar. 31, 2011; Mar. 23, 2013; Mar. 10, 2026>

[This Article Wholly Amended on Jun. 9, 2009]

Article 66(Management of surplus funds) #

(1) A local agricultural cooperative may utilize surplus funds for its business as follows: <Amended on Mar. 31, 2011>

1. Making a deposit in the National Federation;

2. Making a deposit in the NongHyup Bank or financial institutions prescribed by Presidential Decree;

3. Purchasing State bonds, public bonds, or securities prescribed by Presidential Decree.

(2) In making a deposit under paragraph (1)1, the minimum ratio or amount of such deposit shall be determined by the board of directors of the National Federation to the extent that it does not impede the sound management of surplus funds.

[This Article Wholly Amended on Jun. 9, 2009]

Article 67(Legal reserves, carryovers, and discretionary reserves) #

(1) If there is any remainder after compensation for loss and appropriation for property depreciation for each fiscal year, a local agricultural cooperative shall accumulate at least 10/100 of the surplus (hereinafter referred to as "legal reserves") until it reaches 3 times its equity capital.

(2) The equity capital referred to in paragraph (1) shall be the aggregate of paid-in investment, revolving investment, preferential investment (only non-cumulative), membership fees, various kinds of reserves, and unappropriated retained earnings (the amount of loss carried forward shall be deducted, if any).

(3) A local agricultural cooperative shall carry over least 20/100 of its surplus to the following fiscal year in order to cover the business expenses under Article 57(1)1.

(4) A local agricultural cooperative may accumulate reserves for business, etc. (hereinafter referred to as "discretionary reserves"), as prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 67-2 #

Deleted. <Mar. 31, 2011>

Article 68(Compensation for loss and distribution of surplus) #

(1) In the event of any loss upon the settlement of accounts for each fiscal year (referring to a loss for the term), a local agricultural cooperative shall compensate for such loss in the order of unappropriated carryovers, discretionary reserves, legal reserves, capital reserves, and revolving investment; and in the event of a shortage even after compensation, it shall carry over the balance of such loss to the following fiscal year.

(2) A local agricultural cooperative shall not distribute surplus until after compensation for loss and deduction of legal reserves, carryovers, and discretionary reserves pursuant to Article 67.

(3) The surplus shall be distributed in the following order, as prescribed by the articles of association:

1. Dividends based on members' performance in business use;

2. Dividends based on paid-in investment within the limit of the ratio prescribed by the articles of association;

3. Dividends based on associate members' performance in business use.

[This Article Wholly Amended on Jun. 9, 2009]

Article 69(Accumulation of profits) #

A local agricultural cooperative shall accumulate the following amounts as capital reserves:

1. Gains on reduction of capital;

2. Gains on asset revaluation;

3. Gains on merger.

[This Article Wholly Amended on Jun. 9, 2009]

Article 70(Prohibition on use of legal reserves) #

The legal reserves shall not be used except in any of the following cases:

1. Compensating for losses of a local agricultural cooperative;

2. Conveying a portion of its property to another cooperative when the business area of a local agricultural cooperative becomes that of another cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 71(Submission, keeping, and approval of closing statement) #

(1) The president of a cooperative shall submit a closing statement (referring to a business report, a statement of financial position, a profit and loss statement, a surplus disposal plan or loss disposal plan, etc.) to the auditor at least one week prior to the date of an ordinary general meeting and keep it in the principal office. <Amended on Mar. 31, 2011>

(2) Members and creditors may access the documents under paragraph (1) or request the issuance of copies thereof. In such cases, they shall pay the fees prescribed by the local agricultural cooperative. <Amended on Mar. 31, 2011>

(3) The president of a cooperative shall submit the documents referred to in paragraph (1) and a written opinion of the auditor to an ordinary general meeting for approval.

(4) Article 450 of the Commercial Act shall apply mutatis mutandis to the release of liability of executive officers where approval is obtained pursuant to paragraph (3).

[This Article Wholly Amended on Jun. 9, 2009]

Article 72(Resolution on reduction of investment) #

(1) Where a local agricultural cooperative has adopted a resolution to reduce the amount of one unit of investment or the number of investment units (hereinafter referred to as "reduction of investment"), it shall prepare a statement of financial position within 2 weeks from the date of such resolution. <Amended on Mar. 31, 2011>

(2) In cases falling under paragraph (1), a public announcement shall be made for at least one month to inform creditors that they are required to state their objection, if any, within a specified period in accordance with the articles of association, and a peremptory notice shall be separately given to creditors who have already become aware of such fact.

(3) A public announcement or peremptory notice under paragraph (2) shall be made within 2 weeks from the date a resolution is passed under paragraph (1).

[This Article Wholly Amended on Jun. 9, 2009]

Article 73(Creditors' objection against reduction of investment) #

(1) If a creditor fails to raise an objection to a resolution on the reduction of investment by a local agricultural cooperative within the period prescribed in Article 72(2), it shall be deemed to have approved such resolution.

(2) Where a creditor has raised an objection, the resolution shall not take effect unless the local agricultural cooperative reimburses the creditor or provides reasonable security.

[This Article Wholly Amended on Jun. 9, 2009]

Article 74(Prohibition on acquisition of equity interests by cooperatives) #

A local agricultural cooperative shall neither acquire equity interests of its members nor establish a pledge against them.

[This Article Wholly Amended on Jun. 9, 2009]

Article 75(Merger) #

(1) Where a local agricultural cooperative intends to merge with another cooperative, it shall prepare a merger agreement and undergo a resolution of each general meeting.

(2) A merger shall require authorization from the Minister of Agriculture, Food and Rural Affairs. <Amended on Mar. 23, 2013>

(3) When establishing a local agricultural cooperative by merger, members of the establishment committee shall be elected at respective general meetings.

(4) The fixed number of establishment committee members shall be at least 20, half of which shall be appointed from among the members of each cooperative to be merged.

(5) Members of the establishment committee shall hold a meeting of the establishment committee to prepare the articles of association, appoint executive officers, and obtain authorization under Article 15(1).

(6) In order for the establishment committee to elect executive officers, a majority of its members shall be present and a majority of those present shall vote in favor of the person nominated by the committee members.

(7) The provisions of Section 2 of this Chapter concerning establishment shall apply mutatis mutandis to the establishment of a local agricultural cooperative under paragraphs (3) through (6), unless it is contrary to the nature of the merger and establishment.

(8) Article 529 of the Commercial Act shall apply mutatis mutandis to the nullification of a merger between cooperatives.

[This Article Wholly Amended on Jun. 9, 2009]

Article 75-2(Special cases concerning term of office of executive officers following merger) #

(1) Notwithstanding the proviso, with the exception of the subparagraphs, of Article 48(1), the term of office of the president, directors, and auditors of a local agricultural cooperative to be established by merger shall be 2 years from the date of registration of its establishment; provided, where the president of a local agricultural cooperative to be dissolved by merger is elected as the president of a local agricultural cooperative to be established by merger and where his or her remaining term of office as of the date of registration of establishment exceeds 2 years, the term of office of the president of the cooperative shall be the remaining term of office of such president.

(2) Notwithstanding Article 48(1), if the remaining term of office of the president of a local agricultural cooperative surviving after merger, its member-directors and auditors who are in office at the time of registration of the change of the cooperative is less than 2 years, their term of office shall be 2 years from the date of such registration of change.

[This Article Wholly Amended on Jun. 9, 2009]

Article 76(Support for merger) #

The State and the National Federation may provide financial support within budgetary limits, if deemed necessary to promote the merger of local agricultural cooperatives.

[This Article Wholly Amended on Jun. 9, 2009]

Article 77(Division) #

(1) When a local agricultural cooperative is divided, the scope of rights and obligations to be inherited by the newly established cooperative shall be resolved at a general meeting.

(2) The provisions of Section 2 of this Chapter concerning establishment shall apply mutatis mutandis to the establishment of a cooperative under paragraph (1), unless it is contrary to the nature of the division and establishment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 78(Reorganization) #

(1) Where a local agricultural cooperative intends to be reorganized into an item cooperative, it shall prepare the articles of association and obtain authorization from the Minister of Agriculture, Food and Rural Affairs following a resolution of the general meeting. <Amended on Mar. 23, 2013>

(2) The provisions of Section 2 of this Chapter concerning establishment shall apply mutatis mutandis to the reorganization of a cooperative under paragraph (1), unless it is contrary to its nature.

(3) The provisions concerning merger shall apply mutatis mutandis to the succession to rights and obligations following reorganization.

(4) Where a local agricultural cooperative engaged in the credit business is reorganized into an item cooperative, it may continue to conduct such business within the scope of the credit business that it has engaged in at the time of such reorganization.

[This Article Wholly Amended on Jun. 9, 2009]

Article 79(Succession to rights and obligations due to merger) #

(1) The local agricultural cooperative that survives or is established after merger shall inherit the rights and obligations of the local agricultural cooperative that is dissolved.

(2) After merger between local agricultural cooperatives, the name of the extinguished local agricultural cooperative indicated on the register or other official ledgers shall be deemed the name of the local agricultural cooperative that survives or is newly established.

[This Article Wholly Amended on Jun. 9, 2009]

Article 80(Public announcement and peremptory notice of merger, division, or reorganization) #

`Articles 72 and 73 shall apply mutatis mutandis to merger, division, or reorganization of local agricultural cooperatives.

[This Article Wholly Amended on Jun. 9, 2009]

Article 81(Effect of registration of merger) #

A merger between local agricultural cooperatives shall come into effect when the local agricultural cooperative surviving or established after such merger is registered under Article 95 at the seat of its principal office.

[This Article Wholly Amended on Jun. 9, 2009]

Article 82(Grounds for dissolution) #

A local agricultural cooperative shall be dissolved on any of the following grounds:

1. Occurrence of a cause for dissolution prescribed by articles of association;

2. Resolution at a general meeting;

3. Merger or division;

4. Revocation of authorization for establishment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 83(Declaration of bankruptcy) #

If a local agricultural cooperative is unable to fully pay its debts, the court may declare it bankrupt at the request of the president of the cooperative or creditors or ex officio.

[This Article Wholly Amended on Jun. 9, 2009]

Article 84(Liquidator) #

(1) When a local agricultural cooperative is dissolved, the president of the cooperative shall become a liquidator except in cases of bankruptcy; provided, this shall not apply where another person is appointed as a liquidator at the general meeting.

(2) A liquidator shall have the same rights and obligations as those of the president of the cooperative within the scope of his or her duties.

(3) The Minister of Agriculture, Food and Rural Affairs shall supervise the liquidation of local agricultural cooperatives. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 85(Duties of liquidator) #

(1) A liquidator shall investigate the status of property without delay after taking office, prepare a financial statement, determine the method of property disposal, and submit it to the general meeting for approval. <Amended on Mar. 31, 2011>

(2) If it is impossible to obtain approval under paragraph (1) because the general meeting is not held despite attempts to convene it, approval by the Minister of Agriculture, Food and Rural Affairs may replace approval by the general meeting. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 86(Remaining property upon liquidation) #

Except as provided in other statutes, any remaining property of a dissolved local agricultural cooperative upon liquidation shall be disposed of as prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 87(Restrictions on distribution of property by liquidator) #

A liquidator shall not distribute the property unless the debts are paid off or the money necessary for repayment has been deposited.

[This Article Wholly Amended on Jun. 9, 2009]

Article 88(Report on settlement of accounts) #

After liquidation, the liquidator shall without delay prepare a closing report and submit it to the general meeting for approval. In such cases, Article 85(2) shall apply mutatis mutandis.

[This Article Wholly Amended on Jun. 9, 2009]

Article 89(Application mutatis mutandis of Civil Act and other statutes) #

`Articles 79, 81, 87, 88(1) and (2),89 through 92, and 93(1) and (2) of the Civil Act and Article 121 of the Non-Contentious Case Procedure Act shall apply mutatis mutandis to the dissolution and liquidation of a local agricultural cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 90(Registration of establishment) #

(1) A local agricultural cooperative shall file for registration of establishment with the registry office having jurisdiction over its principal office within 2 weeks from the payment of equity investments.

(2) An application for registration of establishment shall contain the following matters:

1. Matters referred to in subparagraphs 1 through 4 and 16 through 18 of Article 16;

2. The total number of units of investments and the total amount of investments;

3. The date of authorization for establishment;

4. Names, resident registration numbers, and addresses of executive officers.

(3) When filing for registration of establishment, the president of the cooperative shall be the applicant.

(4) The application for registration of establishment under paragraph (2) shall be accompanied by copies of the written authorization for establishment, the minutes of the inaugural general meeting, and the articles of association.

(5) An application for registration of establishment of a local agricultural cooperative due to merger or division shall be accompanied by all of the following documents:

1. Documents under paragraph (4);

2. Documents evidencing that public announcement or peremptory notice has been made under Article 80;

3. Documents evidencing that repayment or security has been made or furnished to a creditor who raised an objection pursuant to Article 80.

[This Article Wholly Amended on Jun. 9, 2009]

Article 91(Registration of establishment of branch offices) #

Where a regional agricultural cooperative establishes a branch office, the location of the branch office and the date of establishment shall be registered within 3 weeks at the location of the principal office.

[This Article Wholly Amended on Jun. 9, 2009]

Article 92(Registration of relocation of office) #

(1) Where a regional agricultural cooperative has relocated its principal office, the new location and the date of relocation shall be registered within 3 weeks at the former location or the new location. <Amended on Sep. 20, 2024>

(2) Where a regional agricultural cooperative has relocated a branch office, the new location and the date of relocation shall be registered within 3 weeks at the location of the principal office. <Added on Sep. 20, 2024>

(3) In making the registration under paragraphs (1) and (2), the president of the cooperative shall be the applicant.

[This Article Wholly Amended on Jun. 9, 2009]

Article 93(Registration of change) #

(1) Where any matter under the subparagraphs of Article 90(2) is changed, a registration of change shall be made within 3 weeks at the location of the principal office.

(2) Notwithstanding paragraph (1), the registration of changes to the matters referred to in Article 90(2)2 shall be registered within one month after the end of the relevant fiscal year as of the end of the fiscal year.

(3) When filing for registration of change under paragraphs (1) and (2), the president of the cooperative shall be the applicant.

(4) An application for registration under paragraph (3) shall be accompanied by documents evidencing the changes made to the registered matters.

(5) An application for registration of change due to a reduction in investment, merger, or division shall be accompanied by all of the following documents:

1. Documents under paragraph (4);

2. Documents evidencing that public announcement or peremptory notice has been made under Article 72;

3. Documents evidencing that repayment or security has been made or furnished to a creditor who raised an objection pursuant to Article 73.

[This Article Wholly Amended on Jun. 9, 2009]

Article 94(Change of name of administrative district and registration thereof) #

(1) Where the geographical name of an administrative district is changed, that of the location of the office of the relevant local agricultural cooperative and the business area thereof entered in the register and the articles of association shall be deemed to have been changed.

(2) Where any change is made under paragraph (1), a local agricultural cooperative shall, without delay, notify the registry office thereof.

(3) Upon receipt of a notice under paragraph (2), a registry office shall change the entries in the register.

[This Article Wholly Amended on Jun. 9, 2009]

Article 95(Registration of merger) #

(1) In the case of a merger between local agricultural cooperatives, the local agricultural cooperative surviving the merger shall file for registration of change, and the local agricultural cooperative dissolved by the merger shall file for registration of dissolution, and the agricultural cooperative established by the merger shall file for registration of establishment under Article 90 at the seat of its principle office office. <Amended on Sep. 20, 2024>

(2) When filing for registration of dissolution under paragraph (1), the president of the local agricultural cooperative dissolved by merger shall be the applicant.

(3) In cases falling under paragraph (2), documents evidencing the grounds for dissolution shall be attached.

[This Article Wholly Amended on Jun. 9, 2009]

Article 96(Registration of reorganization) #

Where a local agricultural cooperative is changed to an item cooperative, it shall file for registration of dissolution of a local agricultural cooperative and registration of establishment of an item cooperative at the seat of its principal office within 2 weeks. In such cases, Article 97(3) shall apply mutatis mutandis to the registration of dissolution and Article 90 shall apply mutatis mutandis to the registration of establishment. <Amended on Sep. 20, 2024>

[This Article Wholly Amended on Jun. 9, 2009]

Article 97(Registration of dissolution) #

(1) If a regional agricultural cooperative is dissolved, it shall file for a registration of dissolution at the seat of its principal office within 2 weeks, except in cases of merger or bankruptcy. <Amended on Sep. 20, 2024>

(2) When filing for registration of dissolution under paragraph (1), the liquidator shall be the applicant except in cases falling under paragraph (4).

(3) An application for registration of dissolution shall be accompanied by documents evidencing the grounds for dissolution.

(4) The Minister of Agriculture, Food and Rural Affairs shall entrust the registration of dissolution due to the revocation of authorization for establishment. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 98(Registration of liquidator) #

(1) A liquidator shall register his or her name, resident registration number, and address at the location of the principal office within 2 weeks from the date of taking office.

(2) Where the president of a cooperative is not a liquidator, the registration under paragraph (1) shall be accompanied by documents evidencing the qualifications of the applicant.

[This Article Wholly Amended on Jun. 9, 2009]

Article 99(Registration of closing of liquidation) #

(1) Upon completion of liquidation, the liquidator shall file for a registration of completion of liquidation at the seat of the principal office within 2 weeks. <Amended on Sep. 20, 2024>

(2) An application for registration under paragraph (1) shall be accompanied by documents evidencing the approval of a closing report under Article 88.

[This Article Wholly Amended on Jun. 9, 2009]

Article 100(Base date for calculating registration date) #

Where the matters subject to registration require authorization, approval, etc. by the Minister of Agriculture, Food and Rural Affairs, the registration period shall be calculated starting from the date the documents regarding authorization, etc. arrive. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 101(Register) #

The registry office shall keep the register of local agricultural cooperatives.

[This Article Wholly Amended on Jun. 9, 2009]

Article 102(Application mutatis mutandis of Non-Contentious Case Procedure Act and other statutes) #

Except as provided in this Act, the provisions of the Non-Contentious Case Procedure Act and the Commercial Registration Act concerning registration shall apply mutatis mutandis to the registration of local agricultural cooperatives.

[This Article Wholly Amended on Jun. 9, 2009]

Article 103(Purpose) #

The purpose of a local livestock cooperative (hereafter in this Chapter referred to as "local livestock cooperative") is to help improve livestock productivity for its members, expand markets for livestock products produced by its members and facilitate distribution thereof, and upgrade the economic, social, and cultural status of its members by providing the technology, funds, and information that its members require.

[This Article Wholly Amended on Jun. 9, 2009]

Article 104(Business area) #

The business area of a local livestock cooperative shall be prescribed by its articles of association, centered around an administrative district, economic zone, etc.; provided, more than one local livestock cooperative shall not be established in the same business area.

[This Article Wholly Amended on Jun. 9, 2009]

Article 105(Qualifications of members) #

(1) A member shall be a farmer running a livestock business, who has his or her address, residence, or place of business in the business area of the local livestock cooperative, and shall not join 2 or more local livestock cooperatives.

(2) The scope of farmers who run a livestock business under paragraph (1) shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Jun. 9, 2009]

Article 106(Business) #

A local livestock cooperative shall conduct all or some of the following businesses in order to achieve its objectives: <Amended on Mar. 31, 2011; Mar. 23, 2013; Dec. 31, 2014; Dec. 27, 2016>

1. Education and support

a. Education and support for joint shipment and sale of livestock products produced by its members;

b. Counseling, education and training for improving livestock production and management capabilities;

c. Collection and provision of information related to the livestock industry and rural life;

d. Education and support for improving rural life and culture;

e. Projects for facilitating exchanges with urban cities;

f. Fostering and supporting livestock-related self-help organizations;

g. Operation of breeding facilities and research centers for the development and dissemination of new varieties and the spread of livestock industry technology;

h. Livestock improvement, breeding, quarantine, and medical treatment business;

i. Education and public relations on safety of livestock products;

j. Support for informatization of rural communities and farmers;

k. Education and support for persons returning to farming and rural communities in their agricultural management and settlement into rural life;

l. Other education and public relations in relation to the conduct of businesses;

2. Economic business

a. Manufacturing, processing, selling, and exporting livestock products produced by members;

b. Distribution control and stockpiling of livestock products produced by members;

c. Purchase, manufacture, processing, and supply of materials necessary for members' business and life;

d. Operation of common-use facilities and leasing of equipment necessary for members' business or life;

e. Projects to increase non-farm income, such as processing business and tourism business utilizing the labor force of members or rural resources;

f. Entrusted livestock farming business;

g. Arranging and providing livestock labor;

h. Storage business;

i. Creating, supporting, and guiding the economic business of members and invested corporations;

3. Credit business

a. Earnings from members' deposits and installment savings;

b. Loans for members;

c. Domestic exchange;

d. Bill discount;

e. Acting as agent for the State, public organizations and financial institutions;

f. Safekeeping of securities, precious metals, and important items for members;

g. Agency services for collection and payment of utility bills, administrative fees, etc.;

h. Agency services for revenue stamps, lottery tickets, and gift certificates;

4. Deleted; <Mar. 31, 2011>

5. Operation of medical assistance projects and welfare facilities for members;

6. Exchange and cooperation with other economic, social, and cultural organizations;

7. Businesses entrusted by the State, public organizations, the National Federation, NongHyup Agribusiness Group and its subsidiaries, NongHyup Bank, or other cooperatives;

8. Businesses prescribed by other statutes or regulations as those of a local livestock cooperative;

9. Businesses incidental to those listed in subparagraphs 1 through 8;

10. Other businesses approved by the Minister of Agriculture, Food and Rural Affairs, which are necessary to achieve the objectives of establishment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 107(Provisions applicable mutatis mutandis) #

(1) With respect to local livestock cooperatives, Articles 14(2), 15 through 18, 19(2), (3) and (5), 20, 21, 21-3, 22 through 24, 24-2, 25 through 28 (excluding paragraph (2)), 29 through 44, 44-2, 45, 49, 49-2, 50, 50-2, 50-3, 51 through 56, 57(2) through (7), 57-2, 58 through 60, 62 through 65, 65-2, 66 through 75, 75-2, and 76 through 102 shall apply mutatis mutandis. In such cases, "local agricultural cooperative" shall be construed as "local livestock cooperative", "agricultural products" as "livestock products", "Article 57(1)2" in Article 24-2(3) as "subparagraph 2 of Article 106", "Article 57(1)" in Article 49(1)12 as "Article 106", "paragraph (1)" in Article 57(2) as "Article 106", "paragraph (1)3" in Article 57(3) as "subparagraph 3 of Article 106", "paragraph 1 (7)" in Article 57(4) as "subparagraph 7 of Article 106", "paragraph (1)" in the former part of the part other than the subparagraphs of Article 57(5) as "Article 106", "paragraph (1)2" in Article 57(5)2 as "subparagraph 2 of Article 106", "paragraph (1)" in Article 57(6) as "Article 106", "Article 57(1)2a (excluding the sales business of a person other than farmers), f, g and i, 3e, g and h, 5a and b, 7 and 10" in the proviso of Article 58(1) as "subpagraphs 2a (excluding the sales business of a person other than farmers), f and h, 3e, g and h, 5 (limited to operation of welfare facilities), 7 and 10 of Article 57", "contract farming" in Article 59(2)1 as "contract shipment", and "Article 57(1)1" in Article 67(3) as "subparagraph 1 of Article 106". <Amended on Mar. 31, 2011; Dec. 27, 2016; Jan. 23, 2024; Mar. 10, 2026>

(2) Article 147 shall apply mutatis mutandis to preferential investment in a local livestock cooperative. In such cases, "National Federation" shall be construed as "local livestock cooperative", and "Article 117" in Article 147(2) and (4) shall be construed as "Article 21 applied mutatis mutandis pursuant to Article 107(1)". <Amended on Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

[Article 46(4)3, which was declared unconstitutional on Aug. 29, 2013 pursuant to Act No. 12950 (Dec. 31, 2014), has been deleted]

Article 108(Purpose) #

The purpose of an item cooperative is to provide necessary technologies, funds, information, etc. to its members operating the livestock breeding business, such as farming in any of the items or business types prescribed by the articles of association, or the Korean cattle breeding business, dairy farming business, pig farming business, chicken farming business prescribed by the articles of association, and other livestock breeding businesses prescribed by Presidential Decree, and to help upgrade the economic, social and cultural status of its members by promoting the expansion of markets for agricultural and livestock products produced by members and smooth distribution thereof.

[This Article Wholly Amended on Jun. 9, 2009]

Article 109(Business area) #

The business area of an item cooperative shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 110(Qualifications of members) #

(1) The members of an item cooperative shall be farmers who have their domiciles, residences, or places of business in the relevant business area and who meet the qualifications prescribed by the articles of association.

(2) A member may not join 2 or more item cooperatives for the same item or type of business; provided, this shall not apply where the place of business is relocated outside the business area of the item cooperative due to damage caused by monocropping.

[This Article Wholly Amended on Jun. 9, 2009]

Article 110-2(Removal of executive officers) #

(1) Members of an item cooperative may request the removal of an executive officer at a general meeting with the consent of not less than 1/5 of the members. In such cases, the general meeting shall adopt a resolution with the attendance of a majority of the members and the affirmative vote of at least 2/3 of the members present.

(2) Members may remove an executive officer by any of the following methods in accordance with the method of election under Article 112, which applies Article 45 mutatis mutandis:

1. An executive officer elected by a board of delegates: A resolution on dismissal with the attendance of a majority of the delegates and the concurring vote of at least 2/3 of those present, at the request of at least 1/3 of delegates;

2. The president of a cooperative elected by the board of directors: A resolution on dismissal at a general meeting at the request for dismissal from the board of directors; in such cases, the quorum for resolution under subparagraph 1 shall apply mutatis mutandis to the request for dismissal from the board of directors and the resolution for dismissal from the general meeting;

3. The president of a cooperative directly elected by members: A decision for dismissal by a vote of the members following a resolution by the board of delegates; in such cases, the quorum for resolution under subparagraph 1 shall apply mutatis mutandis to such resolution and a decision for dismissal shall require a vote of a majority of the members and the concurring vote of a majority of the members who have voted.

(3) In order to dismiss a standing director at the request of the board of directors pursuant to Article 43(3)11, which applies subparagraph 11 of Article 43(3) mutatis mutandis, a resolution shall be adopted with the attendance of a majority of the delegates and the concurring vote of at least 2/3 of those present.

(4) In order to adopt a resolution on dismissal, the relevant executive officer shall be notified of the grounds for dismissal and shall be given an opportunity to state his or her opinions at the general meeting or the board of delegates' meeting.

[This Article Added on Mar. 10, 2026]

Article 111(Business) #

An item cooperative shall conduct all or some of the following businesses in order to achieve its objectives: <Amended on Mar. 31, 2011; Mar. 23, 2013; Dec. 31, 2014; Dec. 27, 2016>

1. Education and support

a. Education and support for joint shipment and sale of agricultural or livestock products produced by its members;

b. Counseling, education and training for improving productivity and management capabilities;

c. Collection and provision of information required by its members;

d. Operation of demonstration fields, nurseries, breeding farms, and research centers for the development, dissemination of new varieties and the spread of technology;

e. Education and publicity on livestock breeding, disease control, medical treatment and safety of livestock products (limited to item cooperatives of the livestock industry);

f. Support for informatization of rural communities and farmers;

g. Education and support for persons returning to farming and rural communities in their agricultural management and settlement into rural life;

h. Other education and public relations in relation to the conduct of businesses;

2. Economic business

a. Manufacture, processing, sale, export, etc. of agricultural or livestock products produced by members;

b. Distribution control and stockpiling of agricultural or livestock products produced by members;

c. Purchase, manufacture, processing, and supply of materials necessary for members' business and life;

d. Operation of common-use facilities and leasing of equipment necessary for members' business or life;

e. Entrusted farming or entrusted livestock farming;

f. Arranging and providing labor;

g. Storage business;

h. Creating, supporting, and guiding the economic business of members and invested corporations;

3. Deleted; <Mar. 31, 2011>

4. Operation of medical assistance projects and welfare facilities for members;

5. Exchange and cooperation with other economic, social, and cultural organizations;

6. Businesses entrusted by the State, public organizations, the National Federation, the NongHyup Agribusiness Group and its subsidiaries, the NongHyup Bank, or other cooperatives;

7. Businesses prescribed by other statutes or regulations as those of an item cooperative;

8. Incidental businesses related to the businesses listed in subparagraphs 1 through 7;

9. Other businesses approved by the Minister of Agriculture, Food and Rural Affairs, which are necessary to achieve the objectives of establishment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 112(Provisions applicable mutatis mutandis) #

(1) The provisions of Articles 14(2), 15 through 18, 19(2) and (5), 20, 21, 21-3, 22 through 24, 24-2, 25 through 28 (excluding paragraph (2) of the same Article), 29 through 44, 44-2, 45 through 49, 49-2, 50, 50-2, 50-3, 51 through 53, 55, 56, 57(2) through (7), 57-2, 58 through 60, 62 through 65, 65-2, 66 through 75, 75-2, 76, 77, 79 through 95, and 97 through 102 shall apply mutatis mutandis to item-specific cooperatives. In such cases, "regional agricultural cooperative" shall be deemed "item-specific cooperative"; "agricultural products" shall be deemed "agricultural products or livestock products"; in Article 24-2(3), "Article 57(1)2" shall be deemed "subparagraph 2 of Article 111"; in Article 28(5), "Article 19(1)" shall be deemed "Article 110(1)"; in Article 30(1)1-2, "Article 57(1)2" shall be deemed "subparagraph 2 of Article 111"; in Article 41(1)3, "Article 54(1)" shall be deemed "Article 110-2(1)"; in Article 45(5), "shall be elected" shall be deemed "shall be elected by a method determined by the articles of incorporation from among the method of election, the method of election by the meeting of representatives, and the method of election by the board of directors from among the directors"; in Article 46(4)5, "Article 54(2)3" shall be deemed "Article 110-2(2)3"; in Article 49(1)12, "Article 57(1)" shall be deemed "Article 111"; in Article 51(4), "Article 45(5)" shall be deemed "the method by which members directly elect by voting at or outside a general meeting and the method of election by the meeting of representatives"; in Article 57(2), "paragraph (1)" shall be deemed "Article 111"; in Article 57(3), "paragraph (1)3" shall be deemed "Article 78(4) (including cases where it applies mutatis mutandis under Article 107(1))"; in Article 57(4), "paragraph (1)7" shall be deemed "subparagraph 6 of Article 111"; in the former part of the matter preceding the subparagraphs of Article 57(5), "paragraph (1)" shall be deemed "Article 111"; in Article 57(5)2, "paragraph (1)2" shall be deemed "subparagraph 2 of Article 111"; in Article 57(6), "paragraph (1)" shall be deemed "Article 111"; in the proviso to Article 58(1), "items a (excluding sales business by a person who is not a farmer), f, g, and j of Article 57(1)2, items e, g, and h of subparagraph 3, items a and b of subparagraph 5, and subparagraphs 7 and 10" shall be deemed "items a (excluding sales business by a person who is not a farmer), e, and g of subparagraph 2 of Article 111, subparagraph 4 (only applicable to the operation of welfare facilities), and subparagraphs 6 and 9"; in Article 59(2)1, "contract farming business" shall be deemed "contract farming business or contract shipment business"; in Article 67(3), "Article 57(1)1" shall be deemed "subparagraph 1 of Article 111"; and in Article 80, "merger, division, or organizational change" shall be deemed "merger or division". <Amended on Mar. 31, 2011; Dec. 27, 2016; Jan. 23, 2024; Mar. 10, 2026>

(2) Article 147 shall apply mutatis mutandis to preferential investment in an item cooperative. In such cases, "National Federation" shall be construed as "item cooperative", and "Article 117" in Article 147(2) and (4) shall be construed as "Article 21 applied mutatis mutandis pursuant to Article 112(1)". <Amended on Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-2(Purpose) #

The purpose of a joint business corporation of cooperatives is to contribute to strengthening the competitiveness of agriculture and promoting the interests of farmers by revitalizing projects related to the sale, distribution, etc. of agricultural products or livestock products based on joint business execution.

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-3(Legal personality and name) #

(1) A joint business corporation of cooperatives established under this Act shall be a juristic person.

(2) A joint business corporation of cooperatives shall use the name of the joint business corporation of cooperatives with the name of the region or business in its name.

(3) No person, other than a joint business corporation of cooperatives established under this Act, shall use the name referred to in paragraph (2) or any other name similar thereto.

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-4(Qualifications of members) #

(1) The members of a joint business corporation of cooperatives shall be cooperatives, the National Federation, the NongHyup Agribusiness Group and its subsidiaries (limited to subsidiaries related to the relevant business; hereafter the same shall apply in this Chapter), agricultural partnerships under Article 16 of the Act on Fostering and Supporting Agricultural and Fisheries Business Entities, agricultural companies under Article 19 of that Act, and its associate members shall be other joint business corporations of cooperatives. <Amended on Dec. 31, 2014>

(2) A person intending to become a member of a joint business corporation of cooperatives shall make an investment, as prescribed by the articles of association, and a joint business corporation of cooperatives may require its associate members to pay membership fees and expenses, as prescribed by the articles of association; provided, the total amount of investments made by non-members shall be less than 50/100 of the total amount of investments in the joint business corporation of cooperatives (30/100 in the case of the National Federation, the NongHyup Agribusiness Group and its subsidiaries combined). <Amended on Dec. 31, 2014>

(3) A member shall have voting rights in proportion to the amount of his or her investment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-5(Authorization for establishment) #

(1) In order to establish a joint business corporation of cooperatives, 2 or more cooperatives shall prepare the articles of association as promoters and obtain authorization from the Minister of Agriculture, Food and Rural Affairs after resolution by the inaugural general meeting. <Amended on Mar. 23, 2013>

(2) The standards and procedures necessary for authorization under paragraph (1), such as equity investments, etc., shall be prescribed by Presidential Decree.

(3) Article 15(2) through (6) shall apply mutatis mutandis to the authorization for establishment of a joint business corporation of cooperatives. <Amended on Oct. 31, 2017>

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-6(Matters to be stated in articles of association) #

(1) The articles of association of a joint business corporation of cooperatives shall include the following matters:

1. Objectives;

2. Name;

3. Location of the principal office;

4. Eligibility of members, and matters relating to membership subscription, withdrawal, and expulsion;

5. Matters concerning equity investments, membership fees, and expenses;

6. Rights and obligations of members;

7. Matters concerning appointment and dismissal of executive officers;

8. Matters concerning types of business and execution thereof;

9. Matters concerning types of reserves and methods of accumulation;

10. Matters concerning appropriation of surplus earnings and losses;

11. Other matters prescribed by this Act to be determined by the articles of association.

(2) Where a joint business corporation of cooperatives intends to amend its articles of association, it shall obtain authorization from the Minister of Agriculture, Food and Rural Affairs; provided, where it intends to amend its articles of association in accordance with the example of articles of association prescribed and publicly notified by the Minister of Agriculture, Food and Rural Affairs, it need not obtain authorization from the Minister of Agriculture, Food and Rural Affairs. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-7(Executive officers) #

A joint business corporation of cooperatives shall have at least 2 directors, including one chief executive officer, and at least one auditor as its executive officers, and the fixed number and term of office shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-8(Business) #

A joint business corporation of cooperatives shall conduct all or some of the following businesses in order to achieve its objectives: <Amended on Mar. 31, 2011; Dec. 31, 2014; Dec. 27, 2016>

1. Joint purchase of goods and joint sale of products for members, and transportation, storage and processing businesses incidental thereto;

2. Adjustment of production and distribution of products and development and dissemination of technology for members;

3. Arranging loans for members and borrowing funds from the State, public organizations, the National Federation, the NongHyup Agribusiness Group and its subsidiaries, or the NongHyup Bank for joint business;

4. Businesses entrusted by the State, public organizations, a cooperative, the National Federation, the NongHyup Agribusiness Group and its subsidiaries, the NongHyup Bank, or another joint business corporation of cooperatives;

5. Other businesses prescribed by the articles of association to promote the common interests of members.

[This Article Wholly Amended on Jun. 9, 2009]

Article 112-9(Special cases concerning merger of joint business corporation of cooperatives) #

(1) A joint business corporation of cooperatives may merge with a subsidiary of the National Federation or a subsidiary of the NongHyup Agribusiness Group to revitalize its economic business.

(2) In cases falling under paragraph (1), Articles 522(1), 522-2, 522-3(1), 527-5(1) and (3), and 528 through 530 of the Commercial Act shall apply mutatis mutandis to a joint business corporation of cooperatives. In such cases, "company", "general meeting of shareholders", and “shareholders” in Articles 522(1) and 527-5(1) shall be respectively construed as "joint business corporation of cooperatives", "general meeting", and "members"; "each company" in Article 522-2(1)3 as "each joint business corporation of cooperatives and company"; "may claim the purchase of stocks" in Article 522-3(1) as “may claim refund of equity interests”; "location of its principal office", “location of branch office” and "company dissolved due to a merger" in Article 528 respectively as "location of its main office", "location of its branch office" and "joint business corporation of cooperatives dissolved due to a merger"; and "each company” and “shareholders” in Article 529 respectively as “joint business corporation of cooperatives” and “members”.

[This Article Added on Dec. 31, 2014]

[Previous Article 112-9 moved to Article 112-10 <Dec. 31, 2014>]

Article 112-10(Accounting standards) #

The accounting standards for a joint business corporation of cooperatives shall be determined and publicly notified by the Minister of Agriculture, Food and Rural Affairs. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

[Moved from Article 112-9; previous Article 112-10 moved to Article 112-11 <Dec. 31, 2014>]

Article 112-11(Provisions applicable mutatis mutandis) #

With respect to cooperative joint business corporations, Articles 14 (2), 17, 18, 21, 22 through 24, 25, 27, 29, 30 (excluding paragraph (1) 1-2), 31 through 40, 43 (excluding paragraph (3)6-2, 11, and 12), 47, 52, 53, 55, 62, 65, 67 (1), (2) and (4), 68 (1) and (2), 69, 70 (excluding subparagraph 2), 71 through 74, 82 through 94, and 97 through 102 shall apply mutatis mutandis. In such cases, "local agricultural cooperative" shall be construed as "cooperative joint business corporation", "president of a cooperative" as "chief executive officer", "member of a cooperative" as "member", "Article 15 (1)" in Article 17 (1) as "Article 112-5 (1)", "... member or a family member living with the member (in cases of a corporation or an association under Article 19 (2) or (3), referring to its members, such as members and employees), and the agent may act for only one member" in Article 27 (2) as "... member and may act according to the number of voting rights", "Dissolution, division, or reorganization into an item cooperative" in Article 35 (1) 2 as "dissolution", "... shall be held with the attendance of a majority of cooperative members and ... the concurrent vote of a majority of those present" in the main clause of Article 38 (1) as "... shall be held with the attendance of members representing a majority of voting rights and ..... the concurrent vote of members representing a majority of voting rights", "the attendance of a majority of cooperative members and with the concurrent vote of at least 2/3 of those present" in the proviso of Article 38 (1) as "the attendance of members representing a majority of voting rights and the concurrent vote of members representing 2/3 of voting rights", "a majority of the members are present and at least 2/3 of the members present vote in favor" in the proviso of Article 39 (1) as "the members representing a majority of voting rights are present and the members present representing 2/3 of voting rights vote in favor", "5 persons" in Article 40 (2) as "2 persons", "another cooperative" in Article 52 (3) as "another cooperative joint business corporation", and "legal reserves, caryovers" in Article 68 (2) as "legal reserves". <Amended on Mar. 31, 2011; Jan. 23, 2024; Mar. 10, 2026>

(2) Article 147 shall apply mutatis mutandis to preferential investment in a joint business corporation of cooperatives. In such cases, "National Federation" shall be construed as "joint business corporation of cooperatives", and "Article 117" in Article 147(2) and (4) shall be construed as "Article 21 applied mutatis mutandis pursuant to Article 112-11(1)". <Amended on Dec. 31, 2014; Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

[Moved from Article 112-10 <Dec. 31, 2014>]

Article 113(Purpose) #

The purpose of the National Federation is to promote the common interests of its members and the sound development thereof.

[This Article Wholly Amended on Jun. 9, 2009]

Article 114(Office and business area) #

(1) The National Federation shall have its principal office in Seoul Special Metropolitan City and may have branch offices in accordance with the standards and procedures prescribed by its articles of association.

(2) The National Federation shall provide nationwide coverage, and shall not establish another National Federation.

[This Article Wholly Amended on Jun. 9, 2009]

Article 115(Members) #

(1) The National Federation shall be composed of local cooperatives, item cooperatives, and the federation of item cooperatives under Article 138.

(2) Upon receipt of an application for membership of a cooperative established with authorization from the Minister of Agriculture, Food and Rural Affairs or a federation of item cooperatives under Article 138, the National Federation shall approve membership within 60 days from the date of receiving an application; provided, it may choose not to do so in any of the following cases: <Amended on Mar. 23, 2013>

1. An insolvent cooperative under subparagraph 3 of Article 2 of the Act on Restructuring of Agricultural Cooperatives and a cooperative that meets the standards for a prospective insolvent cooperative under subparagraph 4 of that Article;

2. Where 2 years have not elapsed since a cooperative or the federation of item cooperatives under Article 138 was expelled pursuant to subparagraph 2 of Article 123;

3. Other cooperatives that meet the standards prescribed by Presidential Decree and are highly likely to harm the development of the National Federation and its members; in such cases, the consent of the Minister of Agriculture, Food and Rural Affairs shall be obtained.

[This Article Wholly Amended on Jun. 9, 2009]

Article 116(Associate members) #

The National Federation may have joint business corporations of cooperatives under Article 112-3, and organizations or corporations related to agriculture or rural communities as associate members, as prescribed by its articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 117(Investment) #

(1) A member shall make an investment in at least the number of units prescribed by the articles of association.

(2) The amount of one unit of investment shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 118(Ipso facto withdrawal) #

Where a member is dissolved or goes bankrupt, the member shall naturally withdraw from membership.

[This Article Wholly Amended on Jun. 9, 2009]

Article 119(Liability of members) #

The liability of a member of the National Federation shall be limited to the amount of its investment.

[This Article Wholly Amended on Jun. 9, 2009]

Article 120(Matters to be stated in articles of association) #

(1) The articles of association of the National Federation shall include the following matters: <Amended on Mar. 31, 2011>

1. Purpose, name and business area;

2. Location of the principal office;

3. Matters concerning investment;

4. Matters concerning preferential investment;

5. Matters concerning membership subscription and withdrawal;

6. Matters concerning the rights and obligations of members;

7. Matters concerning the general meeting and the board of directors;

8. Matters concerning executive officers, executives, and executive employees other than the executives (hereinafter referred to as "general executive employees");

9. Matters concerning types of business and execution of business affairs;

10. Matters concerning the operation of the independent business unit system, including accounting and profit and loss separation;

11. Matters concerning the imposition of expenses and collection of administrative fines;

12. Matters concerning the issuance of agricultural financial bonds;

13. Matters concerning accounting;

14. Matters concerning methods of public announcement.

(2) Amendments to the articles of association of the National Federation shall be subject to a resolution of the general meeting and authorization by the Minister of Agriculture, Food and Rural Affairs. <Amended on Mar. 31, 2011; Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 121(Establishment and dissolution) #

(1) In order to establish the National Federation, at least 15 cooperatives shall prepare the articles of association as promoters and obtain authorization from the Minister of Agriculture, Food and Rural Affairs after resolution by the inaugural general meeting. <Amended on Mar. 23, 2013>

(2) Where authorization is granted under paragraph (1), the cooperatives shall be required to make equity investments in accordance with Article 17.

(3) The dissolution of the National Federation shall be prescribed separately by other statutes.

[This Article Wholly Amended on Jun. 9, 2009]

Article 122(General meeting) #

(1) The National Federation shall have a general meeting.

(2) A general meeting shall be comprised of the Chairperson and members, and convened by the Chairperson.

(3) The Chairperson shall preside over a general meeting.

(4) An ordinary general meeting shall be convened once a year at the time prescribed by the articles of association, and an extraordinary general meeting shall be convened whenever necessary.

(5) The National Federation members shall exercise 1 to 3 voting rights at the general meeting, as prescribed by the articles of association, in accordance with the standards prescribed by Presidential Decree, such as the number of members of the relevant cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 123(Matters subject to resolution of general meeting) #

The following matters shall be subject to resolution by a general meeting:

1. Modification of the articles of association;

2. Expulsion of members;

3. Election and dismissal of executive officers and chairperson of the audit committee for cooperatives;

4. Approval of business plans, balance budget, and settlement of accounts;

5. Other matters deemed necessary by the board of directors or the Chairperson.

[This Article Wholly Amended on Jun. 9, 2009]

Article 123-2(Holding of general meeting and resolution) #

(1) Except as provided in this Act, a general meeting of the National Federation shall be held with the attendance of members representing a majority of the total voting rights, and a resolution shall be passed with the concurring vote of a majority of the members present.

(2) The matters referred to in subparagraphs 1 and 2 of Article 123 shall be decided on by the attendance of members representing a majority of the total voting rights and the concurring vote of at least 2/3 of the members present.

[This Article Wholly Amended on Jun. 9, 2009]

Article 124(Board of delegates) #

(1) The National Federation shall have a board of delegates in lieu of a general meeting; provided, this shall not apply to a general meeting for the election of the Chairperson under Article 130(1) and a general meeting for the dismissal of executive officers under Article 161 which applies mutatis mutandis to Article 54(1). <Amended on Apr. 13, 2021>

(2) The number of delegates shall be prescribed by the articles of association in consideration of the number of members, the scale of the economic business, etc., which shall not exceed 1/3 of the members, and the representativeness of member local cooperatives and item cooperatives shall be guaranteed.

(3) The term of office of delegates shall be prescribed by the articles of association.

(4) Delegates shall be elected by direct vote of members, as prescribed by the articles of association, and the number of voting rights per member to elect a delegate shall be the same as the number of voting rights under Article 122(5).

(5) A delegate shall exercise one voting right at the board of delegates, and details concerning the operation, etc. of the board of delegates shall be prescribed by the articles of association.

(6) Article 123-2 shall apply mutatis mutandis to the opening and resolution of the board of delegates.

[This Article Wholly Amended on Jun. 9, 2009]

Article 125(Board of directors) #

(1) The National Federation shall have a board of directors.

(2) The board of directors shall be comprised of directors, including the following persons, and at least 1/2 of its members shall be the presidents of member cooperatives (hereinafter referred to as the "president of a member cooperative"): <Amended on Mar. 31, 2011>

1. Chairperson;

2. Deleted; <Dec. 27, 2016>

3. Deleted. <Dec. 27, 2016>

4. A chief mutual finance officer;

5. A managing director.

(3) At least 1/3 of the directors who are the presidents of member cooperatives under paragraph (2) shall be the heads of item cooperatives.

(4) The board of directors shall pass resolutions on the following matters: <Amended on Mar. 31, 2011; Dec. 27, 2016>

1. Setting management goals of the National Federation;

2. Comprehensive adjustment of business plans and funding plans of the National Federation;

3. Enacting, amending, or repealing regulations regarding the organization, management, and executive officers of the National Federation;

4. The lowest percentage or amount of surplus funds deposited by cooperatives with the National Federation;

5. Matters concerning recommendation for dismissal of a chief mutual finance officer and managing director (hereinafter referred to as "business unit-specific chief executive officers, etc.);

6. Matters concerning the composition of the personnel recommendation committee under Article 125-5;

7. Matters concerning the composition of the education committee under Article 125-6;

8. Matters concerning the acquisition and disposal of important assets of the National Federation;

9. Matters concerning risk management for business affairs of the National Federation;

10. Matters concerning the appointment of candidates (excluding those for the audit committee members) recommended pursuant to Article 125-5(1);

11. Matters concerning evaluation of performance in the business under the jurisdiction of the business unit-specific chief executive officers, etc.;

11-2. Matters concerning the formulation of development plans for members;

12. Matters mandated by the general meeting;

13. Other matters deemed necessary by the Chairperson or at least 1/3 of directors.

(5) The board of directors shall supervise the business execution of the Chairperson, the business unit-specific chief executive officers, etc. with respect to the matters resolved pursuant to paragraph (4).

(6) The board of directors may require executives to attend and state their opinions. <Amended on Mar. 10, 2026>

(7) Matters necessary for the operation of the board of directors shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 125-2(Sub-board of directors for mutual finance) #

(1) In order to promote expertise and efficiency in the operation of the board of directors, a sub-board of directors shall be established in the business section under the jurisdiction of the chief mutual finance officer. <Amended on Mar. 31, 2011; Dec. 27, 2016>

(2) The sub-board of directors shall be comprised of the chief mutual finance officer and directors and chaired by the chief mutual finance officer; and at least 1/4 of its members shall be directors who are not the presidents of member cooperatives. <Amended on Dec. 27, 2016>

(3) The sub-board of directors shall pass resolutions on matters mandated by the board of directors among the matters regarding the following:

1. Establishment of management goals for the business affairs under jurisdiction;

2. Business plans and funding plans for business affairs under jurisdiction;

3. Organizations related to business affairs under jurisdiction and operation of such affairs;

4. Acquisition and disposal of important assets related to business affairs under jurisdiction;

5. Risk management for business affairs under jurisdiction.

(4) A majority of the members of the sub-board of directors shall constitute a quorum, and any decision thereof shall require the concurring vote of at least a majority of those present.

(5) The sub-board of directors shall notify each of the directors under Article 125(2) of the resolutions. In such cases, each director so notified may request that a meeting of the board of directors be held, and the board of directors may resolve again on the matters resolved by the sub-board of directors.

(6) The sub-board of directors shall supervise the chief mutual finance officer in his or her execution of business affairs with respect to the matters resolved pursuant to paragraph (3) (excluding those resolved again by the board of directors pursuant to the latter part of paragraph (5)). <Amended on Dec. 27, 2016>

(7) The sub-board of directors may require executives to attend and state their opinions. <Amended on Mar. 10, 2026>

(8) Matters necessary for the operation of the sub-board of directors shall be prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

[Title Amended on Dec. 27, 2016]

Article 125-3 #

Deleted. <Jun. 9, 2009>

Article 125-4(Internal control standards) #

(1) In order to comply with statutes or regulations and the articles of association and to protect users of the National Federation, the National Federation shall establish basic procedures and standards to be observed by its executive officers and employees when performing their duties (hereinafter referred to as "internal control standards").

(2) The National Federation shall appoint at least one person to inspect whether the internal control standards are complied with and to investigate and report violations of the internal control standards to the audit committee (hereinafter referred to as "compliance officer").

(3) A compliance officer shall be appointed and dismissed by the Chairperson from among persons who meet the qualification requirements prescribed by Presidential Decree, subject to resolution by the board of directors.

(4) To ascertain the adequacy of the internal control standards, the National Federation shall regularly inspect the status of their operation at least once each year, as prescribed by Presidential Decree. <Added on Mar. 10, 2026>

(5) Where any matters requiring improvement are identified as a result of the inspection under paragraph (4), the National Federation shall reflect such matters in the internal control standards. <Added on Mar. 10, 2026>

(6) Detailed matters regarding the internal control standards and the compliance officer shall be prescribed by Presidential Decree. <Amended on Mar. 10, 2026>

[This Article Wholly Amended on Jun. 9, 2009]

Article 125-5(Personnel recommendation committee) #

(1) A personnel recommendation committee (hereafter in this Article referred to as the "Committee") shall be established in the board of directors to recommend the following persons: <Amended on Mar. 10, 2026>

1. Business unit-specific chief executive officers, etc. elected under Article 130(2);

2. Directors elected under Article 130(4);

3. Audit committee members elected under Article 129(3);

4. The chairperson of the audit committee for cooperatives elected under Article 144(1).

(2) Where a person falling under any of the subparagraphs of paragraph (1) (hereinafter referred to as "director, etc." in this Article) becomes vacant due to expiration of term, resignation, or other reasons and it is necessary to elect a new director, etc., the board of directors shall without delay organize a committee composed of the persons falling under the following subparagraphs as its members, and the chairperson shall be elected from among the members referred to in subparagraph 2: <Amended on Apr. 13, 2021; Mar. 10, 2026>

1. Three presidents of member cooperatives commissioned by the board of directors;

2. Four persons commissioned by the board of directors from among outside experts (excluding public officials) with extensive knowledge and experience recommended by farmers' organizations, academic circle, etc.

(3) An agricultural organization may recommend candidates for directors under Article 1(1)2 from among external experts with extensive knowledge and experience to the Committee. <Amended on Mar. 10, 2026>

(4) The term of office of the chairperson and members shall run from the date of the organization of the committee until the director, etc. whose vacancy caused the organization of the committee under paragraph (2) is elected. <Added on Mar. 10, 2026>

(5) The committee shall be convened by the chairperson; provided, the first meeting held after the organization of the committee shall be convened by the eldest member among the members. <Added on Mar. 10, 2026>

(6) The Committee shall adopt resolutions by the affirmative vote of a majority of the incumbent members. <Added on Mar. 10, 2026>

(7) A member shall not exercise voting rights with respect to a resolution recommending himself or herself as a director, etc. <Added on Mar. 10, 2026>

(8) The committee shall publicly recruit candidates to be recommended as directors, etc.; provided, if special grounds prescribed by the articles of incorporation exist, public recruitment may be omitted. <Added on Mar. 10, 2026>

(9) The committee may entrust the duties concerning the public recruitment under paragraph (8) to a specialized institution. <Added on Mar. 10, 2026>

(10) With respect to the proceedings of the Committee, minutes stating the course and results thereof shall be prepared, and the chairperson and the members present shall affix their names and seals or sign thereon. <Added on Mar. 10, 2026>

(11) Other matters necessary for the organization and operation of the Committee shall be prescribed by the articles of incorporation. <Amended on Mar. 10, 2026>

[This Article Added on Jun. 9, 2009]

Article 125-6(Education committee) #

(1) An education committee shall be established under the jurisdiction of the board of directors to formulate and operate a plan for educational affairs under Article 134(1)1b. <Amended on Dec. 27, 2016>

(2) The education committee shall be comprised of not more than 7 members, including the chairperson, and shall include representatives of farmers' organizations and academic circles.

(3) The education committee shall report the current status, etc. of the formulation and operation of the educational plan under paragraph (1) to the board of directors and take measures in accordance with the resolution of the board of directors. <Amended on Dec. 27, 2016>

(4) Other matters necessary for the composition, operation, etc. of the education committee shall be prescribed by the articles of association.

[This Article Added on Jun. 9, 2009]

Article 126(Executive officers) #

(1) The National Federation shall have not more than 28 directors, including one Chairperson, one chief mutual finance officer and one managing director, and 5 members of the audit committee, as its executive officers. <Amended on Mar. 31, 2011; Dec. 27, 2016>

(2) Among the executive officers referred to in paragraph (1), a chief mutual finance officer, a managing director, and the chairperson of the audit committee shall serve as standing executive officers. <Amended on Mar. 31, 2011; Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

Article 127(Chairperson’s duties) #

(1) The Chairperson shall represent the National Federation; provided, this shall not apply to the business affairs represented by the business unit-specific chief executive officers, etc. pursuant to paragraphs (3) and (4) or by the chairperson of the audit committee for cooperatives pursuant to paragraph (6). <Amended on Dec. 27, 2016; Apr. 13, 2021>

(2) The Chairperson shall handle external activities to promote the rights and interests of member cooperatives and their members. <Amended on Apr. 13, 2021>

(3) A chief mutual finance officer shall take exclusive charge of the following business affairs and represent the National Federation in connection with the affairs: <Added on Dec. 27, 2016>

1. Mutual finance-related business and businesses incidental thereto, among the businesses referred to in Article 134(1)4 and 5 through 9;

2. The following affairs concerning the business affairs under his or her jurisdiction as prescribed in subparagraph 1:

a. Setting management goals;

b. Formulating business plans and funding plans;

c. Formulating plans for education and financial support.

(4) A managing director shall take exclusive charge of the following business affairs and represent the National Federation in connection with the affairs: <Added on Dec. 27, 2016; Apr. 13, 2021>

1. Businesses related to education and support and those incidental thereto, among the businesses listed in Article 134(1)1a through f and h through k;

2. The following affairs concerning the business affairs under his or her jurisdiction as prescribed in subparagraph 1:

a. Setting business goals;

b. Formulating business plans and funding plans;

3. Consultation and coordination on business affairs that are common to the business unit-specific chief executive officers, etc., among the matters resolved by the board of directors under Article 125(4)2;

4. Other business affairs not belonging to the duties of the Chairperson, the business unit-specific chief executive officers, etc. and the chairperson of the audit committee for cooperatives.

(5) The business affairs under the jurisdiction of the business unit-specific chief executive officers, etc. under paragraphs (3) and (4) shall be operated as an independent business unit system, as prescribed by the articles of association. <Added on Dec. 27, 2016>

(6) The chairperson of the audit committee for cooperatives shall handle the affairs relating to the audit of members under Article 134(1)1g and businesses related the audit of members and those incidental thereto, among the businesses listed in subparagraphs 5 through 9 of that paragraph, and shall represent the National Federation with respect to such affairs. <Added on Apr. 13, 2021>

(7) Where it is impossible for the Chairperson or the business unit-specific chief executive officers, etc. to perform the duties prescribed in paragraphs (1) through (4) of this Article on the grounds specified in Article 46(4)1, 2, 4, and 6, a director prescribed by the articles of association shall act on his or her behalf. <Amended on Dec. 27, 2016; Apr. 13, 2021>

[This Article Wholly Amended on Jun. 9, 2009]

[Title Amended on Dec. 27, 2016]

Article 128 #

Deleted. <Dec. 27, 2016>

Article 129(Audit committee) #

(1) The National Federation shall establish an audit committee to audit its property and business execution status.

(2) The audit committee shall be comprised of 5 members, including the chairperson of the audit committee, the term of office of which shall be 3 years, and 3 members of the audit committee shall be elected from among external experts who meet the requirements prescribed by Presidential Decree; provided, external experts who have worked as executive officers and employees, other than the audit committee members of the National Federation, at a cooperative, the National Federation and its subsidiaries (including second-tier subsidiaries) within the latest 3 years shall not serve as its members. <Amended on Apr. 13, 2021>

(3) The members of the audit committee shall be elected at a general meeting from among persons recommended by the personnel recommendation committee.

(4) The chairperson of the audit committee shall be elected from among the audit committee members who are external experts. <Amended on Dec. 27, 2016>

(5) Articles 46 (7) through (9) and 47 shall apply mutatis mutandis to the audit committee. In such cases, "auditor" in Article 46(7) shall be construed as "audit committee", "president of a cooperative" as the "Chairperson", "auditor" in Article 46(8) as "audit committee member", "auditor" and "board of directors" respectively as "audit committee member", "board of directors or sub-board of directors" in Article 46(8) as "audit committee", "auditor" in Article 46(9) as "audit committee", "president of a cooperative or director" and "auditor" in Article 47(1) as "director" and "audit committee", and "president of a cooperative or director" in Article 47(2) as "director", respectively.

(6) Matters necessary for the operation, etc. of the audit committee shall be prescribed by the articles of association.

[This Article Added on Jun. 9, 2009]

Article 130(Election and term of office of executive officers) #

(1) The Chairperson shall be elected at a general meeting, and he or she shall be a member of a member cooperative. In such cases, notwithstanding Article 122(5), a member cooperative shall exercise up to 2 votes in accordance with the standards prescribed by Presidential Decree, such as the number of members. <Amended on Apr. 13, 2021>

(2) Business unit-specific chief executive officers, etc. shall be elected at a general meeting, following recommendation by the personnel recommendation committee and resolution of the board of directors, from among persons with extensive expertise and experience in the respective business unit under Article 127(3) and (4) who also meet the requirements prescribed by Presidential Decree. <Amended on Dec. 27, 2016>

(3) Directors who are the presidents of member cooperatives shall be elected at a general meeting as recommended in accordance with the procedures prescribed by the articles of association, from among the representatives of local agricultural cooperatives at City/Do level and the presidents of local livestock cooperatives and item cooperatives elected in accordance with the procedures prescribed by the articles of association.

(4) Directors other than those referred to in paragraphs (1) through (3) shall be elected at a general meeting following recommendation by the personnel recommendation committee and resolution by the board of directors, from among persons who meet the requirements prescribed by Presidential Decree. <Amended on Dec. 27, 2016>

(5) The Chairperson shall serve for 4 years, and shall not be reappointed.

(6) The term of office of the directors who are the presidents of member cooperatives shall be 4 years, that of business-unit specific chief executive officers, etc. shall not exceed 3 years, and that of other executive officers (excluding audit committee members) shall be 2 years. <Amended on Dec. 27, 2016>

(7) When the president of a member cooperative is elected as a standing executive officer under Article 126(2), he or she shall resign before taking office.

(8) The National Federation shall entrust the National Election Commission established under the Election Commission Act with the management of the election of the Chairperson under paragraph (1), as prescribed by the articles of association.

(9) Deleted. <Jun. 11, 2014>

(10) Deleted. <Jun. 11, 2014>

(11) No one shall conduct an election campaign in the case of the election of executive officers other than the Chairperson. <Added on Mar. 31, 2011; Jun. 11, 2014>

[This Article Wholly Amended on Jun. 9, 2009]

Article 131(Appointment and dismissal of executives and employees) #

(1) The National Federation shall have executive secretaries to assist in the duties of business unit-specific chief executive officers, etc., the title, duties, and other details of which shall be prescribed by the articles of association.

(2) The term of office of executives shall be 2 years.

(3) The executive secretaries to assist in the duties prescribed in Article 127(3) and (4) shall be appointed and dismissed by the respective business unit-specific chief executive officers, etc. for individual business sections under their jurisdiction. <Amended on Dec. 27, 2016>

(4) Employees shall be appointed and dismissed by the Chairperson, but matters concerning the promotion, transfer, and personnel exchange of employees belonging to business-unit specific chief executive officers, etc. under Article 127(3) and (4) and the chairperson of the audit committee for cooperatives under paragraph (6) of that Article shall be performed by respective business unit-specific chief executive officers, etc. and the chairperson of the audit committee for cooperatives, as prescribed by the articles of association. <Amended on Dec. 27, 2016; Apr. 13, 2021>

(5) Articles 11(1) and (3), 12, 13, and 17 of the Commercial Act and Articles 23(1), 50, and 51 of the Commercial Registration Act shall apply mutatis mutandis to executives and general executive officers. <Amended on May 20, 2014; Apr. 13, 2021>

(6) The Chairperson, the business unit-specific chief executive officers, etc., the chairperson of the audit committee for cooperatives, and the representative of the NongHyup Agribusiness Group, etc. may appoint an agent authorized to perform all judicial or extra-judicial acts concerning the business affairs of the National Federation or the NongHyup Agribusiness Group, etc. from among directors, executives or employees, respectively. <Amended on Mar. 31, 2011; Apr. 13, 2021>

[This Article Wholly Amended on Jun. 9, 2009]

Article 132 #

Deleted. <Dec. 27, 2016>

Article 133(Restrictions on engaging in other occupations) #

Standing executive officers, executives, and general executive officers shall not engage in any for-profit business affairs related to their duties; and shall not engage in any other occupation, except where approval by the board of directors is granted.

[This Article Wholly Amended on Jun. 9, 2009]

Article 134(Business) #

(1) The National Federation shall conduct all or some of the following businesses; provided, the NongHyup Agribusiness Group and its subsidiaries shall conduct businesses related to the economic business among the businesses referred to in subparagraphs 2, 3 and 5 through 9 and the NongHyup Financial Group and its subsidiaries shall conduct businesses related to the financial business among the businesses referred to in subparagraphs 4-2 and 5 through 9: <Amended on Mar. 31, 2011; Mar. 23, 2013; Dec. 27, 2016>

1. Education and support

a. Providing members with guidance in their organization and management;

b. Provision of education and training for members and employees of member cooperatives, and relevant information on the agricultural and livestock industries, etc.;

c. Survey and research on business of member cooperatives and their members and relevant promotional activities;

d. Businesses for the establishment of information networks, education on informatization and distribution thereof to improve the businesses and lives of member cooperatives and their members;

e. Funding for member cooperatives and their members and employees;

f. Operation of research centers and demonstration farms for research and development of new technologies and new varieties related to the agricultural and livestock industries;

g. Audit of members;

h. Businesses for the promotion of the rights and interests of member cooperatives and their members;

i. Medical assistance;

j. Provision of assistance and guidance to members and invested corporations;

k. Management and operation of the use of the name under Article 159-2;

2. Agricultural economic business

a. Such businesses as purchase, sales, manufacture, and processing for members;

b. Creating, supporting, and guiding the economic business of members and invested corporations;

c. Guidance on ginseng cultivation, and manufacture and inspection of ginseng varieties;

d. Revitalization and structural improvement of local distribution;

3. Livestock economic business

a. Such businesses as purchase, sales, manufacture, and processing for members;

b. Creating, supporting, and guiding the economic business of members and invested corporations;

c. Businesses related to livestock improvement, breeding, quarantine and medical treatment;

d. Revitalization and structural improvement of local distribution;

4. Mutual financial business

a. Operation and management of the repayment reserves and surplus funds of members as prescribed by Presidential Decree;

b. Providing guidance to members in the credit business;

c. Receiving and managing members' deposits and installment savings;

d. Loans to members;

e. Agency services for the State, public organizations, or financial institutions (including banks under the Banking Act and other financial institutions providing financial services; hereinafter the same shall apply);

f. Domestic and foreign exchange transactions for member cooperatives and their members;

g. Payment guarantee and bill discount for members;

h. Underwriting and sale of State bonds and local government bonds under Article 4(3) of the Financial Investment Services and Capital Markets Act;

i. Issuance and management of electronic means of direct debit payment and settlement of payments under the Electronic Financial Transactions Act;

j. Issuance and management of electronic means of prepayment and settlement of payments under the Electronic Financial Transactions Act;

4-2. Businesses of a company engaged in the financial business or closely related to the financial business under Article 2(1)1 of the Financial Holding Companies Act;

5. Projects entrusted or subsidized by the State or public organizations;

6. Businesses prescribed by other statutes or regulations as those of the National Federation;

7. Foreign trade related to the businesses listed in subparagraphs 1 through 6;

8. Incidental businesses related to the businesses listed in subparagraphs 1 through 7;

9. Except as provided in subparagraphs 1 through 8, businesses approved by the Minister of Agriculture, Food and Rural Affairs, which are necessary for achieving the objectives of the establishment of the National Federation.

(2) In order to achieve the objectives referred to in paragraph (1), the National Federation may manage funds by borrowing funds from the State, public organizations, or financial institutions or by depositing funds with financial institutions, etc. <Amended on Mar. 31, 2011>

(3) The National Federation may borrow funds or introduce materials and technologies from international organizations, foreign countries, or foreigners in order to achieve the objectives referred to in paragraph (1).

(4) The National Federation shall separate accounting from profits and losses by establishing an independent account for the affairs under the jurisdiction of the chief mutual finance officer. In such cases, it may establish a capital account in the accounting. <Amended on Mar. 31, 2011; Dec. 27, 2016>

1. Deleted; <Dec. 27, 2016>

2. Deleted; <Dec. 27, 2016>

3. Deleted. <Dec. 27, 2016>

(5) The National Federation may, if necessary to conduct the businesses specified in paragraph (1), raise and manage funds for compensation for business losses, funds for compensation for bad debts, and funds for supporting cooperatives in merger, as prescribed by its articles of association. In such cases, funds related to the econoimc business shall be operated in accordance with the plan formulated by the NongHyup Agribusiness Group. <Amended on Dec. 27, 2016; Mar. 10, 2026>

(6) Deleted; <Mar. 10, 2026>

[This Article Wholly Amended on Jun. 9, 2009]

Article 134-2 #

Deleted. <Dec. 27, 2016>

Article 134-3 #

Deleted. <Dec. 27, 2016>

Article 134-4 #

Deleted. <Dec. 27, 2016>

Article 134-5 #

Deleted. <Dec. 27, 2016>

Article 134-6(Urban-rural mutual growth project contributions) #

(1) In order to stably secure financial resources necessary for the revitalization of economic businesses and urban-rural mutual growth, an urban cooperative shall annually pay urban-rural mutual growth project contributions to the National Federation within the limit of 3/100 of the gross profit from credit business in the preceding year, as prescribed by the articles of incorporation of the National Federation.

(2) Notwithstanding paragraph (1), the National Federation may, in consideration of the management conditions of an urban cooperative, reduce or exempt all or part of the urban-rural mutual growth project contributions under paragraph (1), as prescribed by the articles of incorporation.

[This Article Added on Mar. 10, 2026]

Article 134-7(Creation and management of urban-rural mutual growth support funds) #

(1) The National Federation may create and manage urban-rural mutual growth support funds using the urban-rural mutual growth project contributions paid by urban cooperatives under Article 134-6 as a financial resource, in order to support projects promoted for the mutual growth and balanced development of urban and rural areas.

(2) The National Federation shall annually establish a plan for the creation and management of urban-rural mutual growth support funds under paragraph (1) and a plan for the mutual growth and balanced development of urban and rural areas.

(3) Urban-rural mutual growth support funds under paragraph (1) shall be used for the following projects in accordance with the plan established by the National Federation:

1. Projects jointly performed by urban cooperatives and cooperatives other than urban cooperatives;

2. Projects for mutual growth and cooperation activities between urban cooperatives and cooperatives other than urban cooperatives;

3. Other projects deemed necessary by the National Federation.

(4) Detailed matters regarding the establishment and operation of urban-rural mutual growth support funds under paragraph (1) shall be prescribed by the articles of incorporation.

[This Article Added on Mar. 10, 2026]

Article 134-8(Composition and operation of the mutual growth and cooperation committee) #

(1) A mutual growth and cooperation committee shall be established within the National Federation to deliberate and resolve on matters regarding mutual growth and cooperation between urban and rural areas.

(2) Other matters necessary for the composition and management of the mutual growth and cooperation committee under paragraph (1) shall be prescribed by the articles of incorporation.

[This Article Added on Mar. 10, 2026]

Article 135(Use of business by non-members) #

(1) The National Federation may allow non-members to use its business to the extent that it does not interfere with its members' use; provided, it may restrict non-members' use of the sales business (excluding the sales business of persons other than farmers) among the businesses referred to in Article 134(1)1 through 3 and businesses other than those listed in subparagraphs 1i, 4, 4-2, 5, 6, and 9 of that paragraph, as prescribed by the articles of association. <Amended on Mar. 31, 2011; Dec. 27, 2016>

(2) The use of the business by a member of a member cooperative shall be deemed the use of the business by such member cooperative.

[This Article Wholly Amended on Jun. 9, 2009]

Article 135-2 #

Deleted. <Dec. 27, 2016>

Article 135-3 #

Deleted. <Dec. 27, 2016>

Article 136(Creation and management of distribution support fund) #

(1) The National Federation may raise and operate a distribution support fund to ensure smoother distribution of agricultural and livestock products produced by members of member cooperatives and joint business corporations of cooperatives under Article 112-3 and the processed products thereof (hereinafter referred to as "agricultural products, etc."). <Amended on Mar. 31, 2011; Dec. 27, 2016>

(2) The distribution support fund under paragraph (1) shall be operated for the following businesses in accordance with the plan formulated by the NongHyup Agribusiness Group: <Amended on Mar. 31, 2011; Dec. 27, 2016>

1. Contract farming of agricultural products, etc.;

2. Shipment control for agricultural products, etc.;

3. Promoting the shipment of agricultural products, etc. with common standards;

4. Ensuring the minimum price of agricultural products;

5. Other sales, distribution, and processing-related businesses deemed necessary by the NongHyup Agribusiness Group.

(3) The distribution support fund under paragraph (1) shall be raised from the mutual aid fund for cooperatives under Article 136-2(1) and the agricultural support project expenses, etc. under Article 159-2. <Amended on Mar. 31, 2011; Dec. 27, 2016; Mar. 10, 2026>

(4) The State may subsidize the creation of the distribution support fund under paragraph (1) within budgetary limits. <Added on Mar. 31, 2011>

(5) Details concerning the creation and management of the distribution support fund under paragraph (1) shall be as prescribed by the Minister of Agriculture, Food and Rural Affairs. <Added on Mar. 31, 2011; Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 136-2(Establishment and operation of support funds for member cooperatives) #

(1) To perform the projects under Article 134(1), the National Federation shall establish each year a plan for the establishment and operation of support funds for member cooperatives, which includes the amount of support for each project, the selection criteria for support recipients, and the method of calculating the amount of support for each cooperative, regarding mutual support funds for cooperatives and other funds for supporting members in the form of interest support, etc. (hereinafter referred to as "support funds for member cooperatives").

(2) Support funds for member cooperatives shall be allocated according to the criteria prescribed by the articles of incorporation, including the members' performance in economic businesses.

(3) The National Federation shall establish a Fund Support Deliberative Committee to deliberate on and resolve the plan for the establishment and operation of support funds for member cooperatives under paragraph (1) and the recipients and scale of support from the support funds for member cooperatives.

(4) Other detailed matters concerning the establishment and operation of support funds for member cooperatives shall be prescribed by the articles of incorporation. <Added on Mar. 10, 2026>

[This Article Added on Mar. 10, 2026]

Article 136-3(Notice of plan for establishment and operation of support funds for member cooperatives) #

(1) The National Federation shall notify all members of the following matters regarding the support funds for member cooperatives:

1. The plan for the establishment and operation of support funds for member cooperatives under Article 136-2(1);

2. Matters prescribed by the articles of incorporation, including the scale of support for each project and each cooperative and the criteria for allocation of the support funds for member cooperatives;

3. The total annual scale of support for each project and each cooperative from the support funds for member cooperatives.

(2) Detailed matters necessary for the method and timing of the notification under paragraph (1) shall be prescribed by the articles of incorporation.

[This Article Added on Mar. 10, 2026]

Article 136-4(Evaluation and feedback of support funds for member cooperatives) #

(1) The National Federation shall conduct a performance analysis and evaluation of the support provided from the support funds for member cooperatives each year. In such cases, the performance analysis and evaluation shall be entrusted to a relevant specialized institution or organization.

(2) The National Federation shall report the results of the performance analysis and evaluation under paragraph (1) to the general meeting.

(3) The National Federation shall reflect the results of the performance analysis and evaluation under paragraph (1) in the plan for the establishment and operation of support funds for member cooperatives under Article 136-2(1).

[This Article Added on Mar. 10, 2026]

Article 137(Restrictions on investment in other corporations) #

(1) The National Federation shall not acquire stocks exceeding 15/100 of the voting stocks (including equity interests; hereafter the same shall apply in this Article) issued by other corporations; provided, this shall not apply in any of the following cases: <Amended on Mar. 31, 2011; Dec. 27, 2016>

1. Where it is necessary for conducting the projects under Article 134(1);

2. Where stocks are acquired by payout of dividends or capital increase without consideration;

3. Where stocks are acquired by conversion of loans into equity investments due to corporate restructuring, etc.;

4. Where stocks are acquired by the exercise of security rights;

5. Where stocks are acquired by participation in capital increase with consideration to the extent of existing ownership;

6. Where stocks are acquired by conversion of stock-related bonds, such as bonds with warrants, into stocks;

7. Where stocks of the NongHyup Agribusiness Group are acquired;

8. Where stocks of the NongHyup Financial Group are acquired.

(2) Where the National Federation has made investments in other corporations to conduct the businesses under Article 134(1) pursuant to paragraph (1)1, the total amount of such investments shall not exceed the equity capital calculated as prescribed by Presidential Decree, such as paid-in investments and preferential investments, etc. (hereinafter referred to as "equity capital"); provided, the limit on investments in the same corporation shall be prescribed by the articles of association not to exceed 20/100 of the equity capital. <Amended on Mar. 31, 2011>

(3) Notwithstanding paragraph (2), where the National Federation makes an investment pursuant to paragraph (1)7 and 8, it may make an investment in the amount exceeding its equity capital. In such cases, the National Federation shall report to a general meeting the purpose and status of such investment, the management status of the holding company and the subsidiaries thereof subject to investment, etc. within 3 months from the end of a fiscal year. <Added on Mar. 31, 2011>

(4) In principle, the National Federation shall make a joint investment with its members where it intends to invest in other corporations for purposes of conducting the businesses under Article 134(1)2 and 3. <Amended on Mar. 31, 2011>

[This Article Wholly Amended on Jun. 9, 2009]

Article 138(Federation of item cooperatives) #

(1) Item cooperatives may establish a federation consisting of at least 3 item cooperatives (hereinafter referred to as the "federation") for the purposes of promoting their rights and interests and developing joint business. In such cases, the federation may have local cooperatives as its members, as prescribed by the articles of association; and if the business area of the federation spans nationwide, at least 1/2 of the item cooperatives in the entire nation shall be its members.

(2) The standards for local cooperatives eligible to become members of the federation pursuant to paragraph (1), procedures for membership, etc. shall be prescribed by the articles of association.

(3) The federation shall perform all or some of the following: <Amended on Mar. 31, 2011; Dec. 27, 2016>

1. Production and distribution control and market development for members;

2. Joint purchase of goods and joint sale of products for members, and transportation, storage and processing businesses incidental thereto;

3. Product promotion, technology dissemination and information exchange among members;

4. Borrowing of funds from the State, public organizations, the National Federation, the NongHyup Agribusiness Group and its subsidiaries, and the NongHyup Bank for the arrangement of funds for members and the business of the federation;

5. Other businesses prescribed by the articles of association to promote the common interests of members.

(4) The federation to be established pursuant to paragraph (1) shall be a juristic person; in such cases, it shall prepare the articles of association, stating the following, and obtain authorization therefor from the Minister of Agriculture, Food and Rural Affairs, and the same shall also apply where it intends to amend such articles of association: <Amended on Mar. 23, 2013>

1. The purpose, name, business area, and location of its principal office;

2. Membership eligibility, subscription, and withdrawal;

3. Matters concerning investments and expenses;

4. The fixed number and election of executive officers;

5. Matters concerning the rights and obligations of members;

6. Matters concerning types of business and execution thereof.

(5) Except as provided in this Act, the provisions of the Civil Act governing incorporated associations shall apply mutatis mutandis to matters concerning the federation.

(6) The federation shall use the name of the federation with an item or type of business therein; and no person, other than that established pursuant to this Act, shall use such name or any other name similar thereto.

[This Article Wholly Amended on Jun. 9, 2009]

Article 139(Disclosure of details of use of State subsidies or loans) #

(1) The National Federation (including its subsidiaries and second-tier subsidiaries) shall disclose information prescribed by Presidential Decree, such as the details of the use of funds related to the businesses for the immediately preceding year, which have been implemented with State funds (including funds managed by the State; hereafter the same shall apply in this Article) or State subsidies or loans to cover all or part of the project expenses, by no later than April 30 of each year.

(2) The National Federation may, if necessary for the disclosure of information under paragraph (1), request cooperatives that receive subsidies or loans from the Government or conduct government projects to submit data. Upon receipt of such request, cooperatives shall comply unless there is a compelling reason not to do so.

(3) Matters necessary for the scope and methods of disclosure of information under paragraph (1) and other necessary matters shall be prescribed by Ministerial Decree of the Agriculture, Food and Rural Affairs.

[This Article Added on Dec. 31, 2014]

Article 140(Management of funds) #

(1) Deleted. <Dec. 31, 2014>

(2) Loans extended to members or farmers (including funds borrowed by a cooperative from the National Federation or the NongHyup Agribusiness Group), among the funds borrowed by the National Federation or the NongHyup Agribusiness Group from the State, shall not be subject to seizure. <Amended on Mar. 31, 2011; Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

[Title Amended on Mar. 31, 2011]

Article 141 #

Deleted. <Sep. 12, 2001>

Article 142(Guidance by National Federation) #

(1) The Chairperson may guide members as prescribed by this Act and determine regulations, guidelines, etc. necessary therefor.

(2) The Chairperson shall evaluate the management status of members and the status of implementation of the standards for economic businesses prescribed by the articles of incorporation of such members and, based on the results thereof, shall take necessary measures for the relevant member, such as requiring management improvement, recommending a merger, or requiring additional payment of expenses for urban-rural mutual growth projects (limited to urban cooperatives subject to the payment of expenses for urban-rural mutual growth projects under Article 134-6(1); provided, the total annual amount payable by an urban cooperative shall not exceed the scope prescribed by the articles of incorporation of the National Federation within 5/100 of the gross credit sales profit for the previous year). In such cases, the president of the cooperative shall publicly announce such fact without delay, notify its members thereof in writing, and report the results of the measures to the board of directors and the general meeting of the cooperative. <Amended on Dec. 27, 2016; Mar. 10, 2026>

(3) Where the Chairperson deems it necessary for the sound performance of duties of members and the protection of members of member cooperatives or third parties, he or she may request the Minister of Agriculture, Food and Rural Affairs to take any of the following measures in connection with the relevant duties: <Amended on Mar. 31, 2011; Mar. 23, 2013>

1. Modification of the articles of association;

2. Full or partial suspension of business;

3. Prohibition on deposit or disposal of property;

4. Other necessary dispositions.

[This Article Wholly Amended on Jun. 9, 2009]

Article 142-2(Supervision over subsidiaries of National Federation) #

(1) The National Federation shall guide and supervise its subsidiaries (including subsidiaries of the NongHyup Agribusiness Group and the NongHyup Financial Group; hereinafter the same shall apply) to ensure that they can contribute to the interests of members of the National Federation and those of their members when performing their duties, as prescribed by the articles of association.

(2) The National Federation may request the relevant subsidiary to take necessary measures, such as management improvement, based on the results of guidance and supervision under paragraph (1).

[This Article Added on Mar. 31, 2011]

Article 143(Audit committee for cooperatives) #

(1) In order to promote the sound development of members, an audit committee for cooperatives shall be established within the National Federation to guide and audit members' business. <Amended on Apr. 13, 2021>

(2) The audit committee for cooperatives shall be comprised of 5 members, including the chairperson, who shall serve as a standing member.

(3) In order to conduct audit and inspection affairs of the audit committee for cooperatives, a necessary organization shall be established in the committee, as prescribed by the articles of association.

[This Article Wholly Amended on Jun. 9, 2009]

Article 144(Appointment of committee members) #

(1) The chairperson of the audit committee for cooperatives shall be elected at a general meeting following a recommendation by the personnel recommendation committee and a resolution by the board of directors; provided, a person who has worked as an executive officer or employee, other than a member of the audit committee for cooperatives, at a cooperative, the National Federation or its subsidiary (including a second-tier subsidiary) within the latest 3 years shall be excluded herefrom. <Amended on Apr. 13, 2021>

(2) Members shall be appointed by the chairperson following a resolution by the board of directors from among those who have been recommended by the chairperson; provided, the president of a member cooperative shall not serve as a member. <Amended on Apr. 13, 2021>

(3) The chairperson and members referred to in paragraphs (1) and (2) shall be appointed from among persons with extensive expertise and experience in audit, accounting, or farming who also meet the requirements prescribed by Presidential Decree.

(4) The term of office of the chairperson and members shall be 3 years.

[This Article Wholly Amended on Jun. 9, 2009]

Article 145(Matters subject to resolution) #

The audit committee for cooperatives shall pass resolutions on the matters regarding the following:

1. Direction of and plans for audits of members;

2. Requests for disciplinary actions and reprimands against executive officers and employees of members based on audit findings;

3. Determination on liability for reimbursement based on audit findings;

4. Requests for correction and improvement of members;

5. Enactment, amendment, and repeal of audit regulations;

6. Requests from the chairperson;

7. Other matters deemed necessary by the chairperson.

[This Article Wholly Amended on Jun. 9, 2009]

Article 146(Audit of members) #

(1) The audit committee for cooperatives shall audit the members at least once every 2 years (3 years in the case of a cooperative with a standing auditor) in terms of their property and the status of business execution. <Amended on Dec. 31, 2014>

(2) If deemed necessary to promote the sound development of members, the audit committee for cooperatives may request an accounting corporation to conduct an audit at the expense of members.

(3) The chairperson of the audit committee for cooperatives shall notify the president of the member cooperative and its auditor of the audit findings under paragraphs (1) and (2) and may request the member to take corrective measures, suspend business, and take the following measures against the relevant executive officers and/or employees based on such audit findings: <Amended on Apr. 13, 2021>

1. Improvement, suspension of performance of duties, reprimand, or reimbursement for executive officers;

2. Dismissal from office, suspension of performance of duties, reduction of salary, reprimand, or reimbursement for employees.

(4) Where the member is requested to take measures against its executive officer or employee pursuant to paragraph (3), it shall take necessary measures within 2 months and notify the audit committee for cooperatives of the results.

(5) Where the member fails to take necessary measures within the period referred to in paragraph (4), the chairperson of the audit committee for cooperatives may again request the member to take the measures under paragraph (3) within one month; and if the member still fails to do so within the period, he or she may request the Minister of Agriculture, Food and Rural Affairs to take necessary measures. <Amended on Mar. 23, 2013; Apr. 13, 2021>

[This Article Wholly Amended on Jun. 9, 2009]

Article 147(Preferential investment) #

(1) In order to promote the soundness of management through the expansion of equity capital, the National Federation may issue preferential investment securities with priority in distribution of surplus funds, as prescribed by its articles of association.

(2) The amount of one unit of preferential investment securities under paragraph (1) shall be the same as that of one unit of investment under Article 117, and the total amount of preferential investment securities shall not exceed 1/2 of its equity capital.

(3) Voting and election rights shall not be recognized for preferential investment.

(4) Dividends from preferential investment shall be paid in preference to dividends from investment under Article 117, and the rate thereof shall be determined at a general meeting, which shall range between the lowest and highest dividend rates prescribed by the articles of association.

(5) Except as provided in paragraphs (1) through (4), matters concerning the issuance of preferential investment securities, liability of preferential investors, transfer of preferential investment, general meetings of preferential investors, and others shall be prescribed by Presidential Decree. <Added on Dec. 27, 2016>

[This Article Wholly Amended on Jun. 9, 2009]

Article 148 #

Deleted. <Dec. 27, 2016>

Article 149 #

Deleted. <Dec. 27, 2016>

Article 150 #

Deleted. <Dec. 27, 2016>

Article 151 #

Deleted. <Dec. 27, 2016>

Article 152 #

Deleted. <Dec. 27, 2016>

Article 161-2(NongHyup Agribusiness Group) #

(1) The National Federation shall establish the NongHyup Agribusiness Group for businesses related to the agricultural economy and livestock economy and the businesses incidental thereto, from among the businesses referred to in Article 134(1)2, 3, and 5 through 9. In such cases, the business separation shall be deemed a division of a company referred to in Article 530-12 of the Commercial Act, and Articles 530-3(1), (2), (4), 530-4 through 530-7, and 530-9 through 530-11 of that Act shall apply mutatis mutandis to the procedures for such business separation; and "affirmative votes of at least two thirds of the voting rights of the shareholders present at a general meeting of shareholders and of at least one third of the total number of issued and outstanding shares" in Article 434 of that Act applied mutatis mutandis under Article 530-3 of that Act shall be construed as "attendance of a majority of the delegates and concurring vote of at least 2/3 of the delegates".

(2) The NongHyup Agribusiness Group shall enhance its market competitiveness by professionally and efficiently performing businesses related to the agricultural economy and the livestock economy and businesses incidental thereto, thereby promoting the improvement of its economic status by supporting the economic activities of farmers and cooperatives, and contributing to the interests of farmers and cooperative members.

(3) Except as provided in this Act, the Commercial Act and the Monopoly Regulation and Fair Trade Act shall apply to the NongHyup Agribusiness Group.

[This Article Added on Dec. 27, 2016]

Article 161-3(Executive officers of NongHyup Agribusiness Group) #

(1) The NongHyup Agribusiness Group shall have at least 3 directors, including the chief executive officer for the agricultural economy and the chief executive officer for the livestock economy, and at least 1/4 of the total number thereof shall be outside directors.

(2) The chief executive officer for the agricultural economy or the chief executive officer for the livestock economy shall be equipped with extensive knowledge of and experience in the agricultural economic business under Article 134(1)2 or in the livestock economic business under subparagraph 3 of that paragraph, satisfying the requirements prescribed by Presidential Decree, and shall be recommended by the executive officer recommendation committee including external experts prescribed by Presidential Decree; provided, the executive officer recommendation committee for the livestock economy chief executive officer shall be comprised of the presidents of cooperatives recommended at a meeting of the presidents of local livestock cooperatives and livestock item cooperatives. In such cases, the fixed number of members of the executive officer recommendaiton committee for the livestock economy chief executive officer shall be determined not to exceed 1/5 of the total number of the presidents of local livestock cooperatives and livestock item cooperatives.

(3) The NongHyup Agribusiness Group may appoint directors who are the presidents of member cooperatives of the National Federation as its directors, within 1/2 of the total number of directors.

(4) Matters necessary for the appointment and term of office of executive officers, the composition and operation of the executive officer recommendation committee, and other matters necessary for executive officers shall be prescribed by the articles of association of the NongHyup Agribusiness Group.

[This Article Added on Dec. 27, 2016]

Article 161-4(Businesses of NongHyup Agribusiness Group) #

(1) The NongHyup Agribusiness Group and its subsidiaries shall perform the following:

1. Businesses under Article 134(1)2 and 3;

2. Businesses related to the economic business and those incidental thereto, among the businesses listed in Article 134(1)5 through 9;

3. Business affairs relating to business management of the relevant subsidiary;

4. Businesses entrusted or subsidized by the State, public organizations, cooperatives, and the National Federation;

5. Borrowing funds from the State, public organizations, the National Federation and financial institutions;

6. Funding to revitalize the economic business of cooperatives, etc.;

7. Businesses prescribed by other statutes or regulations as businesses of NongHyup Agribusiness Group and its subsidiaries;

8. Other businesses prescribed by the articles of association of the NongHyup Agribusiness Group and its subsidiaries to promote the economic business.

(2) Where the NongHyup Agribusiness Group and its subsidiaries conduct the business prescribed by Presidential Decree among the business activities referred to in paragraph (1)1 and 2, the NongHyup Agribusiness Group and its subsidiaries shall be deemed the National Federation.

[This Article Added on Dec. 27, 2016]

Article 161-5(Obligations of NongHyup Agribusiness Group and National Federation members to cooperate) #

(1) The NongHyup Agribusiness Group and its subsidiaries shall prioritize the sale, processing, and distribution of agricultural products, etc. collected from its members or members of member cooperatives or entrusted with sale in setting business goals and shall actively implement such goals.

(2) The NongHyup Agribusiness Group and its subsidiaries shall not pose an impediment to the business of members and shall preferentially perform projects for the common interests of members by means of joint investments with members or other means.

(3) Members shall faithfully use the economic business such as sale and purchase, including shipping agricultural products, etc. collected from or entrusted for sale by members of member cooperatives via the NongHyup Agribusiness Group and its subsidiaries.

(4) The NongHyup Agribusiness Group may give preferential treatment to members who faithfully use the business of the NongHyup Agribusiness Group and its subsidiaries pursuant to paragraph (3) in formulating a fund management plan or managing funds pursuant to the latter part of Article 134(5) or Article 136(2).

[This Article Added on Dec. 27, 2016]

Article 161-6(Promotion of sale of agricultural products, etc.) #

(1) In order to efficiently sell agricultural products, etc. collected from or entrusted for sale by members or members of member cooperatives, the NongHyup Agribusiness Group shall formulate an annual action plan including matters regarding the following and promote projects in accordance with such plan:

1. Securing facilities and equipment at production and consumption locations;

2. Securing sales organizations;

3. Others necessary for the business of promoting the sale of agricultural products, etc.

(2) In order to stabilize the prices of agricultural products and livestock products produced by members of member cooperatives and to stabilize their income, the NongHyup Agribusiness Group may implement measures necessary for adjusting the supply and demand, such as contract cultivation, jointly with members.

[This Article Added on Dec. 27, 2016]

Article 161-7(Evaluation of sales promotion project for agricultural products, etc.) #

(1) The Minister of Agriculture, Food and Rural Affairs shall evaluate and inspect projects for promoting sales of agricultural products, etc. conducted by the NongHyup Agribusiness Group pursuant to Article 161-6(1) at least once a year. In such cases, matters related to enhancing the benefits of cooperatives and their members and promoting mutual growth with cooperatives shall be reflected. <Amended on Mar. 10, 2026>

(2) The Minister of Agriculture, Food and Rural Affairs shall establish a Council for Evaluation of NongHyup Economic Business (hereinafter referred to as the "Council") to provide advice on the following matters; in such cases, the Minister of Agriculture, Food and Rural Affairs may take necessary measures, such as management guidance, requests for submission of data, etc. to executive officers and employees of the NongHyup Agribusiness Group, taking into consideration the details of advice provided by the Council:

1. Matters related to the evaluation and inspection of sales promotion projects for agricultural products, etc. conducted by the NongHyup Agribusiness Group;

2. Other matters deemed necessary by the Minister of Agriculture, Food and Rural Affairs.

(3) The Council shall be comprised of not more than 15 members, including the following:

1. Two representatives of farmers' organizations commissioned by the Minister of Agriculture, Food and Rural Affairs;

2. Three experts related to the distribution of agricultural products, etc. and agriculture commissioned by the Minister of Agriculture, Food and Rural Affairs;

3. Five persons designated or commissioned by the chief executive officer of the NongHyup Agribusiness Group prescribed by the articles of association (hereafter referred to as the "chief executive officer of the NongHyup Agribusiness Group" in this Article) from among the executive officers, employees, and the presidents of cooperatives under jurisdiction;

4. One person designated by the Minister of Agriculture, Food and Rural Affairs from among public officials under his or her jurisdiction from among public officials under his or her jurisdiction;

5. Three persons commissioned by the Minister of Agriculture, Food and Rural Affairs, from among those with work experience in a State agency, research institute, educational institution, or enterprise related to the agricultural or livestock industry who are commissioned by the Minister of Agriculture, Food and Rural Affairs;

6. One member commissioned by the Minister of Agriculture, Food and Rural Affairs as deemed necessary.

(4) The Minister of Agriculture, Food and Rural Affairs or the chief executive officer of the NongHyup Agribusiness Group may withdraw the designation of, or decommission, a member if he or she falls under any of the following cases:

1. Where the member becomes unable to perform the duties due to mental or physical disability;

2. Where the member has committed any corruption or illegality related to his or her duties;

3. Where the member is deemed unsuitable as a member due to neglect of duty, injury to dignity, or other reasons;

4. Where the member declares that it is difficult to perform his or her duties.

(5) Except as provided in paragraphs (2) through (4), details concerning the composition, operation, etc. of the Council shall be determined by the Minister of Agriculture, Food and Rural Affairs.

(6) The board of directors of the NongHyup Agribusiness Group shall reflect the results of the evaluation and inspection conducted under paragraph (1) in the performance evaluation of the chief executive officers of the NongHyup Agribusiness Group and its related subsidiaries.

(7) If the Minister of Agriculture, Food and Rural Affairs has conducted an evaluation and inspection under paragraph (1), the Minister shall submit the results thereof to the competent standing committee of the National Assembly without delay. <Added on Mar. 10, 2026>

[This Article Added on Dec. 27, 2016]

Article 161-8(Supervision over subsidiaries of NongHyup Agribusiness Group) #

(1) The NongHyup Agribusiness Group may guide and supervise the management status of its subsidiaries, as prescribed by the articles of association, so that they can ensure sound management in performing their business affairs and contribute to the interests of members and those of the members of member cooperatives.

(2) Matters necessary for the standards for guidance and supervision of subsidiaries shall be prescribed by Presidential Decree.

[This Article Added on Dec. 27, 2016]

Article 161-9(Guarantee of autonomy of livestock economic business) #

(1) The NongHyup Agribusiness Group shall guarantee the autonomy and expertise of the livestock economic business in operating its organization and human resources, formulating a business plan, and implementing businesses.

(2) When the NongHyup Agribusiness Group stipulates matters concerning the appointment of executive officers, management of property, coordination of human resources, etc. in its articles of association, it shall take into account the purposes of special cases concerning the livestock economic business as at the time of consolidation between the National Agricultural Cooperatives Federation and the National Livestock Cooperatives Federation and objectives of such consolidation.

[This Article Added on Dec. 27, 2016]

Article 161-10(NongHyup Financial Group) #

(1) The National Federation shall establish the NongHyup Financial Group by separating such financial business as the credit business and mutual aid business, in order to contribute to the interests of its members and members of member cooperatives by conducting the financial business professionally and efficiently. In such cases, the business separation shall be deemed a division of a company referred to in Article 530-12 of the Commercial Act, and Articles 530-3(1), (2), (4), 530-4 through 530-7, and 530-9 through 530-11 of that Act shall apply mutatis mutandis to the procedures for such business separation; and "affirmative votes of at least two thirds of the voting rights of the shareholders present at a general meeting of shareholders and of at least one third of the total number of issued and outstanding shares" in Article 434 of that Act applied mutatis mutandis under Article 530-3 of that Act shall be construed as "attenadance of a majority of the delegates and concurring vote of at least 2/3 of the delegates".

(2) Where the NongHyup Financial Group is established pursuant to paragraph (1), it shall be deemed to have obtained authorization under Article 3 of the Financial Holding Companies Act.

(3) The NongHyup Financial Group established pursuant to paragraph (1) shall be deemed a bank holding company under Article 2(1)5 of the Financial Holding Companies Act.

(4) Except as provided in this Act, the Commercial Act, the Financial Holding Companies Act, and the Act on Corporate Governance of Financial Companies shall apply to the NongHyup Financial Group; provided, Articles 8, 8-2, 8-3, 10, and 10-2 of the Financial Holding Companies Act shall not apply to any of the following cases:

1. Where the National Federation holds stocks of the NongHyup Financial Group;

2. Where the NongHyup Financial Group holds stocks of a financial holding company under Article 2(1)1 of the Financial Holding Companies Act.

(5) Articles 15-3, 16-2, and 16-4 of the Banking Act shall not apply where the NongHyup Financial Group established under paragraph (1) holds stocks of a bank under Article 2(1)2 of that Act.

(6) Articles 45 and 45-2 of the Financial Holding Companies Act shall not apply where the NongHyup Financial Group (including subsidiaries, etc. referred to in Article 4(1)2 of the Financial Holding Companies Act) extends credit to the National Federation (including the NongHyup Agribusiness Group and its subsidiaries) to perform projects entrusted by the State. <Added on Oct. 18, 2022>

[This Article Added on Dec. 27, 2016]

Article 161-11(NongHyup Bank) #

(1) The National Federation shall establish the NongHyup Bank by separating the credit business, in order to support farmers and cooperatives in their autonomous economic activities and promote the improvement of their economic status by providing them with necessary funding. In such cases, the business separation shall be deemed a division of a company referred to in Article 530-12 of the Commercial Act, and Articles 530-3(1), (2), (4), 530-4 through 530-7, and 530-9 through 530-11 of that Act shall apply mutatis mutandis to the procedures for such business separation; and "affirmative votes of at least two thirds of the voting rights of the shareholders present at a general meeting of shareholders and of at least one third of the total number of issued and outstanding shares" in Article 434 of that Act applied mutatis mutandis under Article 530-3 of that Act shall be construed as "attendance of a majority of the delegates and concurring vote of at least 2/3 of the delegates".

(2) The NongHyup Bank shall perform the following:

1. Lending funds necessary for farmers and cooperatives, such as funds for agricultural and fishing villages;

2. Lending business funds to cooperatives and the National Federation;

3. Agency services for the State or public organizations;

4. Businesses entrusted or subsidized by the State, public organizations, the National Federation, the NongHyup Agribusiness Group and its subsidiaries;

5. Banking business under Article 27 of the Banking Act, ancillary business under Article 27-2 of that Act and concurrent business pursuant to Article 28 of that Act.

(3) The NongHyup Bank may preferentially provide funds necessary for conducting business affairs of cooperatives, the National Federation, the NongHyup Agribusiness Group, or its subsidiaries, in any of the following cases:

1. Funds required by farmers for production, distribution, and sale of agricultural and livestock products;

2. Funds necessary to revitalize the economic business of cooperatives, the NongHyup Agribusiness Group and its subsidiaries.

(4) Where the NongHyup Bank provides financial support pursuant to paragraph (3), it may give preferential treatment, as prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs.

(5) The NongHyup Bank may manage funds by means of borrowing funds from the State, public organizations or financial institutions or depositing funds with financial institutions, if necessary to perform the business affairs referred to in the subparagraphs of paragraph (2).

(6) When establishing the standards for management guidance under Article 34(2) of the Banking Act with respect to the NongHyup Bank, the Financial Services Commission shall take into account the principles of supervising the soundness of financial institutions recommended by the Bank for International Settlements and the special characteristics of the NongHyup Bank in the performance of the businesses under paragraphs (2)1 and (3) of this Article.

(7) The Minister of Agriculture, Food and Rural Affairs may supervise the NongHyup Bank, as prescribed by this Act, and may issue orders or take measures necessary for supervision, as prescribed by Presidential Decree.

(8) Except as provided in this Act, the provisions of the Commercial Act concerning stock companies, the Banking Act, and the Act on Corporate Governance of Financial Companies shall apply to the NongHyup Bank; provided, Articles 8, 53(2)1 and 2, 56, and 66(2) of the Banking Act shall not apply, and where the Financial Services Commission intends to impose sanctions pursuant to Article 53(2)3 through 6 of that Act or to grant authorization pursuant to Article 55(1) of that Act, it shall consult in advance with the Minister of Agriculture, Food and Rural Affairs.

(9) Articles 35 and 35-2 of the Banking Act shall not apply where the NongHyup Bank extends credit to the National Federation (including the NongHyup Agribusiness Group and its subsidiaries) for the performance of projects entrusted by the State. <Added on Oct. 18, 2022>

[This Article Added on Dec. 27, 2016]

Article 161-12(NongHyup Life Insurance and NongHyup Property & Casualty Insurance) #

(1) The National Federation shall respectively establish a corporation engaged in the life insurance business (hereinafter referred to as "NongHyup Life Insurance Co., Ltd".) and a corporation engaged in the non-life insurance business (hereinafter referred to as "NongHyup Property & Casualty Insurance Co., Ltd".) by separating the mutual aid business, in order to conduct the mutual aid business in a professional and efficient manner. In such cases, the business separation shall be deemed a division of a company referred to in Article 530-12 of the Commercial Act, and Articles 530-3(1), (2), (4), 530-4 through 530-7, and 530-9 through 530-11 of that Act shall apply mutatis mutandis to the procedures for such business separation; and "affirmative votes of at least two thirds of the voting rights of the shareholders present at a general meeting of shareholders and of at least one third of the total number of issued and outstanding shares" in Article 434 of that Act applied mutatis mutandis under Article 530-3 of that Act shall be construed as "attenadance of a majority of the delegates and concurring vote of at least 2/3 of the delegates".

(2) Except as provided in this Act, the Insurance Business Act and the Act on Corporate Governance of Financial Companies shall apply to NongHyup Life Insurance and NongHyup Property & Casualty Insurance.

[This Article Added on Dec. 27, 2016]

Article 162(Supervision) #

(1) The Minister of Agriculture, Food and Rural Affairs shall supervise cooperatives, etc. and the National Federation, as prescribed by this Act, and may issue orders and take measures necessary for supervision, as prescribed by Presidential Decree; provided, the credit business of cooperatives shall be supervised in consultation with the Financial Services Commission. <Amended on Mar. 31, 2011; Mar. 23, 2013>

(2) Where the Minister of Agriculture, Food and Rural Affairs deems it necessary for performing the duties under paragraph (1), he or she may request the Financial Services Commission to inspect a cooperative or the National Federation. <Amended on Mar. 23, 2013>

(3) The Minister of Agriculture, Food and Rural Affairs may entrust part of his or her supervisory authority over cooperatives, etc. under this Act to the Chairperson, as prescribed by Presidential Decree. <Amended on Mar. 31, 2011; Mar. 23, 2013; Feb. 18, 2020>

(4) Notwithstanding paragraph (1), the head of a local government may supervise affairs related to projects subsidized by the local government and take necessary measures, as prescribed by Presidential Decree. <Added on Feb. 18, 2020>

(5) Notwithstanding paragraph (1) and Article 161-11(7), the Financial Services Commission may supervise the credit business of a cooperative and the NongHyup Bank, as prescribed by Presidential Decree, to ensure the soundness of management thereof and may issue orders necessary for such supervision. <Amended on Mar. 31, 2011; Dec. 27, 2016; Feb. 18, 2020>

(6) The Governor of the Financial Supervisory Service may entrust the Chairperson with part of his or her authority to inspect cooperatives under Article 83 of that Act, which applies to cooperatives pursuant to Article 95 of the Credit Unions Act. <Amended on Mar. 31, 2011; Feb. 18, 2020>

[This Article Wholly Amended on Jun. 9, 2009]

Article 163(Revocation of unlawful or unjust resolutions or suspension of execution) #

Where the Minister of Agriculture, Food and Rural Affairs deems that a resolution adopted by a general meeting of a cooperative, etc. or the National Federation or a general meeting of the National Federation or the board of directors is unlawful or unjust, he or she may revoke all or part of the resolution or suspend the execution thereof. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 164(Administrative dispositions against violations) #

(1) Where it is deemed that the business and accounting of a cooperative, etc. or the National Federation are in violation of any statute or regulation, an administrative disposition issued under any statute or regulation or the articles of association, the Minister of Agriculture, Food and Rural Affairs may order the cooperative, etc. or the National Federation to take corrective measures within a specified period and may require the relevant executive officers and employees to take the following measures: <Amended on Mar. 23, 2013; Dec. 27, 2016>

1. Improvement, suspension of performance of duties, or reimbursement for executive officers;

2. Disciplinary dismissal from office, suspension of performance of duties, reduction of salary, or reimbursement for employees;

3. Cautions and warnings for executive officers and employees.

(2) Where a cooperative, etc. or the National Federation fails to comply with a corrective order or take measures against its executive officer or employee under paragraph (1), the Minister of Agriculture, Food and Rural Affairs may suspend all or part of its business for a specified period of up to 6 months. <Amended on Mar. 23, 2013>

(3) The relevant executive officer or employee who is requested to take measures for improvement or disciplinary dismissal from office pursuant to paragraph (1) or Article 146(3)1 and 2 shall be suspended from performance of his or her duties from such date to the date the measures are finalized.

[This Article Wholly Amended on Jun. 9, 2009]

Article 165 #

Deleted. <Mar. 31, 2011>

Article 166(Management guidance) #

(1) Where it is deemed that a cooperative, etc. is likely to impede the protection of its members because it falls under any of the following cases, the Minister of Agriculture, Food and Rural Affairs shall provide management guidance to the cooperative, etc.: <Amended on Mar. 31, 2011; Mar. 23, 2013>

1. Where the findings from an audit of the cooperative indicate that the total amount of its non-performing loans exceeds twice its equity capital and such loans are unlikely to be recovered by conventional means within a short period of time, which would lead to an entire capital erosion;

2. Where it is deemed impracticable to promote normalization of management on its own due to property losses caused by illegal or unjust acts of its executive officers or employees;

3. Where the cooperative faces a rush of withdrawals of deposits and installment savings or is no longer capable of paying deposits and installment savings due to a high risk of going bankrupt or illegal or unjust acts of its executive officers or employees;

4. Where the Chairperson recommends that management guidance is necessary upon management evaluation or audit under Articles 142(2) and 146;

5. Where the Governor of the Financial Supervisory Service recommends that management guidance is necessary upon an inspection conducted under Article 83 of the Credit Unions Act, which applies to a cooperative pursuant to Article 95 of that Act.

(2) "Management guidance" in paragraph (1) means guidance on the following matters:

1. Collection of illegal or non-performing loans and securing of claims;

2. Business affairs regarding receipt and disbursement of funds and credit and deposit;

3. Other matters prescribed by Presidential Decree regarding the management of cooperatives, etc.

(3) Where management guidance under paragraph (1) commences, the Minister of Agriculture, Food and Rural Affairs may suspend the payment of debts or the duties of executive officers for a period not exceeding 6 months. In such cases, the Minister may require the Chairperson to investigate the property status of the cooperative, etc. (hereinafter referred to as "due diligence on property") without delay or may request the Governor of the Financial Supervisory Service to conduct due diligence on property. <Amended on Mar. 31, 2011; Mar. 23, 2013>

(4) The Chairperson or the Governor of the Financial Supervisory Service shall take measures necessary for compensating for losses, such as inquiring into property, applying for provisional seizure, etc., against executive officers or employees who have caused losses to the cooperative, etc. due to unlawful or unjust acts upon the due diligence on property conducted under the latter part of paragraph (3). <Amended on Mar. 31, 2011>

(5) The Minister of Agriculture, Food and Rural Affairs may request the head of a central administrative agency to provide data necessary for taking measures under paragraph (4). Upon receipt of such request, the head of the central administrative agency shall comply therewith, unless there is a compelling reason not to do so. <Amended on Mar. 23, 2013>

(6) Where it is deemed that special circumstances exist, such as where the management normalization of the relevant cooperative, etc. is possible given the findings of due diligence on property, the Minister of Agriculture, Food and Rural Affairs shall withdraw all or part of the suspension under the main clause of paragraph (3). <Amended on Mar. 23, 2013>

(7) The Minister of Agriculture, Food and Rural Affairs may entrust the Chairperson with the business affairs concerning management guidance under paragraph (1). <Amended on Mar. 31, 2011; Mar. 23, 2013>

(8) Matters necessary for the methods, period, procedures, etc. for management guidance, suspension of payment of debts, or suspension of performance of duties of executive officers under paragraphs (1) through (3) shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Jun. 9, 2009]

Article 167(Revocation of authorization for establishment) #

(1) Where a cooperative, etc. falls under any of the following cases, the Minister of Agriculture, Food and Rural Affairs may revoke authorization for establishment or order a merger after hearing the opinions of the Chairperson and business unit-specific chief executive officers, etc.; provided, where the cooperative, etc. falls under subparagraph 4 or 7, the Minister of Agriculture, Food and Rural Affairs shall revoke authorization for establishment: <Amended on Mar. 23, 2013>

1. Where it fails to file for registration of establishment even after 90 days have passed since the date of authorization for establishment;

2. Where it fails to conduct business for at least one year without good cause;

3. Where it fails to take corrective measures even after receiving a disposition under Article 164(1) at least twice;

4. Where it continues to conduct the relevant business affairs during the period of business suspension under Article 164(2);

5. Where it fails to meet the standards for establishment of a cooperative, etc.;

6. Where a cooperative, etc., whose capital has eroded due to poor management as found in an audit or evaluation of its business management, fails to take the measures specified in Article 142(2), 146, or 166 and is likely to cause a serious loss to the members of the cooperative (referring to members in the case of joint venture corporations of cooperatives and the federation under Article 112-3) and to a third party;

7. Where it obtains authorization for the establishment of a cooperative, etc. by fraud or other improper means.

(2) Where the Minister of Agriculture, Food and Rural Affairs revokes authorization for the establishment of a cooperative, etc. pursuant to paragraph (1), he or she shall immediately publicly announce such fact. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 168(Request for inspection by members of cooperatives or members) #

(1) Where a member of a cooperative requests an inspection, with the consent of at least 300 members or at least 10/100 of the members or delegates, on the grounds that the business execution by the cooperative is in violation of statutes or regulations or the articles of association, the Minister of Agriculture, Food and Rural Affairs may have the Chairperson inspect the business execution status of the relevant cooperative. <Amended on Mar. 31, 2011; Mar. 23, 2013>

(2) Where a member of the National Federation requests an inspection, with the consent of at least 10/100 of the members, on the grounds that the business execution by the National Federation is in violation of statutes or regulations or the articles of association, the Minister of Agriculture, Food and Rural Affairs may request the Governor of the Financial Supervisory Service to conduct an inspection of the National Federation. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 169(Hearings) #

Where the Minister of Agriculture, Food and Rural Affairs intends to revoke authorization for establishment pursuant to Article 167, he or she shall hold a hearing. <Amended on Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 169-2(Re-examination of regulation) #

The Minister of Agriculture, Food and Rural Affairs shall review the appropriateness of management guidance under Article 166 every 3 years from January 1, 2015.

[This Article Added on Dec. 31, 2014]

Article 170(Penalty provisions) #

(1) An executive officer of a cooperative, etc. or an executive officer or executive of the National Federation who inflicts a loss on the cooperative, etc. or the National Federation by any of the following acts shall be punished by imprisonment with labor for not more than 10 years or by a fine not exceeding 100 million won: <Amended on Dec. 27, 2016>

1. Use or lending of funds for purposes other than business purposes of cooperatives, etc. or the National Federation;

2. Disposal or use of the property of cooperatives, etc. or the National Federation for speculative purposes.

(2) The imprisonment with labor and fine under paragraph (1) may be imposed concurrently.

[This Article Wholly Amended on Jun. 9, 2009]

Article 171(Penalty provisions) #

Where an executive officer of a cooperative, etc. or the National Federation, an executive employee of a cooperative, an executive or general executive employee of the National Federation, a trustee in bankruptcy, or a liquidator falls under any of the following subparagraphs, he or she shall be punished by imprisonment with labor for not more than 3 years or by a fine not exceeding 30 million won: <Amended on Mar. 31, 2011; Mar. 23, 2013; Dec. 23, 2013; Dec. 31, 2014; Dec. 27, 2016; Mar. 10, 2026>

1. Failing to obtain authorization for the matters requiring authorization under Article 15(1) (including cases applied mutatis mutandis pursuant to Article 77(2), 107 or 112), 35(2) (including cases applied mutatis mutandis pursuant to Article 107 or 112), 75(2) (including cases applied mutatis mutandis pursuant to Article 107 or 112), 75(5) (including cases applied mutatis mutandis pursuant to Article 107 or 112), 78(1) (including cases applied mutatis mutandis pursuant to Article 107), 112-5(1), 112-6(2), 120(2), or 121(1);

2. Executing the matters requiring a resolution of the general meeting, board of delegates, or the board of directors (including sub-board of directors) pursuant to Article 15(1) (including cases applied mutatis mutandis pursuant to Article 77(2), 107 or 112), 30(1) (including cases applied mutatis mutandis pursuant to Article 107, 112, 111 or 161), 35(1) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 111), 43(3) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 112-11), 54(1) through (3) (including cases applied mutatis mutandis pursuant to Article 107 or 161), 64 (including cases applied mutatis mutandis pursuant to Article 107 or 112), 75(1) (including cases applied mutatis mutandis pursuant to Article 107 or 112), 77(1) (including cases applied mutatis mutandis pursuant to Article 107 or 112), subparagraph 2 of Article 82 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 112-10), Article 110-2(1) through (3), 123, 125(4), 125-2(3) or 159, without a resolution;

3. Failing to report or making a false report to a general meeting or the board of directors under Article 46(7) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 129(5)) or Article 142(2);

4. Conducting business without approval under Article 57(1)10, subparagraph 10 of Article 106, subparagraph 9 of Article 111, or Article 134(1)9;

5. Using surplus funds of the cooperative in violation of Article 66 (including cases applied mutatis mutandis pursuant to Article 107 or 112);

6. Failing to accumulate at least 10/100 of its surplus, in violation of Article 67(1) (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161);

7. Failing to carry forward at least 20/100 of its surplus to the following fiscal year, in violation of Article 67(3) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161);

8. Compensating for loss, carrying forward loss, or distributing surplus, in violation of Article 68 (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161);

9. Failing to accumulate the capital reserves, in violation of Article 69 (including cases applied mutatis mutandis under Article 107, 112, 112-11, or 161);

10. Using the legal reserves, in violation of Article 70 (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161);

11. Failing to submit or prepare a closing report, in violation of Article 71(1) or (3) (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161);

12. Failing to prepare a statement of financial position, in violation of Article 72(1) (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161) or Article 72(1), which is applied mutatis mutandis pursuant to Article 80 (including cases applied mutatis mutandis pursuant to Article 107 or 112);

13. Disposing of property without obtaining approval from the general meeting or the Minister of Agriculture, Food and Rural Affairs, in violation of Article 85 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 112-11);

14. Distributing property, in violation of Article 87 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 112-11);

15. Failing to prepare a closing report or to submit it to a general meeting, in violation of Article 88 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 112-11);

16. Fraudulently making registration under Article 90 (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161), 91 through 93 (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 161), 95 through 99 (including cases applied mutatis mutandis pursuant to Article 107, 112, 112-11, or 112-10), or 102 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161);

17. Refusing, interfering with, or evading an audit by the National Federation under Article 146 or the supervision and inspection by a supervisory agency under Article 162.

[This Article Wholly Amended on Jun. 9, 2009]

Article 172(Penalty provisions) #

(1) Any of the following persons shall be punished by imprisonment for not more than 2 years or by a fine not exceeding 20 million won: <Amended on Mar. 31, 2011; Jun. 11, 2014; Mar. 10, 2026>

1. A person who interferes in a public election, in violation of Article 7(1) or (2);

2. A person who conducts an election campaign, in violation of Article 50(1) or (11) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161);

3. A person who violates Article 50-2 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161);

4. A person who offers money and valuables for congratulatory or condolence purposes, in violation of Article 50-3 (including cases applied mutatis mutandis pursuant to Article 107 or 112).

(2) Any of the following persons shall be punished by imprisonment with labor for not more than one years or by a fine not exceeding 10 million won: <Amended on Mar. 31, 2011; Jun. 11, 2014>

1. A person who makes a door-to-door visit or makes people gather at a particular place, in violation of Article 50(2) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161);

2. A person who conducts an election campaign, in violation of Article 50(4), (6), or (7) (including cases applied mutatis mutandis pursuant to Article 107 or 112) or 130(11);

3. A person who violates Article 50(8) through (10) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161);

4. Deleted. <Jun. 11, 2014>

(3) Any person who publishes a false fact or slanders a candidate in violation of Article 50(3) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161) shall be punished by a fine of not less than 5 million won but not more than 30 million won. <Amended on Mar. 31, 2011>

(4) The statute of limitations for an offense under paragraphs (1) through (3) shall be completed after 6 months have elapsed after the relevant election day (in the case of an offense committed after the election day, 6 months from the date such offense is committed); provided, the period shall be 3 years if the offender escapes or has his or her accomplice or a witness escape.

[This Article Wholly Amended on Jun. 9, 2009]

[An amendment is made to ‘subparagraph 4 of Article 50' in Article 172(2)2, which was declared unconstitutional on Jul. 29, 2010 by Act No. 10522 (Mar. 31, 2011)]

Article 173(Invalidation of election due to election crimes) #

(1) If any of the following applies to the election of an executive officer of a cooperative or the National Federation, the election shall be null and void: <Amended on Jun. 1, 2012>

1. Where the winner of the election is sentenced to imprisonment with labor or a fine of not less than one million won for committing a crime falling under Article 172 in the relevant election;

2. Where a lineal ascendant or descendant or spouse of the elected person is sentenced to imprisonment with labor or a fine of at least 3 million won or more for violating Article 50(1) or 50-2 in the relevant election; provided, this shall not apply if the offense was committed at the inducement or provocation of another person intending to have the election of the person invalidated.

(2) Any of the following persons shall be disqualified from becoming a candidate for a reelection, the grounds for which have become final and conclusive due to the nullification of election (including a special election for which the grounds for holding the election have become final and conclusive because the elected person resigned from office upon prosecution before the final and conclusive judgment): <Added on Jun. 1, 2012; Jun. 11, 2014>

1. A person whose election has been invalidated pursuant to paragraph (1)2 of this Article or subparagraph 2 of Article 70 of the Act on Elections Entrusted by Public Organizations (including a person who has resigned from office upon prosecution before the final and conclusive judgment);

2. A person who has not been elected (including a person who intends to become a candidate) and for whom a sentence amounting to election invalidation has become final and conclusive due to a crime of a lineal ascendant or descendant or spouse under paragraph (1)2 of this Article or subparagraph 2 of Article 70 of the Act on Elections Entrusted by Public Organizations.

[This Article Wholly Amended on Mar. 31, 2011]

[Title Amended on Jun. 1, 2012]

Article 174(Administrative fines) #

(1) Any person who uses the name in violation of Article 3(2), 112-3(3), or 138(6) shall be subject to an administrative fine not exceeding 2 million won.

(2) If an executive officer of a cooperative, etc. or the National Federation, an executive employee of a cooperative, an executive or general executive employee of the National Federation, a trustee in bankruptcy, or a liquidator neglects to make a public announcement or peremptory notice or makes a false public announcement or peremptory notice, he or she shall be subject to an administrative fine not exceeding 2 million won.

(3) Deleted. <Jun. 11, 2014>

(4) A person who receives money, goods, or other economic benefits in violation of Article 50-2(1) and (5) (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161) shall be subject to an administrative fine equivalent to at least 10 times but not more than 50 times the amount or value of the money, goods, or other economic benefits received, and the maximum amount shall be 30 million won. <Amended on Mar. 31, 2011>

(5) Administrative fines under paragraphs (1) through (4) shall be imposed and collected by the Minister of Agriculture, Food and Rural Affairs, as prescribed by Presidential Decree. <Amended on Mar. 23, 2013; Jun. 11, 2014>

[This Article Wholly Amended on Jun. 9, 2009]

Article 175(Protection of election crime reporters) #

`Article 262-2 of the Public Official Election Act shall apply mutatis mutandis to the protection of reporters, etc. of crimes under Article 172 (including crimes subject to administrative fines under Article 174(4)).

[This Article Wholly Amended on Jun. 9, 2009]

Article 176(Payment of monetary rewards for reporting election crimes) #

(1) A cooperative or the National Federation may pay a monetary reward to a person who reports a crime under Article 172 (including any crime subject to an administrative fine under Article 174(4)) before the cooperative, the National Federation, or the cooperative election committee becomes aware of such crime. <Amended on Mar. 31, 2011; Jun. 11, 2014>

(2) The upper limit of the monetary reward, and standards and methods of payment thereof under paragraph (1) shall be prescribed by Decree of the Ministry of Agriculture, Food and Rural Affairs. <Added on Mar. 31, 2011; Mar. 23, 2013>

[This Article Wholly Amended on Jun. 9, 2009]

Article 177(Special cases concerning self-surrender) #

(1) If a person who receives or agrees to receive money, goods, entertainment, other property benefits, or a public office, in violation of Article 50 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161) or Article 50-2 (including cases applied mutatis mutandis pursuant to Article 107, 112, or 161) surrenders, the sentence or administrative fines shall be reduced or waived.

(2) When a person prescribed in paragraph (1) reports that he or she has committed an election crime to the election commission under this Act and the election commission notifies the relevant investigative agency of such fact, the time of reporting to the election commission shall be deemed the time of surrender. <Amended on Jun. 11, 2014>

[This Article Added on Mar. 31, 2011]