FRAMEWORK ACT ON COOPERATIVES

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FRAMEWORK ACT ON COOPERATIVES — 법갈피

Article 11(Policies on cooperatives) #

(1) The Minister of Planning and Budget shall preside over policies on cooperatives and formulate a master plan for the promotion of autonomous activities of cooperatives (hereinafter referred to as "master plan") every 3 years. <Amended on Oct. 1, 2025>

(2) A master plan shall include the following matters: <Amended on Mar. 31, 2020>

1. Basic direction for revitalization of cooperative, etc. and federation of cooperatives, etc.;

2. Improvement of related statutes and systems for revitalization of cooperative, etc. and federation of cooperatives, etc.;

3. Matters concerning strategies for development of cooperative, etc. and federation of cooperatives, etc. and creation of infrastructure therefor;

4. Matters concerning mutual cooperation among cooperative, etc. and federation of cooperatives, etc. and cooperation among the agencies related to policies on cooperatives;

5. Matters concerning the results of fact-finding surveys of cooperatives referred to in paragraph (6) and improvements of policies on cooperatives;

6. Other matters concerning creating conditions for revitalization of cooperatives.

(3) In presiding over policies on cooperatives and formulating a master plan pursuant to paragraphs (1) and (2), the Minister of Planning and Budget shall consult with the heads of related central administrative agencies, and may request the Special Metropolitan City Mayor, the Mayors of Metropolitan Cities, the Mayor of a Special Self-Governing City, Governors of Dos, or the Governor of a Special Self-Governing Province (hereinafter referred to as the "Mayor/Do Governor"), the heads of related agencies and organizations to present their opinions. In such cases, those who have received such request shall comply therewith unless there is good cause. <Amended on Jun. 9, 2020; Oct. 1, 2025>

(4) The Minister of Planning and Budget may consult and coordinate with Mayors and Do Governors about matters concerning policies on cooperatives and autonomous activities of cooperatives, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025>

(5) Matters necessary for presiding over policies on cooperatives, formulating a master plan, consulting and coordinating with Mayors/Do Governors under paragraphs (1) through (4) shall be prescribed by Presidential Decree.

(6) When the Minister of Planning and Budget has formulated a master plan, the Minister shall submit it to the standing committee under the jurisdiction of the National Assembly without delay and announce it. <Amended on Mar. 31, 2020; Oct. 1, 2025>

(7) In order to understand the actual conditions concerning the current status of activities, funds, human resources, management, etc. of cooperatives, the Minister of Planning and Budget shall conduct a fact-finding survey every two years, and officially announce the results thereof and report the results to the competent standing committee of the National Assembly. <Amended on Mar. 31, 2020; Oct. 1, 2025>

(8) The heads of related central administrative agencies or Mayors/Do Governors shall submit data necessary for a fact-finding survey referred to in paragraph (7) to the Minister of Planning and Budget. <Amended on Mar. 31, 2020; Oct. 1, 2025>

[This Article Wholly Amended on Jan. 21, 2014]

Article 15(Reporting on establishment) #

(1) Where a cooperative is to be established, at least five promoters qualified for membership shall prepare articles of association, table the articles of association at the inaugural general meeting for adoption, and shall report the articles of association to the competent Mayor/Do Governor having jurisdiction over its principal place of business. The same shall also apply where they change reported matters. <Amended on Jan. 21, 2014>

(2) A Mayor/ Do Governor shall notify the reporting person of whether the report is accepted or the report of change is accepted within 20 days from the date of receipt of the report or change report under paragraph (1). <Amended on Mar. 31, 2020>

(3) Where a Mayor/Do Governor fails to notify a reporting person of whether to accept the report or accept a change report within the period prescribed in paragraph (2) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, a report or a report of change shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Amended on Mar. 31, 2020>

(4) A resolution at the inaugural general meeting shall be passed with the attendance of a majority of persons who have submitted a letter of consent to establishment to promoters before the opening of the inaugural general meeting and by an affirmative vote of not less than two-thirds of persons present at the meeting. <Amended on Mar. 31, 2020>

(5) Immediately upon receiving a report on the establishment of a cooperative pursuant to paragraph (1), the competent Mayor/Do Governor shall notify the Minister of Planning and Budget thereof. <Amended on Mar. 31, 2020; Oct. 1, 2025>

(6) Except as provided in paragraphs (1) through (5), matters necessary to report the establishment of a cooperative and report the revision of reported matters shall be prescribed by Presidential Decree. <Added on Jan. 21, 2014; Mar. 31, 2020>

Article 36(Disqualification as executive officers) #

(1) No person who falls under any of the following subparagraphs shall be qualified as an executive officer of a cooperative or a person in charge of duties of the executive officer prescribed in Article 34 (4): <Amended on Jan. 21, 2014; Mar. 31, 2020>

1. An incompetent person under the adult guardianship;

2. Deleted; <Jan. 5, 2021>

3. A person adjudicated bankrupt but not yet reinstated;

4. A person in whose case three years have not passed since the date on which a sentence of imprisonment without prison labor or heavier punishment imposed upon him or her was completely executed (including cases where it is deemed that such sentence was completely executed) or discharged;

5. A person who is still in the suspension period of a sentence of the suspension of execution of imprisonment without prison labor or heavier punishment or a person in whose case two years have not passed since the date on which the suspension period of such sentence expired;

6. A person for whom sentencing imprisonment without prison labor or heavier punishment was suspended and is still in the sentence suspension period;

6-2. A person who has committed a crime prescribed in Article 303 of the Criminal Act or Article 10 of the Act on Special Cases concerning the Punishment of Sexual Crimes and has been sentenced to a fine of not less than 3 million won and for whom two years have not passed since the sentence became final and conclusive;

7. A person who has his or her qualification relinquished of or suspended by judgment by a court or by operation of any other Act.

(2) If any subparagraph of paragraph (1) applies to an executive officer, the executive officer or a person in charge of duties of the executive officer under Article 34 (4) shall be automatically dismissed from his or her office. <Amended on Jan. 21, 2014>

(3) A conduct in which an executive officer dismissed pursuant to paragraph (2) or a person in charge of duties of the executive officer under Article 34 (4) has engaged before his or her dismissal shall remain effective and valid. <Amended on Jan. 21, 2014>

[Title Amended on Jan. 21, 2014]

Article 37(Restrictions on election campaign) #

(1) No person shall commit any of the following acts with intent to have him or herself or any specific person elected or fail in an election for executive officer or representative of a cooperative: <Amended on Jan. 21, 2014>

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

(a) Offering money, goods, entertainment, or any other interest in property;

(b) Providing a government or private job;

(c) Expressing his or her intention to offer money, goods, entertainment, or any other interest in property or to provide a government or private job, or promising to offer such favor;

2. Committing an act under any item of subparagraph 1 against a person who intends to become a candidate or who is a candidate with intent to have the person fail to become a candidate or to have the person resign from the candidate;

3. Obtaining a benefit or a job under subparagraph 1 or 2, accepting the manifestation of the intent to offer such benefit or job, or demanding or arranging the offer of such benefit or job.

(2) No person who intends to become an executive officer or a representative shall visit members door to door or solicit members to gather in a specific place for election campaign during the period from the announcement date of the election day to the election day. <Amended on Jan. 5, 2021>

(3) No person shall slander a candidate by publishing a false fact in relation to an election of executive officers or representatives of a cooperative or by stating a fact publicly by public speech, poster, or any other means.

(4) No person shall conduct an election campaign by other than the following means in connection with an election of executive officers or representatives: <Amended on Jan. 21, 2014>

1. Posting propaganda posters;

2. Distributing official election bulletins;

3. Distributing printed leaflets;

4. Holding joint speeches or public forums;

5. Appealing for support by telephone (including text messages), fax, or computer communications (including electronic mail).

Article 56(Merger and division) #

(1) A cooperative may initiate a merger or a division with a resolution thereon by the general assembly after it prepares a merger agreement or a division plan.

(2) When cooperatives are merged, the cooperative surviving the merger shall file a report on merger, the cooperative newly established after the division shall file a report on establishment, and the cooperative dissolved after the merger shall file a report on dissolution, respectively with the Mayor/Do Governor having jurisdiction over the seat of its principal office. <Amended on Jan. 21, 2014>

(3) The cooperative surviving or newly established as a consequence of a merger or division shall succeed to the rights and obligations of the cooperative dissolved as a consequence of the merger or division.

(4) The provisions of Article 15, 15-2, 16, and 17 shall apply mutatis mutandis to cooperatives established pursuant to paragraph (1). <Amended on Jan. 21, 2014>

(5) A Mayor/ Do Governor shall notify the reporting person of whether the report is accepted within 20 days from the date of receipt of the report on merger under paragraph (2). In such cases, where a Mayor/Do Governor fails to notify the reporting person of whether to accept the report within the relevant period or of the extension of the period of handling prescribed in statutes or regulations pertaining to handling civil petitions, the report shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020>

(6) A cooperative shall not merge with, or be split into, any corporation, organization, or cooperative other than a cooperative under this Act. <Amended on Mar. 31, 2020>

(7) Notwithstanding paragraph (6), where a social cooperative obtains approval from the Minister of Planning and Budget, it may merge the following corporations: <Added on Jan. 21, 2014; Mar. 31, 2020; Oct. 1, 2025>

1. A stock company incorporated pursuant to the Commercial Act;

2. A limited company incorporated pursuant to the Commercial Act;

3. A limited liability company incorporated pursuant to the Commercial Act;

(8) The Minister of Planning and Budget shall notify the applicant of whether the authorization for merger is granted within 60 days from the date of receipt of the application for authorization under paragraph (7). <Added on Mar. 31, 2020; Oct. 1, 2025>

(9) Where the Minister of Planning and Budget fails to notify an applicant of whether authorization is granted within the period prescribed in paragraph (8) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, an acceptance of a report or a report of change shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with prescribed in statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020; Oct. 1, 2025>

(10) Matters necessary for criteria and procedures for authorization under paragraph (7) shall be prescribed by Presidential Decree. <Added on Jan. 21, 2014; Mar. 31, 2020>

(11) The provisions of Article 53 and 54 shall apply mutatis mutandis to the merger and division of cooperatives. <Amended on Jan. 21, 2014; Mar. 31, 2020>

Article 57-2(Dissolution of dormant cooperative) #

(1) The Minister of Court Administration may, in the official gazette, make a public notice to the court having jurisdiction over the location of the head office to report that the business has not yet been abolished for cooperatives that have been five years since the last registration. In such cases, the details, methods, etc. of reporting shall apply mutatis mutandis to the matters concerning reporting under Article 520-2 (1) of the Commercial Act.

(2) A cooperative that has not reported under paragraph (1) within two months from the date of publication and five years have already elapsed since the last registration on the date of public notice under paragraph (1) shall be deemed to have been dissolved when the reporting period has expired; provided, this shall not apply to cooperatives registered within the reporting period.

(3) When there is a public notice under paragraph (1), the court shall send a notice stating that the public notice has been made to the relevant cooperative.

(4) As a result of dissolution in accordance with the main clause of paragraph (2), the cooperative may continue to exist within three years thereafter if the attendance of a majority of the total members and a vote in favor of two-thirds or more of the members present.

(5) If the cooperative fails to continue the cooperative under paragraph (4) after being dissolved in accordance with the main clause of paragraph (2), the liquidation is deemed to have been completed when three years have elapsed from the date of dissolution.

(6) Article 73 of the Commercial Registration Act shall apply mutatis mutandis to the registration of dissolution and finalization of liquidation of a cooperative under paragraphs (2) and (5). In such cases, "Article 520-2 (1) of the Commercial Act" shall be construed as "Article 57-2 (2) of the Framework Act on Cooperatives", and "Article 520-2 (4) of the Commercial Act" shall be construed as "Article 520-2 (4) of the Framework Act on Cooperatives" Article 57-2 (5)".

[This Article Added on Mar. 31, 2020]

Article 60-2(Organizational change of corporation, etc.) #

(1) A limited liability company, stock company, or limited company incorporated pursuant to the Commercial Act, or a for-profit corporation incorporated pursuant to other Acts and subordinate statutes (hereinafter referred to as "corporation, etc.") may change its organization to a cooperative under this Act, following a resolution by a general meeting with an unanimous consent of all constituent members (where a general meeting is not organized, referring to the consent of all constituent members; hereinafter the same shall apply in this Article and Article 105-2). In such cases, the existing corporation, etc. and a cooperative with organizational change shall be deemed the same corporation in terms of the rights and obligations.

(2) A resolution by a general meeting under paragraph (1) shall determine on the following matters on a cooperative with organizational change:

1. Articles of association;

2. Capital invested;

3. Other matters necessary for organizational change to a cooperative.

(3) Organizational change to a cooperative under paragraph (1) does not allow an amount larger than the existing net assets of the existing corporation, etc. as the total amount of contributions of the cooperative.

(4) Retained earnings prescribed by Presidential Decree held by a corporation, etc. may be converted to a reserve under Article 50 following a resolution by a general meeting.

(5) If it is necessary for a corporation, etc. to file a report to, or obtain authorization, permission, authorization, etc. (hereinafter referred to as "authorization, permission, etc.") from the head of a related administrative agency, among matters to be resolved by a general meeting for organizational change to a cooperative under paragraph (1), the corporation shall obtain such authorization, permission, etc. in advance.

(6) Where a general meeting passes a resolution under paragraph (1), a corporation, etc. shall report matters concerning organizational change to a cooperative, to the Mayor/Do Governor having jurisdiction over the seat of the principal office of the corporation, etc., as prescribed by Presidential Decree.

(7) A Mayor/Do Governor shall notify a reporter of whether to accept a report within 20 days from the date of receiving such report prescribed in paragraph (6). <Added on Dec. 31, 2020>

(8) Where a Mayor/Do Governor fails to notify a reporter of whether to accept a report within the period prescribed in paragraph (7) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, a report shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with prescribed in statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020>

[This Article Added on Jan. 21, 2014]

Article 71(Reporting on establishment) #

(1) Where cooperatives intend to establish a federation of cooperatives (hereinafter referred to as "federation"), at least three cooperatives qualified for membership shall prepare the articles of association as promoters, and report the establishment of the Federation to the Minister of Planning and Budget following a resolution at the inaugural general meeting. The same shall also apply where the federation intends to modify reported matters. <Amended on Jan. 21, 2014; Oct. 1, 2025>

(2) The Minister of Planning and Budget shall notify the reporting person of whether the report is accepted or the report of change is accepted within 20 days from the date of receipt of the report or change report under paragraph (1). <Amended on Mar. 31, 2020; Oct. 1, 2025>

(3) Where the Minister of Planning and Budget fails to notify a reporting person of whether to accept or the report or accept a change report within the period prescribed in paragraph (2) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, an acceptance of a report or a report of change shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with prescribed in statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020; Oct. 1, 2025>

(4) The resolution at the inaugural general meeting shall be passed with the attendance of a majority of the cooperatives that have submitted a letter of consent to establishment to promoters before the opening of the inaugural general meeting, and by an affirmative vote of not less than 2/3 of persons present at the meeting. <Amended on Mar. 31, 2020>

(5) Except as provided in paragraphs (1) through (4), matters necessary for report of establishment, change of report, return or supplement of report shall be prescribed by Presidential Decree. <Added on Jan. 21, 2014; Mar. 31, 2020>

Article 80-2(Mutual aid programs) #

(1) Notwithstanding Article 80 (3), the federation may conduct mutual aid programs (referring to programs the federation conducts for members who pay fees for mutual aid within the extent of a reserve made with fees for mutual aid paid by members for the purpose of mutual aid among the members) for mutual aid among the members thereof; provided, a guarantee program needed to fulfill an obligation or perform a duty of a member shall be excluded.

(2) Where the federation intends to conduct mutual aid programs under paragraph (1), it shall obtain authorization from the Minister of Planning and Budget. The same shall also apply where it intends to change approved matters. <Amended on Oct. 1, 2025>

(3) The Minister of Planning and Budget shall notify the applicant of whether or not the authorization is granted within 60 days from the date of receipt of the application for authorization under paragraph (2). <Added on Mar. 31, 2020; Oct. 1, 2025>

(4) Where the Minister of Planning and Budget fails to notify an applicant of whether authorization is granted within the period prescribed in paragraph (3) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, an acceptance of a report or a report of change shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with prescribed in statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020; Oct. 1, 2025>

(5) Matters necessary for authorization, such as requirements and procedures for authorization, under paragraph (2), shall be prescribed by Presidential Decree. <Amended on Mar. 31, 2020>

(6) The Minister of Planning and Budget may formulate and operate standards necessary to supervise mutual aid programs for the healthy growth of mutual aid programs and the protection of contracting parties. <Amended on Mar. 31, 2020; Oct. 1, 2025>

[This Article Added on Jan. 21, 2014]

Article 85(Authorization for establishment) #

(1) When it is intended to establish a social cooperative, at least five persons qualified for membership shall prepare articles of association as promoters, table the articles of association at the inaugural general meeting for a resolution, and then obtain authorization therefor from the Minister of Planning and Budget. <Amended on Oct. 1, 2025>

(2) A resolution at the inaugural general meeting shall be passed with the attendance of a majority of persons who have submitted a letter of consent to establishment to promoters before the opening of the inaugural general meeting and by an affirmative vote of not less than two-thirds of persons present at the meeting.

(3) The Minister of Planning and Budget shall authorize the establishment under paragraph (1), except in any of the following cases: <Amended on Mar. 31, 2020; Oct. 1, 2025>

1. If documents required for authorization for establishment are inadequately prepared;

2. If the proceedings for establishment, articles of association, or any content of a business plan contravenes a statute;

3. Other cases that do not meet the criteria for authorization of establishment.

(4) The Minister of Planning and Budget shall notify the applicant of whether or not the authorization is granted within 60 days from the date of receipt of the application for authorization under paragraph (1). <Added on Mar. 31, 2020; Oct. 1, 2025>

(5) Where the Minister of Planning and Budget fails to notify an applicant of whether authorization is granted within the period prescribed in paragraph (4) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, an acceptance of a report or a report of change shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with prescribed in statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020; Oct. 1, 2025>

(6) Detailed matters regarding the procedure for filing an application for authorization for establishment under paragraphs (1) and (3), the number of members, the amount of contribution, other criteria necessary for authorization, and the method of authorization shall be prescribed by Presidential Decree. <Amended on Mar. 31, 2020>

Article 86(Article of association) #

(1) The articles of association of a social cooperative shall include the following matters:

1. Objectives:

2. Name and the principal place of business;

3. Qualification for members and proxies;

4. Matters regarding admission to, and withdrawal and expulsion from, a cooperative;

5. The value of a contribution unit, the method and timing for payment, and the limit on the number of contribution units of each member;

6. Matters regarding rights and obligations of members;

7. Matters regarding the appropriation of a surplus and the disposal of deficits;

8. Matters regarding the method of accumulating reserves and the use of reserves;

9. Matters regarding the scope of business and accounting;

10. Matters regarding organs and executive officers;

11. Matters regarding the method of giving public notification;

12. Matters regarding dissolution;

13. Matters regarding the transfer of contributions;

14. Other matters necessary for the operation of the general assembly and the board of directors.

(2) An amount of one contribution unit under paragraph (1) 5 shall be fixed uniformly. <Added on Jan. 21, 2014>

(3) An amendment to articles of association of a social cooperative shall become effective only when it is authorized by the Minister of Planning and Budget. <Amended on Jan. 21, 2014; Oct. 1, 2025>

(4) The Minister of Planning and Budget shall notify the applicant of whether or not the authorization is granted within 10 days from the date of receipt of an application for authorization to amend the articles of association under paragraph (3). <Added on Mar. 31, 2020; Oct. 1, 2025>

Article 101(Merger and division) #

(1) A social cooperative may initiate a merger or a division with the resolution thereon by the general assembly after it prepares a merger agreement or a division plan.

(2) A merger or division of a social cooperative shall be subject to authorization by the Minister of Planning and Budget. <Amended on Oct. 1, 2025>

(3) A social cooperative surviving or newly established as a consequence of a merger or division shall succeed to the rights and obligations of the social cooperative dissolved as a consequence of the merger or division.

(4) The provisions of Article 85, 86, and 88 shall apply mutatis mutandis to social cooperatives established pursuant to paragraph (1).

(5) Deleted. <Jan. 21, 2014>

(6) No social cooperative shall merge with any legal entity, organization, or cooperative other than social cooperatives under this Act nor be split off into any legal entity, organization, or cooperative other than social cooperatives under this Act.

(7) Notwithstanding paragraph (6), if a social cooperative obtains authorization from the Minister of Planning and Budget, it may merge the following corporations: <Added on Jan. 21, 2014; Mar. 31, 2020; Oct. 1, 2025>

1. A stock company incorporated pursuant to the Commercial Act;

2. A limited company incorporated pursuant to the Commercial Act;

3. A limited liability company incorporated pursuant to the Commercial Act;

4. An incorporated association established pursuant to the Civil Act;

5. A cooperative.

(8) The Minister of Planning and Budget shall notify the applicant of whether or not the authorization is granted within 60 days from the date of receipt of the application for authorization under paragraph (7). <Added on Mar. 31, 2020; Oct. 1, 2025>

(10) Matters necessary for criteria and procedures for authorization under paragraph (7) shall be prescribed by Presidential Decree. <Added on Jan. 21, 2014; Mar. 31, 2020>

(11) Article 53 and 54 shall apply mutatis mutandis to the merger and division of social cooperatives. <Amended on Jan. 21, 2014; Mar. 31, 2020>

Article 105-2(Organizational change of cooperatives, nonprofit incorporated associations, corporations, etc.) #

(1) A cooperative or corporation under the following subparagraphs (hereafter referred to as "corporation subject to organizational change" in this Article and Article 108-3) may change its organization to a social cooperative under this Act through a resolution passed at a general meeting with the consent of all constituent members. In such cases, a corporation subject to organizational change and a social cooperative whose organization has been changed shall be deemed the same corporation in terms of the rights and obligations: <Amended on Mar. 2, 2016; Mar. 31, 2020>

1. A cooperative established pursuant to this Act;

2. A nonprofit incorporated association established pursuant to the Civil Act;

3. A nonprofit incorporated association established pursuant to the Act other than the Civil Act, such as a consumer cooperative established pursuant to the Consumer Cooperatives Act;

4. A corporation, etc.

(2) Notwithstanding paragraph (1), where the number of constituent members of a corporation subject to organizational change under paragraph (1) 2 and 3 exceeds 200, such corporation may change its organization to a social cooperative under this Act through a resolution passed at its general meeting with the consent of at least 2/3 of its constituent members. <Added on Mar. 2, 2016>

(3) The following matters on a social cooperative whose organization is changed shall be decided through a resolution at a general meeting under paragraph (1): <Amended on Mar. 2, 2016>

1. Articles of association;

2. Capital invested;

3. Other matters necessary for organizational change to a social cooperative.

(4) Organizational change to a social cooperative under paragraph (1) shall not allow an amount larger than the amount of the existing net assets of an existing corporation subject to organizational change to be the total amount of capital invested of the social cooperative. <Amended on Mar. 2, 2016>

(5) Retained earnings prescribed by Presidential Decree, held by a corporation subject to organizational change, may be converted to a reserve under Article 97 through a resolution passed at a general meeting. <Amended on Mar. 2, 2016>

(6) Among matters decided at a general meeting for organizational change to a social cooperative under paragraph (1), where it is necessary for a corporation subject to organizational change to obtain authorization, permission, etc. from the head of a related administrative agency, it shall obtain such authorization, permission, etc. first. <Amended on Mar. 2, 2016>

(7) Where a general meeting passes a resolution under paragraph (1), a corporation subject to organizational change shall obtain approval for organizational change to a social cooperative from the Minister of Planning and Budget, as prescribed by Presidential Decree. <Amended on Mar. 2, 2016; Oct. 1, 2025>

(8) The Minister of Planning and Budget shall authorize the establishment under paragraph (7), except in any of the following cases: <Added on Mar. 31, 2020; Oct. 1, 2025>

1. In case the procedure for organizational change is in violation of statutes and regulations;

2. If the contents of the articles of association and business plan are in violation of statutes and regulations;

3. Where organizational change to a social cooperative does not meet the standards deemed required therefor and publicly notified by the Minister of Planning and Budget.

(9) The Minister of Planning and Budget shall notify the applicant of whether or not the authorization is granted within 60 days from the date of receipt of the application for authorization under paragraph (7). <Added on Mar. 31, 2020; Oct. 1, 2025>

(10) Where the Minister of Planning and Budget fails to notify an applicant of whether authorization is granted within the period prescribed in paragraph (9) or of the extension of period of handling prescribed in statutes or regulations pertaining to handling civil petitions, an acceptance of a report or a report of change shall be deemed to have been accepted on the day following the day on which the period expires (in case the processing period has been extended or re-extended in accordance with prescribed in statutes or regulations pertaining to handling civil petitions, referring to the relevant processing period). <Added on Mar. 31, 2020; Oct. 1, 2025>

[This Article Added on Jan. 21, 2014]

Article 111(Supervision) #

(1) The Minister of Planning and Budget shall respect the autonomy of social cooperatives and supervise their business affairs and may issue an order necessary for supervision, as provided for in this Act. <Amended on Jun. 9, 2020; Oct. 1, 2025>

(2) In any of the following cases, the Minister of Planning and Budget may require a social cooperative (including a cooperative in the process of establishment; hereafter the same shall apply in this Article) to report matters regarding its business and property or may assign public officials under his or her control to inspect the current status of the business affairs of a social cooperative, its accounting books, documents, and other necessary matters: <Amended on Oct. 1, 2025>

1. Where it is necessary to ascertain whether or not it complies with the authorization and the procedure for establishment under Article 85;

2. Where it is necessary to ascertain whether or not it violates this Act, any order under this Act, or its articles of association;

3. Where it is necessary to ascertain whether or not its business violates a relevant statute.

(3) The Minister of Planning and Budget shall investigate the activities of social cooperatives ex officio or upon report, and order to correct their business and other necessary measures for social cooperatives that are deemed not to actually be active by setting a certain time limit as they fall under any of the following: <Added on Mar. 31, 2020; Oct. 1, 2025>

1. Where one year or more has passed since the number of members is less than the minimum number of promoters under Article 85 (1);

2. Where a general meeting under Article 28, which is applied mutatis mutandis pursuant to Article 92, has not been held for two consecutive years or more;

3. Where the business of a social cooperative under Article 93 has not been carried out continuously for one year or more.

(3) A public official who conducts an inspection under paragraph (2) shall carry with him or her an identification card indicating his or her authority and shall produce it to persons involved. <Amended on Mar. 31, 2020>

(4) Where the Minister of Planning and Budget discovers according to the results of supervision under paragraph (1) that a social cooperative has violated this Act, any order under this Act, or its articles of association, he or she may order it to take measures necessary to correct such violation. <Amended on Mar. 31, 2020; Oct. 1, 2025>

(5) If necessary to efficiently enforce this Act and to establish policies on social cooperatives, the Minister of Planning and Budget may demand the head of a related central administrative agency to investigate, inspect, or examine a social cooperative, to require a social cooperative to submit data, or to take necessary corrective measures. <Amended on Mar. 31, 2020; Oct. 1, 2025>

Article 117(Penalty provisions) #

(1) If an executive officer, employee, or liquidator of cooperative, etc. and federation of cooperatives, etc. inflicts an injury or a loss upon the cooperative, federation of cooperatives, social cooperative, or federation of social cooperatives by any of the following acts, he or she shall be punished by imprisonment with prison labor for not more than seven years or by a fine not exceeding 70 million won. In such cases, imprisonment with prison labor and a fine may be imposed concurrently: <Amended on Jan. 21, 2014; Mar. 31, 2020>

1. If he or she uses funds for any purpose other than the purposes of cooperative, etc. and federation of cooperatives, etc.;

2. If he or she disposes of or uses assets of cooperative, etc. and federation of cooperatives, etc. for speculative investment.

(2) If an executive officer, employee, or liquidator of cooperative, etc. and federation of cooperatives, etc. commits any of the following acts, he or she shall be punished by imprisonment with prison labor for not more than three years or by a fine not exceeding 30 million won: <Amended on Jan. 21, 2014; Mar. 31, 2020>

1. If he or she violates any of the provisions of Article 45 (3), 50 (1) and (3), 51 through 53, 55, 58, 80 (3), 97 (1) and (3), 98, 103, and 104 (including cases to which Article 82, 83, 100, 115 or 115-7 through 115-9 shall apply mutatis mutandis);

2. If it is discovered that he or she has filed for registration by fraud or other wrongful means;

3. If he or she executed an affair subject to resolution by the general assembly without such resolution.

(3) Any person who falls under any of the following subparagraphs shall be punished by imprisonment with prison labor for not more than two years or by a fine not exceeding 20 million won: <Amended on Jan. 21, 2014; Mar. 31, 2020>

1. A person who participates in an election of public officials, in violation of Article 9 (2);

2. A person who violates Article 37 (including cases to which Article 79, 92, 115 or 115-6 shall apply mutatis mutandis).

Article 119(Administrative fines) #

(1) Any of the following persons shall be punished by an administrative fine not exceeding two million won: <Amended on Jan. 21, 2014; Mar. 31, 2020>

1. Cooperative, etc. or federation of cooperatives, etc. that use an overlapping or confusing name, in violation of Article 3 (2);

2. A person who uses words under Article 3 (1) or words similar thereto in its name, in violation of paragraph (3) of the said Article;

3. Federation of cooperatives, etc. that fails to comply with an order to prohibit the use of a name or to correct the name under Article 3 (5).

(2) If cooperative, etc. or federation of cooperatives, etc. falls under any of the following subparagraphs, it shall be punished by an administrative fine not exceeding two million won: <Amended on Mar. 31, 2020>

1. If the number of contribution units per member or member cooperative exceeds the limit on number of contribution units, in violation of Article 22 (2) (including cases to which Article 76, 91, 115 (1) and 115-5 (1) and (2) shall apply mutatis mutandis);

2. In case of exceeding the limit of the total amount of preferred contribution, in violation of Article 22-2 (2) and (3);

3. If it grants its member unequal voting right, in violation of Article 23 (1) (including cases to which Article 91 shall apply mutatis mutandis);

4. Where a person other than a member of a cooperative is allowed to use the business of a cooperative, etc., in violation of Article 46, 81 and 95 (including cases applied mutatis mutandis pursuant to Article 115 (2) and 115-7);

5. In case of exceeding the total business limit, interest rate, loan limit, scope of mutual aid, mutual aid, mutual aid contract, mutual aid membership fee, etc. in violation of Article 94.

(3) If an executive officer, employee or liquidator of cooperative, etc. or federation of cooperatives, etc. falls under any of the following subparagraphs, he or she shall be punished by an administrative fine not exceeding one million won: <Amended on Jan. 21, 2014; Mar. 31, 2020>

1. If he or she neglects reporting or registration;

2. If he or she neglects to keep documents under Article 49 (2) (including cases to which Article 82 and 115-8 (1) shall apply mutatis mutandis) or 96 (2) (including cases to which Article 115 (3) and 115-8 (2) shall apply mutatis mutandis);

3. If he or she neglects to disclose details of its operation pursuant to Article 49 (including cases where it is applied mutatis mutandis pursuant to Article 82 and 115-8 (1)), 49-2 (including cases where it is applied mutatis mutandis pursuant to Article 82), 96 (including cases where it is applied mutatis mutandis pursuant to Article 115 (3) and 115-8 (2)) and 96-2 (including cases where it is applied mutatis mutandis pursuant to Article 115 (3) and 115-8);

4. If he or she makes a false statement or submits a false report to a supervisory agency or the general assembly, or conceals a fact;

5. If he or she refuses, interferes with, or evades an inspection of a supervisory agency.

(4) Administrative fines under paragraphs (1) through (3) shall be imposed and collected by the Minister of Planning and Budget or the competent Mayor/Do Governor, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025>

FRAMEWORK ACT ON COOPERATIVES

Article 1(Purpose) #

Article 2(Definitions) #

Article 3(Naming) #

Article 4(Legal personality and domicile) #

Article 5(Objectives of establishment) #

Article 6(Basic principles) #

Article 7(Responsibilities of cooperative, etc.) #

Article 8(Cooperation with other cooperatives) #

Article 9(Prohibition of involvement in election of public officials) #

Article 10(Cooperation by central government and public organizations) #

Article 10-2(Management support) #

Article 10-3(Educational and training support) #

Article 11(Policies on cooperatives) #

Article 11-2(Council for Cooperative Policy Deliberation) #

Article 12(Cooperatives day) #

Article 13(Relationship to other statutes) #

Article 14(Application mutatis mutandis of other statutes) #

Article 15(Reporting on establishment) #

Article 15-2(Issuance of written confirmation of report) #

Article 16(Article of association) #

Article 17(Bylaws or regulations) #

Article 18(Transfer of administrative affairs for establishment and payment of contributions) #

Article 19(Establishment of cooperatives) #

Article 20(Qualification for membership) #

Article 21(Admission) #

Article 22(Contribution and liability) #

Article 22-2(Preferred contribution) #

Article 23(Voting rights on resolution or election) #

Article 24(Withdrawals) #

Article 25(Expulsion) #

Article 26(Right to claim refund of share and suspension of refund) #

Article 27(Withdrawing member's share of deficits) #

Article 28(General assembly) #

Article 29(Matters subject to resolutions by general meeting) #

Article 30(Minutes of general meetings) #

Article 31(General meeting of representatives) #

Article 32(Board of directors) #

Article 33(Matters subject to resolution by board of directors) #

Article 34(Executive officers) #

Article 35(Term of office of executive officers) #

Article 36(Disqualification as executive officers) #

Article 36-2(Separate sentence of fine) #

Article 37(Restrictions on election campaign) #

Article 38(Organization and operation of election committee) #

Article 39(Duties and liability of executive officers) #

Article 40(Dismissal of executive officers) #

Article 41(Duties of president and directors) #

Article 42(Duties of auditors) #

Article 43(Auditors' authority to represent) #

Article 44(Prohibition of concurrent office of executive officers and employees) #

Article 45(Business activities) #

Article 46(Use of services) #

Article 47(Fiscal year) #

Article 48(Business plans and budget for revenue and expenditure) #

Article 49(Transparency of operation) #

Article 49-2(Public announcement of management) #

Article 50(Legal reserves and voluntary reserves) #

Article 51(Compensation for losses and distribution of surplus) #

Article 52(Approval of report on settlement of accounts) #

Article 53(Resolutions on reduction of contributions) #

Article 54(Creditors' objection against reduction of contributions) #

Article 55(Prohibition of acquisition of share of contributions) #

Article 56(Merger and division) #

Article 57(Dissolution) #

Article 57-2(Dissolution of dormant cooperative) #

Article 58(Liquidators) #

Article 59(Disposal of residual property) #

Article 60(Application mutatis mutandis of the Civil Act) #

Article 60-2(Organizational change of corporation, etc.) #

Article 61(Registration of establishment) #

Article 62(Registration for establishment of branch offices) #

Article 63(Registration for relocation) #

Article 64(Registration of changes) #

Article 65(Registration for merger) #

Article 66(Registration for dissolution) #

Article 66-2(Registration for continuation) #

Article 67(Registration for liquidator) #

Article 68(Registration for closing of liquidation) #

Article 68-2(Registration of organizational change) #