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Successor Corporate Penalty Surcharge Liability by Corporate Division

  • DONG-A LAW REVIEW
  • 2010, (48), pp.715-735
  • Publisher : The Institute for Legal Studies Dong-A University
  • Research Area : Social Science > Law

KIM GUN SIC 1

1대법원

Accredited

ABSTRACT

This article analyzes legal regimes of successor corporate liability when a corporation received penalty surcharge by Fair Trade Commission after the corporation was already divided into another corporations otherwise dissolved. In this instance, the question is who bears the penalty surcharge liability which established prior to the date of its corporate division. Contingent corporation or new divided corporation? In general, it would be appropriate that both contingent corporation and new divided corporation have liability with regard to the penalty surcharge according to their division agreement. However, until now, there is no right answer to cover such liabilities. Because the liability which is above mentioned is grounded upon an unclear mixture of Corporation Act, FTC's regulations and Supreme Court decision. Moreover, if the contingent corporation divided again or closed their business, who bears responsibility for penalty surcharge relating to pre-distribution periods? And it is also unclear what date shall be executed to the previous wrongdoing prior to the filing of any charges. In order to solve these questions, in the United States Court ruled by common law but, in the end, most states have enacted regulations regarding successor corporate liability to provide clear answer. Because of the somewhat vague notions of derivate corporate liabilities based on the Corporation Act, FTC's regulations and Supreme Court decision, this article attempts to propose new enactment on the Korean FTC regulation. The proposal is that “The Fair Trade Commission shall discharge corporate successor liabilities of illegal activities against contingent corporation, new divided corporation, or new divided corporation's opposite corporation either prior to or within 3 years after the date of its division.” With this proposal, corporations may not evade penalty surcharge liability through corporate division, even if the division occurs before discharge.

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