At issue are whether expelling a shareholder is permitted in a stock company, and the validity of articles of incorporation or internal rules that, when specific grounds such as disputes among shareholders arise, expel a particular shareholder and have the company refund that shareholder's capital contribution and the like. The company's expulsion of a shareholder who is also an appraiser belonging to an appraisal firm organized as a stock company contains not only a declaration of intent to expel the shareholder but also a declaration of intent to dismiss the person from the position of affiliated appraiser, so the question is whether such a declaration of intent by the company can exist validly regardless of whether the expulsion of the shareholder is void.

In a free-market economy, such restrictions are unjust even for financial institutions, but they are understandable in that they are standards for financial companies with a strong public character. However, uniformly imposing by statute an upper limit on the length of service for the outside directors of all listed companies is a totalitarian idea. It infringes companies' private autonomy and outside directors' constitutional freedom to choose an occupation. As far as I know, Korea is the only country in the world that imposes outside directors' terms by statute. It is also a problem that the term "affiliated company" suddenly appears in the Enforcement Decree when the Commercial Act has no such concept at all.

In Articles 218(6), 220 and 269, the Commercial Act provides expulsion as one of the grounds for a member's withdrawal from partnership companies and limited partnership companies, which are personal companies, and provides that, where there are grounds for expulsion, a request to the court for a declaration of that member's expulsion may be made by resolution of a majority of the other members. By contrast, for stock companies it has no provisions on the basis or procedure for expelling shareholders; this is legislation that takes into account the nature of the stock company as a capital company whose essence is a combination of capital rather than of persons. So even if the company's shareholders are limited to a small number or relations among shareholders are based on mutual trust, such circumstances alone do not allow the provisions on expulsion for personal companies (partnership and limited partnership companies) to be applied by analogy to the stock company, a capital company, so as to permit expulsion of shareholders. Because it violates Article 341 of the Commercial Act, which prohibits acquiring treasury shares except for grounds prescribed by law (see Supreme Court decision 2001Da44109 of May 16, 2003), articles of incorporation or internal rules providing for the company to refund such a shareholder's capital contribution and the like are ultimately contrary to the essence of the stock company as a capital company, violate the Commercial Act, and are void.

Lee Chul-song, 2020, Standards for Permitting Non-Profit Contributions by Companies: Based on the Kangwon Land Case, Ministry of Justice, Journal of Advanced Commercial Law Studies No. 89

Son Young-hwa, 2018, Corporate Division and Whether Sanctions on Unfair Business Operators Are Succeeded, Ministry of Justice, Journal of Advanced Commercial Law Studies No. 83

Even if a company's transactions under the Commercial Act are made only in the books without any movement of goods, where fees equal to a certain percentage of the transaction amount were actually paid to the plaintiff and the company for each transaction, they can be regarded as having intended that a sale with that content take place between them. However, the transaction in this case did not take place on that day; following market practice, the transactions made over the previous three months were carried out all at once, so this form was adopted merely for convenience, and the question is whether this point alone allows the transaction in this case to be regarded as a sham act constituting a fictitious declaration of intent by collusion.

For reference, the five-year commercial limitation period is based on Article 64 of the Commercial Act, and if another statute provides a shorter period, that provision applies. Article 398 on directors' self-dealing was changed by the 2011 amendment to the Commercial Act, strengthening the board approval requirement to approval by at least two-thirds of the directors and expanding its scope to major shareholders and their related parties, so when citing 2002Da20544, a pre-amendment case, write it in comparison with the current provision. It is good to check the facts of the original judgment in the Supreme Court's comprehensive legal information service. In particular, the facts determine the conclusion, so be sure to read the original text as well.