1. The Client's Situation
The client company needed a legal review of the obligation to form a board of directors depending on the scale of its capital, the decision-making method of joint representative directors, and the procedure for interim dividends. In particular, it needed a clear legal determination on whether the representative director could carry out major decisions alone where no board of directors had been formed, on the signature requirements for joint representative directors, and on the lawful procedure for interim dividends.
2. Your Legal Team's Advice
After reviewing the company's articles of incorporation and the provisions of the Commercial Act, Your Legal Team presented a direction that would secure legal stability.
(1) Formation of the board of directors: We confirmed the obligation to form a board of directors depending on the capital requirement, and organized the scope within which it could be replaced by a resolution of the representative director without a board of directors.
(2) Decision-making by joint representative directors: We reviewed the legal authority and signature requirements of joint representative directors, and advised on the conditions under which a single signature could be valid in certain situations.
(3) Interim dividend procedure: We determined whether it could proceed by a decision of the representative director without a board resolution, and proposed improvements to enhance the clarity of the wording of the articles of incorporation.
3. Result
Through Your Legal Team's advice, the client was able to devise a way to carry out decision-making while minimizing legal risk even without a board of directors. In addition, by clearly organizing the legal authority of the joint representative directors, it reduced confusion in the decision-making procedure, and it became an opportunity to more clearly arrange the interim dividend procedure.