Korean Nonprofit Association Dissolution Procedure — General Meeting, Registration, Creditor Notice and Liquidation

Dissolving an incorporated association under the Korean Civil Act does not require a permit from the competent ministry. Once a ground for dissolution arises, the liquidator registers the dissolution within 3 weeks of taking office and reports it to the competent ministry within the same period, calls for creditor claims by public notice, settles debts, hands over the remaining property, and registers and reports the completion of liquidation within 3 weeks.

For the establishment stage, see our nonprofit corporation establishment guide.

Grounds for dissolution and the general meeting resolution

Under the Civil Act, any corporation dissolves on expiry of its duration, achievement or impossibility of its purpose, any other ground set in the articles of incorporation, bankruptcy, or revocation of its establishment permit. An incorporated association also dissolves when it has no members left or by resolution of the general meeting.

A dissolution resolution needs the consent of at least 3/4 of all members — all members, not only those present — unless the articles provide otherwise. This is stricter than an ordinary resolution (a majority of members present and a majority of their votes). The meeting is convened by a notice stating the agenda sent 1 week in advance, and unless the articles say otherwise only the notified items can be resolved. Members may vote in writing or by proxy. For drafting dissolution clauses, see articles of incorporation and approval.

If the corporation can no longer pay its debts in full, the directors must file for bankruptcy without delay. Dissolution by bankruptcy follows bankruptcy proceedings, not the registration and report steps below.

Liquidation steps after dissolution

A dissolved corporation has rights and duties only within the scope of liquidation. The steps are:

1. Liquidator — except in bankruptcy, the directors become liquidators unless the articles or a general meeting resolution decide otherwise. If no one can serve, the court may appoint one.
2. Dissolution registration — within 3 weeks of taking office, the liquidator registers, at the location of the principal office, the ground and date of dissolution, the liquidator's name and address, and any limit on the liquidator's power of representation.
3. Dissolution report — the same items are reported to the competent ministry within 3 weeks of taking office. Ministry rules require the report to be filed without delay after the registration; under the Ministry of Justice rule it is accompanied by the property inventory at dissolution, an outline of how the remaining property will be disposed of, the articles at dissolution, and the minutes of the general meeting if it resolved the dissolution.
4. Creditor notice — within 2 months of taking office, publish a notice at least 3 times asking creditors to file claims within a period of at least 2 months, stating that claims not filed in time will be excluded from liquidation. Known creditors must be notified individually.
5. Payment of debts — debts may not be paid during the claim period. If the assets are clearly insufficient, the liquidator must file for bankruptcy without delay and publish this.
6. Remaining property and completion — hand over the remaining property and, once liquidation is complete, register and report the completion within 3 weeks.

Deadlines at a glance

Step	Deadline	Where
Dissolution registration	Within 3 weeks of the liquidator taking office	Location of the principal office
Dissolution report	Within 3 weeks of taking office; without delay after registration	Competent ministry
Creditor notice	At least 3 times within 2 months of taking office	Same method as court notices of registered matters
Claim period	At least 2 months	Creditors to the liquidator
Completion registration and report	Within 3 weeks of completion	Principal office location and competent ministry

The court inspects and supervises dissolution and liquidation. A liquidator who neglects registration, fails to publish or publishes an improper notice, files a false report, or pays debts during the claim period is subject to an administrative fine. Forms and attachments vary by ministry, so check the rule of your competent ministry.

Remaining property and completion of liquidation

The property of a dissolved corporation goes to the person designated in the articles. If the articles name no one and set no method, the directors or liquidators may dispose of it for a similar purpose with the permission of the competent ministry, and an incorporated association also needs a general meeting resolution. Property not disposed of this way vests in the national treasury. After completion, the liquidator registers it and, under the Ministry of Justice rule, files a completion report with the ministry after the registration.

YouSun Administrative Agency (Chief Administrative Agent Jung Yu-sun)