This paper deals with the controversy on the implementation of the two provisions in the Korean Commercial Code, i. e., article 399 and 401. I reviewed here the view points of scholar and judicial precedents as well.
The Commercial Code article 399 ...
This paper deals with the controversy on the implementation of the two provisions in the Korean Commercial Code, i. e., article 399 and 401. I reviewed here the view points of scholar and judicial precedents as well.
The Commercial Code article 399 prescribes that a director of Corporation has a personal liability for the damages to the Corporation caused by the violation of incorporation or the neglegence of his duty on the Corporation. The article 401 also says that the director has the personal liability for the damges to the third person caused by the intention or gross neglence of his duty.
It seems that these provisions are playing an important role in the protection of Corporation and third person according to the role extention of Corportation in Korea. The weakpoints, however, can be detected as follows. First, in the article 399, there is a controversy in terms of the director's liability in the Corporation. In other words, it is not clear whether liability with fault or without fault. Second, in the article 401, the meanings of director's liability is not clear. That is, it is not clear whether his liability is based on a particular provision or his tortions behavior, whether his liability should to the direct or indirect damage, or both of them, and whether the shareholder can be involved in the meaning of the third person, (June. 1987).