JIPYONG LLC
KOREA LEGAL INSIGHT
New Treasury Shares Cancellation Requirement under the Korean Commercial Code: A Turning Point in Corporate Governance
April 6, 2026

Effective March 6, 2026, the Korean Commercial Code (“KCC”) requires, as a general rule, the cancellation of treasury shares within one year of acquisition.  The reform tightens the rules governing the retention and disposal of treasury shares and limits how they may be used in financing and corporate transactions.

 
1. Background
2. Mandatory Cancellation Requirement and Exceptions
3. Limits on the Uses of Treasury Shares
4. Time-Limited Carve-Out for Companies Subject to Foreign Ownership Caps
 

 

KLI Editors

26F, Grand Central A, 14 Sejong-daero, Jung-gu, Seoul T. +82-2-6200-1600 E. master@jipyong.com

 

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