Private companies or closed corporations account for a major part of
Korean economy. Compared to their important role in the labor or
product markets in Korea, legal analysis on private companies from a
corporate law perspective have not been sufficiently explored. The
scholars and legislators have rather focused upon how to boost private
companies’ economic activities through financial or technical supports,
especially on small and medium sized enterprises.
The contribution of this paper is to provide a corporate law angle for
regulating or supporting private companies by way of comparative legal
research of the European law. In August 2008, the Commission of the
European Communities proposed a Council Regulation on a European
Private Company (Societa Privata Europaea, SPE). This proposal, aimed to
harmonize the private company regulation in a single E.U. market, is
followed by heated discussion and still under a complicated negotiation
among member countries. The paper also addresses the Companies Act
2006 of the U.K. which has great influence on the European regulation
on the private companies and has recently adopted detailed provisions
on private companies. The review of the U.K. law would also be
helpful to understand the proposal by the E.U. Commission because
some provisions of the proposal themselves are obviously based upon
the U.K. company law.
For the sake of simplicity and more organized analysis, the paper
devoted itself to two major areas in regulating private companies: inside
relations among shareholders including corporate institutions and
decision-making process; and outside relations between a private
corporation and its creditors including legal capital and the disclosure of
financial information.