If the Commercial Act's Special Offense of Breach of Trust Is Deleted, What Remains and What Gaps Open: Five Questions on Commercial Act Amendment Bill No. 2219817

The Bill Read and the Status Confirmed

This piece reads Bill No. 2219817, a Partial Amendment Bill to the Commercial Act. The bill is shown as proposed by Assembly Member Kim Seung-won and ten others on July 8, 2026, during the 437th (extraordinary) session of the National Assembly. The competent committee is the Legislation and Judiciary Committee, and as of the reference date of October 16, 2026, the National Assembly progress table records referral on July 9, 2026 as the last step. No tabling or resolution stage is shown.

The parts read are the reasons for the proposal and main contents shown on screen, and the reasons for the proposal, amended provisions, addenda and comparison table of old and new provisions in the PDF of the original bill. The amended provisions are short. The bill deletes the chapter heading "Chapter VII Penal Provisions" before Article 622, deletes Article 622, and reinserts "Chapter VII Penal Provisions" before Article 623. The addenda consist of a single line on the date of entry into force. The review report and the minutes were not read.

Sources for this section: National Participation Legislation Center, National Assembly legislative status: Partial Amendment Bill to the Commercial Act (No. 2219817) · PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817)

What the Current Commercial Act and Criminal Act Provide

As of the reference date, Article 622 (1) of the Commercial Act provides that where a promoter, managing partner, director, executive officer, member of the audit committee, or auditor of a company, a person acting on behalf of an officer under Article 386 (2), 407 (1), 415 or 567, a manager, or any other employee entrusted with a certain type of business or specific matters of the company's business obtains a pecuniary advantage, or causes a third person to obtain one, by an act in breach of his or her duties and thereby causes damage to the company, that person shall be punished by imprisonment with labour for not more than ten years or by a fine not exceeding KRW 30 million. Paragraph (2) applies the same to liquidators, persons acting on behalf of an officer under Article 542 (2), and incorporation committee members under Article 175. Article 624 punishes attempts of the offences in the preceding two Articles, that is, Articles 622 and 623, and Article 632 permits imprisonment with labour and a fine under Articles 622 through 631 to be imposed concurrently.

Article 355 (2) of the Criminal Act punishes as breach of trust the case where a person administering another's business obtains a pecuniary advantage, or causes a third person to obtain one, by an act in breach of his or her duties and thereby causes damage to the principal, and Article 356 punishes a breach of occupational duties by imprisonment with labour for not more than ten years or by a fine not exceeding KRW 30 million. The statutory penalty is the same as under Article 622 of the Commercial Act. Article 358 permits suspension of qualifications for not more than ten years to be imposed concurrently, and Article 359 punishes attempts. Article 3 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes aggravates the punishment of a person who commits an offence under Article 355 or 356 of the Criminal Act where the amount of gain is KRW 500 million or more, but Article 622 of the Commercial Act is not on that list.

Of the recent amendments to the Commercial Act referred to in the reasons for the proposal, the one confirmed in this piece is Article 382-3. As wholly amended on July 22, 2025, this Article provides that directors shall faithfully perform their duties for the company and its shareholders in accordance with statutes and the articles of incorporation (paragraph (1)), and shall protect the interests of the shareholders as a whole and treat the interests of all shareholders fairly (paragraph (2)).

Sources for this section: National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · National Law Information Center, current Criminal Act (Act No. 22007, in force October 2, 2026) · National Law Information Center, current Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Act No. 15256, in force March 20, 2018)

What the Bill Seeks to Change

The bill deletes Article 622. The reasons for the proposal cite the criticism that the special offence of breach of trust makes violations of company-law duties the object of punishment, blurring the boundary between civil and criminal liability, and mixes the functions of company law and criminal law, undermining the coherence and predictability of the legal system. They further propose that, since the framework of liability concerning directors' duty of loyalty and shareholder protection has been strengthened, violations of company-law duties should be dealt with mainly through civil liability and internal control mechanisms, and criminal liability according to the principles of general criminal law.

The adjustment of the chapter heading is needed because Article 622 is the first Article of Chapter VII. The bill deletes the chapter heading before Article 622 and inserts the same chapter heading before Article 623, so that the chapter on penal provisions begins at Article 623 after the deletion. The addenda provide for entry into force six months after promulgation and contain no application provisions or transitional measures. The bill does not amend any penal provision other than Article 622.

Sources for this section: PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817) · National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026)

What Will the Other Penal Provisions That Take the Persons Provided for in Article 622 (1) as Offenders Refer To?

Several provisions in the penal chapter of the Commercial Act do not list their offenders separately but borrow Article 622. Article 625 (offence of endangering company property) defines the offender as the persons provided for in Article 622 (1); Article 627 (offence of using false documents) and Article 628 (offence of fictitious payment, etc.) as the persons listed in Article 622 (1); and Article 630 (offence of bribery in office) as the persons provided for in Articles 622 and 623. Article 637 applies the penal provisions to the directors, etc. of a person provided for in Article 622, etc. where that person is a corporation. The concurrent-imposition provision in Article 632 also states its scope as beginning from Article 622.

The bill does not amend these provisions. Whether, after Article 622 is deleted, these references continue to refer to the promoters, directors, auditors and others listed in Article 622 (1) before deletion, or are left with nothing to refer to, cannot be settled from the wording alone. Where the offender is left undefined in a penal provision, the scope of punishment may be contested in light of the principle of nullum crimen sine lege. In particular, the offence of fictitious payment under Article 628 concerns conduct of a different character from the violations of company-law duties described in the reasons for the proposal, yet its provision on offenders may be unsettled together with the deletion of the special offence of breach of trust.

The reasons for the proposal take only the special offence of breach of trust as the object of revision and do not indicate any intention to touch the other penal provisions. Will the revision be accompanied by listing the offenders directly in each of Articles 625, 627, 628, 630 and 637, or will the cross-references be maintained in some other way?

Sources for this section: National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817)

What Actually Changes When the Matter Shifts to Occupational Breach of Trust under the Criminal Act?

The statutory penalty under Article 356 of the Criminal Act is imprisonment with labour for not more than ten years or a fine not exceeding KRW 30 million, the same as under Article 622 of the Commercial Act. If an officer's act in breach of duties causing damage to the company constitutes occupational breach of trust by a person administering another's business under the Criminal Act, the same act may be punished under the Criminal Act even without Article 622. Since Article 3 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes provides aggravated punishment for Article 356 of the Criminal Act where the amount of gain is KRW 500 million or more, in large cases the provisions of the Criminal Act and that Act are already at issue together.

Some things do change. The concurrent imposition of imprisonment with labour and a fine under Article 632 of the Commercial Act does not carry over to Article 356 of the Criminal Act, while the Criminal Act has the concurrent imposition of suspension of qualifications under Article 358. Article 622 of the Commercial Act requires damage to the company, whereas the Criminal Act requires damage to the principal. The boundary between civil and criminal liability that the reasons for the proposal take issue with, namely which violations of duty are punishable as breaches of duty, is likely to be determined in interpreting the offence of breach of trust under the Criminal Act as well by reference to the same company-law duties.

If so, what does the deletion actually add to the clarity of the boundary and the predictability that are the aims stated in the reasons for the proposal? This bill alone does not show whether deleting a single Article from the Commercial Act is sufficient, or whether the interpretive standards for the offence of breach of trust under the Criminal Act or rules on business judgment should be addressed together.

Sources for this section: National Law Information Center, current Criminal Act (Act No. 22007, in force October 2, 2026) · National Law Information Center, current Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Act No. 15256, in force March 20, 2018) · National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817)

Once the Listed Offenders Disappear, What Determines Whose Breach of Duty It Is?

Article 622 lists in its text the persons subject to punishment. The list extends to promoters and incorporation committee members at the stage of incorporation, persons acting on behalf of an officer appointed by the court, liquidators after dissolution, and entrusted employees. Article 355 (2) of the Criminal Act contains no such list and only the general requirement of a person administering another's business. After the deletion, whether each position is that of a person administering the company's business must be examined case by case.

In particular, since promoters and incorporation committee members of a company in the course of incorporation act at a stage when the company has not yet come into existence, who is to be regarded as the principal under the Criminal Act may become an issue. Article 622, by stating "causes damage to the company", resolved this question at the level of the provision. Nor does the Criminal Act provision alone directly show in what relationship with the company a court-appointed person acting on behalf of an officer or a liquidator administers its business.

If cases arise in which some of the listed positions are difficult to regard as offenders under the offence of breach of trust in the Criminal Act, is that an intended narrowing of the scope of punishment, or a gap to be filled by separate provisions?

Sources for this section: National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · National Law Information Center, current Criminal Act (Act No. 22007, in force October 2, 2026)

Why Does the Special Offence of Breach of Trust by Representatives of a Bondholders' Meeting Remain?

The bill deletes only Article 622 and leaves Article 623 in place. Article 623 provides that where a representative of a bondholders' meeting or a person executing its resolution obtains a pecuniary advantage, or causes a third person to obtain one, by an act in breach of his or her duties and thereby causes damage to the bondholders, that person shall be punished by imprisonment with labour for not more than seven years or by a fine not exceeding KRW 20 million. Its structure of punishing a breach of duty by a holder of a position defined in the Commercial Act is the same as that of Article 622.

The reasoning offered in the reasons for the proposal, namely that violations of company-law duties should be dealt with through civil liability and criminal liability left to general criminal law, appears equally applicable to Article 623. Conversely, if there is a reason to retain Article 623, how it differs from Article 622 needs to be explained. The expression "the preceding two Articles" in Article 624 also needs to be clarified as to what it refers to after Article 622 is deleted.

Is retaining Article 623 a deliberate choice for the protection of bondholders, and if so, how is the difference to be explained, and how will the cross-reference in Article 624 be amended?

Sources for this section: National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817)

Now That the Duty of Loyalty Extends to Shareholders, Who Is the Principal in Breach of Trust?

The reasons for the proposal cite the strengthening of the framework of liability concerning directors' duty of loyalty and shareholder protection as a ground for the deletion. The current Article 382-3 provides that directors shall perform their duties for the company and its shareholders and protect the interests of the shareholders as a whole. Since Article 622 punishes only where damage is caused to the company, violations of duties owed to shareholders were never the object of this Article in the first place.

Without Article 622, directors' criminal liability will be determined only under Article 355 (2) of the Criminal Act. The requirements under the Criminal Act, however, are a person administering another's business and damage to the principal. Now that Article 382-3 has extended directors' duties to shareholders, this bill does not determine whether shareholders can be regarded as the principal under the Criminal Act. If the intention, as stated in the reasons for the proposal, is to deal with violations of company-law duties as civil matters, an answer is also needed as to whether violations of duties owed to shareholders form a basis for criminal liability.

Does a director's violation of the duty of loyalty owed to shareholders fall within the offence of breach of trust under the Criminal Act, or does it remain a matter of civil liability only, and will that answer be laid down by statute or left to interpretation?

Sources for this section: National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · National Law Information Center, current Criminal Act (Act No. 22007, in force October 2, 2026) · PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817)

Commencement and remaining issues

The addenda propose entry into force six months after promulgation. This is a proposed condition, not a fixed date. As there are no application provisions or transitional measures, how cases prosecuted under Article 622 and pending trial at the time of entry into force are to be handled is left to Article 1 (2) of the Criminal Act. That provision requires the new Act to apply where, after the commission of a crime, the law is changed so that the act no longer constitutes a crime or the punishment becomes lighter.

If the same conduct may still be punished under Article 356 of the Criminal Act after Article 622 is deleted, whether this is a case in which the act no longer constitutes a crime, or one in which only the applicable provision needs to be changed, may be contested case by case. Will the handling of acts committed before entry into force and of pending cases be provided for in the addenda? This piece has not examined the balance with special breach-of-trust provisions in statutes other than the Commercial Act, and leaves whether those are to be revised as a remaining issue.

Sources for this section: PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817) · National Law Information Center, current Criminal Act (Act No. 22007, in force October 2, 2026)

What This Piece Has Not Examined

Case law on the special offence of breach of trust and occupational breach of trust, the review report and minutes, other contemporaneous bills to amend the Commercial Act and the Criminal Act, special breach-of-trust provisions in other statutes, and statistics on investigation and prosecution were not read. The current provisions were confirmed against the original texts in the National Law Information Center, and the middle dots in the statutory texts were rendered with adjusted notation. Beyond Article 382-3, the scope of the recent Commercial Act amendments referred to in the reasons for the proposal was not separately examined.

The scope of the questions is confined to the wording of the original bill and the current provisions. This piece neither supports nor opposes the bill, does not recommend legislation, and does not predict the outcome of its further processing.

Sources for this section: National Participation Legislation Center, National Assembly legislative status: Partial Amendment Bill to the Commercial Act (No. 2219817) · PDF of the original bill: Partial Amendment Bill to the Commercial Act (No. 2219817) · National Law Information Center, current Commercial Act (Act No. 21044, in force September 10, 2026) · National Law Information Center, current Criminal Act (Act No. 22007, in force October 2, 2026)