D&A Public Sector Relations Group's latest issue of its specialized legislative journal, the Policy&Business Report, is now available in digital format
The Third Commercial Act Amendment on Mandatory Cancellation of Treasury Shares Passes the Legislation and Judiciary Committee…Likely to Be Processed in Plenary Session on February 24
The third amendment to the Commercial Act, which mandates the cancellation of treasury shares, is expected to pass the plenary session of the National Assembly.
On February 23, the third amendment to the Commercial Act mandating the cancellation of treasury shares held by companies passed the plenary session of the National Assembly’s Legislation and Judiciary Committee.
Spearheaded by the Democratic Party of Korea lawmakers, the third amendment to the Commercial Act stipulates that companies must cancel newly acquired treasury shares within one year of the law’s enforcement, and treasury shares held prior to enforcement within one and a half years.
The business community’s request to exempt treasury shares acquired involuntarily, such as those obtained through mergers or conversion into holding companies, from the mandatory cancellation obligation, was rejected. However, the amendment allows companies to retain or dispose of treasury shares for specific purposes, including employee compensation, implementation of employee stock ownership programs, introduction of new technologies, or improvement of financial structure, if they obtain annual approval from the general shareholders’ meeting for their treasury share holding and disposal plans.
The Democratic Party of Korea announced that it aims to complete the National Assembly’s plenary session process in February. Previously, the ruling party passed the first amendment, which expanded the scope of directors’ fiduciary duties to include shareholders, and the second amendment, which mandated cumulative voting and expanded the separate election of audit committee members.
As the first-ever Korean law firm to issue specialized legislative journals, D&A Public Sector Relations Group has been publishing the monthly Policy & Business Report since August 2019. The February 2026 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from the opening of the 22nd National Assembly on January 15, 2026, to February 14, 2026, and selected and analyzed legislation with significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.
*D&A Public Sector Relations Group provides P&B Report subscription services. Please contact us at lc@draju.com for further inquiries.
.png)
