컨텐츠

Articles of Association

These are the Articles of Association of the
Korea Communications Industry Cooperative

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Chapter 1 General 
Article 1 (Establishment and name) This cooperative is established based on the SMALL AND MEDIUM ENTERPRISE COOPERATIVES ACT (hereinafter referred to as the 'law') and named as Korea Communications Industry Cooperative (hereinafter referred to as the cooperative). 

Article (2) The purpose of our cooperative is to ensure the sound development of the broadcasting and communication industry, advance the welfare of the members, and execute cooperative programs in order to promote autonomous economic activities, enhance the economic status of the members, and ensure the sound development of the national economy. 

Article 3 (Location) The office of the cooperative shall be located within the city of Seoul, and, based on a resolution by the board of directors, the cooperative may establish branch offices or dispatches in necessary locations inside and outside of Korea. 

Article 4 (Jurisdiction) The jurisdiction of the cooperative shall be the entire country. 

Article 5 (Notification and announcement) ① Notifications or announcements by the cooperative shall be made in writing to the members. However, if deemed necessary, such notifications or announcements may be made in nationally distributed newspapers.
② The period of the notice or announcement in item ① above shall be at least 7 days.
③ Notification to the members of the cooperative shall be made to the address of the member as specified in the registry of the member. However, if a member advises the cooperative of an alternative address, such alternative addresses shall apply.

Article 6 (No political involvement) ① The cooperative shall not be involved in any political activities. 
② The cooperative shall not support a certain political party or do anything to help a certain individual to be elected or prevent such a person from being elected.
③ No one shall be allowed to perform any activities specified in item 2 above.

Article 7 (No concurrent offices by civil servants) No civil servant shall be allowed to become an employee or an executive of the cooperative. However, a civil servant who has been elected in an election as per PUBLIC OFFICIAL ELECTION ACT may become an executive or an employee other than a full time executive or employee. 

Article 8 (Rules and conventions) Any other necessary issues to be governed shall be governed by relevant rules or conventions. 


Chapter 2 Members 

Article 9 (Qualification for membership) ① The members of the cooperative shall be persons and business cooperatives who are engaged in business areas set forth in Sub-category 264 of Korea Standard Industrial Classes within the domain of SMB businesses as per Item 1, Aricle2 (including the SMBs in accordance with item 3 in the same article) of the FRAMEWORK ACT ON SMALL AND MEDIUM ENTERPRISES.
② In order to facilitate its operation, the cooperative may admit SMBs of other business fields (Sub-category 265 under the Korea Standard Industrial Classes) than those specified in item 1 above.  In this case, the members from other domains shall not exceed 20 percent of the total membership.  
③ Even in the case of a person who does not fall within the criteria in Article 2 of FRAMEWORK ACT ON SMALL AND MEDIUM ENTERPRISES, if it is deemed necessary to admit such a person, who is engaged in the same industry, into the membership and designated in item 1, Article 4 of the Execution Decree of the law, such a person may be granted membership through a resolution by the board of directors after being recommended by at least 5 members. 
④ If a person other than an SMB is admitted in accordance with item 3 above, such a fact shall be notified to the Korea Federation of SMBs (hereinafter referred to as the federation). 
⑤ The cooperative shall verify the qualification of each member in accordance with item 1 and 2 above in each fiscal year. 

Article 9- 2 (Special member) Economic organizations, agencies/groups related to SMBs, or other related SMBs may be admitted as special members. 

Article 10 (Admission) ① A person who is qualified to become a member and wishes to become one shall prepare the designated application documents and submit them to the cooperative. 
② When such an application is received in accordance with item 1 above, the cooperative shall verify the qualification of the person and determine whether to grant membership. The notification of the decision shall be made within 2 weeks from the date when the application was submitted. 
③ The person who has been notified in accordance with item 2 above shall have the qualification to become a member. To acquire the state of membership, the applicant shall submit the admission fee and the fund determined in accordance with the no. of investment shares to the cooperative. 
④ If a qualified person is to join the cooperative, the cooperative may not refuse such an application without justification or apply more stringent conditions that those applied to the current members. 
⑤ A person who has been dismissed from the membership within the last one year period in accordance with paragraph 3, item 1 of Article 15 herein shall not rejoin the cooperative. 

Article 10-2 (Succession of the membership) ① If a qualified successor of a deceased member applies for membership within three months of succession, then, without prejudice to Article 10 above, the person shall be deemed to have become a member from the point of initiation of the succession. In this case, the succeeding member shall assume the rights and obligations of the deceased former member for the share of the succeeded. 
② If there are multiple successors to whom item 1 above may apply, only one of them, who is chosen by the successors, shall be applicable to item 1 above. 

Article 11 (Admission fee) ① The cooperative may charge its new members with a certain admission fee amount. 
② The amount and collection of the admission fee in item 1 above shall be specified in a separate convention. 

Article 12 (Capital Investment and Payment Method) ① A member shall make an investment of at least one share of the cooperative. The value of one share shall be 100,000 won.
② The number of shares held by a member shall not exceed 20 percent of the total number of shares.
③ The capital investment payment for the acquired shares shall entirely be paid to the cooperative within three weeks from the acquisition.
④ The cooperative shall issue an investment certificate certifying the payment of the capital investment for the payment made.
⑤ If a member wishes to obtain more shares, the member shall take designated steps and be allowed to make further capital investment according to a resolution by the board of directors. In such a case, the provisions in item 3 shall apply.
⑥ If a member temporarily ceases to perform its business, abolish a part of its business, or face other unavoidable causes, the member may make a request for reducing its shares. In this case, in accordance with the resolution by the board, the number of the shares of the member may be reduced, only at the end of a fiscal year.
⑦ A member shall not object to the cooperative through offsetting with regard to the payment of the capital investment.
⑧ Investments can be made in kind. In this case, the investor in kind shall submit the properties to be invested on the date of payment in its entirety to the place designated by the cooperative.
⑨ The cooperative may allow a member to conduct a revolving investment with the entire or a part of the surplus amount paid as dividends to the member. In this case, the rule in item 7 shall apply. 

Article 13 (Cost, Charges, and Fees) ① The cooperative shall charge the following costs for the operation of the cooperative.
1. Fixed or differentiated membership fee
2. Special membership fees charged to part of the members to promote the joint cooperative programs
3. Joint trade mark fee
4. The charges for the public procurement support to facilitate purchasing of the products of SMBs and development of new business opportunities
② The amounts and collection methods of the fees, charges, and costs, shall be specified in the convention.

Article 14 (Voluntary withdrawal) ① A member may withdraw from the membership with a thirty-days’ notice.
② Such a notice of withdrawal shall be made in writing, which shall include the cause of withdrawal.

Article 15 (Legal dismissal) ① A member shall be dismissed from the membership in any of the following cases;
1. Loss of qualification to become a member
2. Death or dissolution 
3. Expulsion
4. Announcement of bankruptcy
② The criteria of disqualification in paragraph 1 under item 1 above shall be in accordance with a resolution by the board.

Article 16 (Expulsion) Expulsion of a member in accordance with paragraph 3, item 1 of Article 15 shall be made through a resolution by the general convention to a member who falls within any of the following categories. In this case, the cooperative shall inform the relevant member of the cause of expulsion by no later than 10 days prior to the date of general convention and allow the person to make his/her statement at the general convention. 
1.  A member who failed to honor his/her duty to make the capital investment or pay the cost, charge, or fee, as well as other duties of a member. 
2.  A member who obstructed the operation of the cooperative or conducted other actions for such a purpose
3.  A member who violated the articles of association, rules, bylaws, or instructions by the supervising authority.
4.  A member who caused economic damages to the cooperative either through a deliberate act or material fault, or a member who dishonored or damaged the reputation of the cooperative. 

Article 17 (Repayment of the capital investment of a member who has withdrawn or been dismissed and its suspension) ① The cooperative shall, upon request from a member who has withdrawn or been dismissed, return the full amount of his/her share calculated in accordance with Article 18 herein on the properties of the cooperative as of the end of the immediately preceding fiscal year. 
② If the liability cannot be cleared with the entire properties of the cooperative, the withdrawing or dismissed member shall suffer the damages within the limit of his/her investment amount. 
③ If a member who has been dismissed or who has withdrawn has outstanding liabilities to the cooperative, the returning of the share in item 1 may be suspended. 
④ The claim for the capital investment shall be valid for 2 years. If the claim is not made within this period, the claim right shall expire. 

Article 18 (Range of the share) The share of the members in the properties of the cooperative shall be as follows; However, the capital surplus originating from the grants from the national government or local authorities, the reserves in accordance with item 1, Article 70 of the law, the carryover in accordance with item 4, Article 70 of the law, and the reserves in accordance with other related laws shall not be included in the share. 
1. The capital investment amount paid up by the members in accordance with Article 16
2. The capital investment of revolving investment made by a member in accordance with Article 18 of the law
3. The reserves determined to be included in the share in the general conventions of each fiscal year (including losses)

Article 19 (No assignment or acquisition of the shares) ① No member shall be allowed to assign his/her share without the approval by the cooperative.
② If a person who is not a member wishes to be assigned with shares, the process of membership admission shall be undertaken.
③ The assignee of the shares shall assume the rights and obligations with regard to the shares. 
④ A member shall not jointly own shares with other members. 
⑤ The cooperative shall not acquire shares of a member or receive them for the purpose of a pledge.

Article 20 (Informing duty) A member shall inform the cooperative of any of the following events within two weeks. 
1. A change of the representing officer, the name of the company, or the address of the business
2. Partial or entire suspension or termination of the business 
3. Loss of qualification to become a member 
4. Other issues the cooperative requires through conventions or rules as it deems necessary

Article 21 (Reporting duty) The cooperative may demand a member to report on the issues required for the operation of the cooperative. And, a member who is so requested shall comply with such. 


Chapter 3 Activities 
Article 22 (Activities) ① The cooperative is entitled to execute the following activities, or a part of them , in order to serve its purposes in Article 2 herein;
1. Joint businesses including manufacturing, processing, order awarding, sales, purchasing, storing, improving the transportation environment, trade marks, or services, as well as establishment, management, and operation of the joint facilities or complexes for such purposes 
2. Coordinating business activities between the parties, or demanding the authorities to perform arbitrative activities in the case where a non-SMB infringed the business domains of the cooperative.
3. Issues related to the industrial standardization, inspection, and test/research of the products manufactured by the members 
4. Providing loans for operation funds to the members (including discount of bills), brokerage of loans, or borrowing funds for the cooperative's own program
5. Projects for training, surveying/studying, education, and information provision on management, technology, and quality management of the businesses conducted by the members 
6. Entering into a group agreement for the economic gains of the members 
7. Importation and price survey of the raw materials and equipment needed by the members for exportation and manufacturing of the products carried by the members 
8. Projects commissioned by the national government, local government, federation, or association
9. Participation in competitive tenders for SMBs and other related projects in accordance with the ACT ON FACILITATION OF PURCHASE OF SMALL AND MEDIUM ENTERPRISE-MANUFACTURED PRODUCTS AND SUPPORT FOR DEVELOPMENT OF THEIR MARKETS
10. Application for adjustment of sub-contracted amounts between a customer and a contractor, who is a member, in accordance with the FAIR TRANSACTIONS IN SUBCONTRACTING ACT
11. Brokerage and moderation of outsourcing contracts between a customer and a contractor, who is a member, in accordance with the ACT ON THE PROMOTION OF COLLABORATIVE COOPERATION BETWEEN LARGE ENTERPRISES AND SMALL-MEDIUM ENTERPRISES
12. Application for business moderation in accordance with the ACT ON THE PROMOTION OF COLLABORATIVE COOPERATION BETWEEN LARGE ENTERPRISES AND SMALL-MEDIUM ENTERPRISES
13. Commissioned services for the benefit programs of the federation in accordance with the paragraph 22, item 1 of the Article 106 under the law. 
14. Management and leasing of the office building of the cooperative
15. Welfare-related works for the members
16. Installation and management of the overseas exhibition and sales venues for promotion of exportation 
17. Operation of free job-seeking programs for the unemployed 
18. Other activities for profit approved by the supervising authority to serve the purpose of the cooperative.
19. Ancillary programs related to the activities from item 1 through 18 above. 
② The cooperative may make capital investment under approval by the supervising authority when it is necessary to conduct the programs in item 1 above. 
③ The cooperative may allow a non-member to use its business under a resolution by the board of directors, if such an act does not hinder the members' use of the business. 

Article 22-2 (Establishment and operation of the cooperative vitalization fund) ① The cooperative may, in order to invigorate the functions of the cooperative and continue its programs, establish and operate the cooperative vitalization fund.
② Other issues related to the establishment and operation plans thereof shall be governed by the convention. 

Article 22-3 (Collective Standard and Quality Certification) 
①	In accordance with item 1, Article 27 under the INDUSTRIAL STANDARDIZATION ACT, the cooperative may establish collective standards for the products manufactured by the members. In this case, if there is a separate set of standards in accordance with other laws, the collective standards may be established based on such standards.
②	The necessary issues related to the inspection and collective standards in item 1 above shall be governed by the inspection rules, while the fees for the inspection shall be specified in the convention. 

Article 22-4 (Inspection of the Organizational Standard) ① The cooperative shall be entitled to inspect the products or processed items of its members based on the organizational standard in Article 22-3. In such a case, the cooperative charges the inspected member with a certain fee amount for the inspection. ② The issues related to the inspection and the organizational standard in item 1 above shall be specified in the inspection rules, and the issues related to the fee for the inspection shall be governed by a convention.

Article 22-5 (Indication of the quality certification) In the case where a member receives an inspection in accordance with Article 22-4 above, he/she may make indications on each product that it satisfies the collective standards in accordance with the inspection rules. 

Article 22-6 (Trademark, etc.)
①	The cooperative shall be entitled to register trademarks in accordance with Article 18-2 of ENFORCEMENT DECREE OF THE GOVERNMENT PROCUREMENT SERVICE ACT or the TRADEMARK ACT for the collective business in accordance with paragraph 1, item 1 of Article 22 herein. 
②	The cooperative shall, with regard to item 1 above, establish rules on the trade name, subject products, usage criteria for the members who use the trademark, rights and obligations for using the trademark, cooperation and arbitration of the disputes between the participating members, production of the products which use the trade mark (or sales of them), quality management, after-sale management, management organization, or other issues related to the proceeding of the joint trademark program and its operation, while the shared costs, distribution of the profits, and the charge for using the trademark shall be set forth in the convention.
③	The cooperative shall be entitled to request the members who use the trademark in item 1 above for the following. The members so requested shall comply with full cooperation.
1.	Requests for facilitating transferring and sharing of technology and quality know-how
2.	Requests related to joint manufacturing (sales), technical development and cooperation, quality management, marketing, and customer services 
3.	Requests for arbitration in the case of disputes between members
④	The cooperative shall, in any of the following cases, cancel or suspend the use of the trademark for the members who fall under  any one of the following categories;
1.	A member who lists his/her qualification as a member in accordance with Article 14 through 16. 
2.	A member who leased or assigned the rights for the trademark without a prior approval by the cooperative.
3.	The person who is in charge of the management or supervision of each trademark is not qualified to do so.
4.	A member who fails to comply with the requests in item 4 without justification.
⑤	The cooperative shall, in the case of canceling or suspending in accordance with paragraph 4 under item 4 herein, give the subject member the opportunity to state his/her opinions to  the board of directors.

Article 23 (Business Plan) 
①	The cooperative shall, within two months from the start of the fiscal year, prepare the business plan and the budget plan, which shall be reviewed by the board of directors and approved by the general convention. Any adjustment of such plans shall also be subject to such reviews and resolutions.
②	General costs, or project budgets which are immediately needed may be disbursed in accordance with the budget of the previous year before they are submitted for voting at the general convention.

Article 24 (Group Contract)
①	A group contract shall be executed in writing, specifying that the contract was entered into as a group contract approved by a resolution of the board of directors. However, in the case where there is an urgent need in accordance with a decision by the board of directors and it is not possible to convene a board meeting, the chair shall enter into a group contract and convene a board meeting without delay to get the approval retrospectively. 
②	A group contract shall be binding on direct members.
③	The members shall not enter into an agreement that is in violation of the group contract. 

Chapter 4 (General Convention and Board Meeting)

Article 25 (General conventions) A general convention 
The general conventions shall be classified into delegated general conventions and contingent general conventions. 

Article 25-2 (Delegated general convention) 
①	If the number of the members of the cooperative exceeds 200, a delegated general convention may be established in lieu of general conventions. 
②	The number of delegate members required to form a delegated general convention shall be more than one tenth of the total number of members at the time when the delegate members are to be elected. However, if such a number of the delegate members exceed 100, the number of the delegated members may be limited to 100. 
③	The delegate members shall be elected among the members during a general convention. 
④	In the case of electing delegate members, the cooperative shall, in order to ensure an appropriate distribution of the delegates, consider the distribution of the members in terms of the area, characteristics of the industry, and the year of joining the cooperative. 
⑤	In the case of electing delegate members, the voting or election rights can be exercised through a delegate if necessary. In this case, the provisions in Article 33-2 shall apply. 
⑥	The chair shall automatically become a delegate member.
⑦	For the delegated general convention, the provisions on the general conventions shall apply. However, a delegated general convention shall not vote on agenda in paragraph 2 and 3 of Article 31. 
⑧	The process of electing delegate members and their terms shall be governed by the rules on the directors in item 1, Article 41 and Article 45. 

Article 26 (Regular General Convention) The regular general convention shall be held within the month of February following the end of each fiscal year. 

Article 27 (Contingent General Convention)
①	A contingent general convention shall be called for by the chair in any of the following cases;
1.	If the chair or the board of directors decides it is necessary 
2.	If a quarter or more of the entire members of the cooperative consent and submit the purpose and cause of convening such a convention in writing 
②	In the case where it is requested to hold a contingent general convention in accordance with paragraph 2 under item 1 above, the chair shall take the steps to convene the convention within two weeks from the date when such a request was made. 
③	While a request to convene a general convention was made in accordance with paragraph 2 of item 1 above, if there is no person to convene the general convention or if the chair fails to take the steps to convene the convention, the auditor shall take the steps to convene within seven days. In this case, the auditor shall serve as the acting chair of the convention. 
④	If the auditor fails to convene the convention within the time frame set forth in item 3 above or if he/she is unable to do so, the representative among the members who requested the convention to be held shall convene the convention. In this case, such a representing member shall serve as the acting chair of the convention. 

Article 28 (Steps to convene a general convention) 
①	Holding of a general convention shall be announced through a seven-day notice to each member in writing which specifies the agenda, date, and venue of the meeting. 
②	In the absence of the chair of the board of directors or if he/she is not able to convene the meeting, the most senior in terms of age among the available directors shall convene the meeting. 

Article 29 (Agenda of general conventions)
①	The following issues shall be subject to a resolution of the general convention;
1.	Amendment of the articles of association 
2.	Introduction, amendment, or abolition of a convention 
3.	Establishment or amendment of budget plans or business plans for each fiscal year
4.	Approval of the closing of the books 
5.	Charging and collecting process of  the costs
6.	Dismissal of a member
7.	Dissolution, merger, or division of the cooperative
8.	Election and dismissal of an executive 
9.	Disposal of reserves and surpluses and processing of the losses 
10.	Acquisition and disposal of real estates
11.	Ceiling of the borrowings
12.	Other agenda as deemed necessary to be submitted to the general convention
②	Of each of the paragraphs under item 1 above, amendment in the paragraph 3, and the issues in paragraph 5, 10, and 12 may be delegated to the board of directors through a resolution of the general convention. 

Article 30 (Voting of the general convention)
①	The intent of the general convention shall be, unless otherwise specified in the laws, articles of association, or conventions, put to a quorum of half of the total membership and decided by the majority vote of the members present. 
②	The chair of the board of directors shall preside over the general conventions. And, if he/she is unable to serve as the chair, the person who is elected during the general convention shall serve as the acting chair. 
③	In a general convention, as a principle, only the agenda that were notified in accordance with Article 28 shall be discussed. However, except for the items in paragraph 1, 6, through 8 under item 1, Article 29, exceptions may be granted if the general convention decides that they are of an urgent nature. 
④	After considering the opinions of the members, the chair of the general convention may decide upon the method of voting in order to protect the anonymity or confidentiality of the agenda, if necessary. 

Article 31 (Special agenda)The following agenda shall be voted for with a quorum of half of the total membership and with at least two thirds of the total votes in favor. 
1.	Amendment of the articles of association 
2.	Dismissal of a member
3.	Dissolution, merger, or division of the cooperative 

Article 32 (Delay of the term of the general convention)
①	The term of a general convention can be extended through a resolution of the general convention. 
②	The procedure in Article 28 shall not apply to a general convention that is extended in accordance with item 1 above.

Article 33 (Voting Rights and Election Right)
①	Each member shall be endowed with one voting right and election right. However, the election right (including the right to be elected) shall be exercised only by the members who have maintained their membership status from 6 months before the expiry of the terms of the executives or delegates (in the case of an election to fill a vacancy, the date from which the cause for the election to fill the vacancy has existed) to the date of the election continuously. 
②	A member shall be present him/herself to exercise the voting or election right. However, in the case where it is not possible for the member to be present, it is possible to exercise the voting right in writing through hard copies or electronic documents, or through a delegate, for the agenda notified in advance in accordance with Article 28. And, the election right can be exercised through an agent. 
③	If an agent who is qualified in accordance with Article 33-2, a signed original or electronic documents that evidence the power of attorney should be submitted prior to the exercise of the voting or election right. In such a case, the person who exercises the voting or election right shall be regarded as a present person. 

Article 33-2 (Qualification for an agent)
①	A person who is qualified to become an agent shall be the employee or executive of the member company which wishes to exercise its rights through an agent. 
②	The agent shall submit a document that proves his/her power of attorney to the cooperative before he/she exercises the right. 

Article 34 (Conflict of interests) A member whose interest is in conflict with the interest of the cooperative for an agenda submitted to the general convention shall not be allowed to participate in the vote. 

Article 35 (Minute) Minutes of the meeting shall be prepared for the general convention to record the progress and resolutions of the meeting. The minutes shall be signed by at least two directors designated by the general convention. However, the minutes of meeting for the founding general convention shall be signed by the presiding officer and the entire founding members. 

Article 36 (Board of directors)
①	The board of directors shall make decisions on the operation of the cooperative. 
②	The board of directors shall be composed of a chair, directors, and an executive director. 
③	The chair shall convene and preside over a board meeting. 
④	The quorum of the board of directors’ meeting shall be half of the members of the board, and an agenda shall be passed only with favorable votes from the majority of the present members. 
⑤	Convention of the board of directors’ meeting shall be notified by no later than seven days before the scheduled date of meeting, and the notification shall include the agenda, date and time, and venue. Such notifications shall be made to each of the members of the board. However, if there is an urgent need and more than half of the members of the board contend, the process of convening may be omitted. 
⑥	If a director decides that a board meeting should be convened, he/she may demand the chair to convene a meeting with the consents from half or more of the members of the board. 
⑦	The chair shall convene a board meeting if requested in accordance with item 6 above. 

Article 37 (Agenda of a board meeting)
①	The board meeting shall vote on the following agenda 
1.	Issues regarding qualification of an aspiring member of the cooperative 
2.	Corporate bonds and repayment of the bonds
3.	Agenda to be submitted to the general convention 
4.	Agenda delegated by the general convention and conduct of business 
5.	Issues regarding recommendation of the candidate for the President of the federation 
6.	Admitting a non-SMB as a member of the cooperative 
7.	Establishment, amendment, or abolishment of rules
8.	Selection of the members of the Election Management Committee
②	Of the agenda submitted to the general convention, those delegated to the board shall be voted for within the extent of the delegation, without reversing the decisions of the general convention. 
③	The board meetings may delegate the chair to conduct minor issues among the agenda set forth in item 1 through a resolution by the board. 

Article 38 (Documentary voting) A director may, if he/she is not able to participate in the meeting, participate in the vote through writing, electronic documents, or a delegate for the agenda advised in advance. And, the person who may assume the status of agent shall be an employee or executive of the company, who is a director, who endows the power of attorney or a director of the cooperative. Multiple delegations shall not be allowed. 

Article 39 (Minute of a Board Meeting) Minutes of meeting shall be prepared for each board meeting and signed by the chair and two or more directors designated by the board. 


Chapter 5 Executives
Article 40 (Number of executives) 
①	The cooperative shall have one chair of the board of directors, at least five but not exceeding thirteen directors, one executive director, as many as two auditors. 
②	The post of chair, directors, and auditors shall be part-time services, while the executive director shall serve on a full-time basis. 

Article 41 (Appointment of an executive) 
①	The chair, directors, or auditors shall be elected among the members in accordance with the executive election rules in the general convention. However, a member who has joined in accordance with item 2 under Article 9 herein shall not become the chair of the board. Here, a member shall mean those who have maintained their status as a member from no later than 6 months before the expiry of the term of the chair of the board, directors, or auditors (in the case of an election to fill a vacancy, from the date when the condition to hold such an election has existed) to the date of election. 
②	The executive director shall be appointed by the chair among the candidates who are not members of the cooperatives but qualified in accordance with Article 13 of the Execution Decree of the law and recommended by the board. 
③	If there is a vacancy in the board, the vacancy should be filled by appointing a new director within two months from the time the vacancy existed. However, if the remaining term is less than 6 months, it is possible not to appoint the replacement for the vacancy with a resolution by the board. 
④	As the cooperative reports the appointment of an executive in accordance with paragraph 3, item 1 of Article 130 in the law, if the appointed executive is the chair of the board, the cooperative shall enclose documents that evidence that the individual does not fall under categories that would disqualify him/her as an executive in accordance with item 1, Article 51 of the law. 

Article 42 (Disqualification of an executive)
①	An individual may not be appointed as an executive of the cooperative if he/she;
1.	Does not meet the requirements in item 1, Article 51. 
2.	Has not paid the capital investment, membership fee, or otherwise payable costs for a significant amount of time since the due date. 
②	An executive who fails to meet the stipulations in paragraph 1, item 1 above shall automatically be dismissed. 
③	The actions of an executive who has been dismissed in accordance with item 2 above taken before his/her dismissal shall not be invalidated. 

Article 43 (Formation and operation of the election management committee) 
①	In order for the elections of the executives to be conducted in a fair manner, the cooperative may establish an election management committee (hereinafter referred to as the ‘committee’).
②	The committee shall be composed of seven members appointed by a resolution by the board and approval by the chair among the members (including delegate members). In such a case, a member who is registered as the candidate for the chair shall lose his/her original title. 
③	The committee shall oversee the following activities;
1.	Evaluation of the qualifications of the candidates
2.	Confirmation of the elector’s list. 
3.	Validation of the recommendations for candidates
4.	Preparation of the candidate description materials, determination of the campaign methods, and oversight
5.	Oversight for election management, voting, and counting of the ballot 
6.	Evaluation of any  objection to  the validity of the election 
7.	Arbitration over the disputes regarding the election 
8.	Evaluating and taking countermeasures on the potential violation of election rules 
9.	Confirmation of the elected
10.	Other necessary activities for the election 
④	Other issues related to the formation of the committee and its operation, etc., shall be determined by the executive election rules.

Article 44 (Limitations on campaign activities) 
①	Campaign activities shall mean the activities intended to help a certain individual to be elected or prevent such a person from being elected. However, simple statements of opinions on the election, indication of intents, and preparatory activities to register as a candidate and perform future campaign activities shall not be regarded as campaign activities. 
②	No one shall be allowed to conduct any of the following activities in order to have a certain individual elected or prevented from being elected; 
1.	Providing, offering, or pledging to provide money, goods, entertainment, financial benefits or titles in  public or private offices,
2.	Doing things in paragraph 1 above to a candidate or a person who wishes to become a candidate for the purpose of having a candidate withdraw from the election or preventing an individual from registering as a candidate.
③	No one shall be allowed to accept the benefits, titles, and etc., or an offer of such things set forth in paragraph 1 and 2 in item 2 above. 
④	The campaign activities are allowed only in accordance with the methods set forth in the articles of association and the executive election rules. No other methods shall be used for the campaign activities. 
⑤	The campaign period shall be from the moment of completion of the registration of the candidates to the day before the election. However, the period shall not be longer than 30 days. 
⑥	A person who wishes to become an executive (including a candidate) shall not visit the members (including delegate members) at their addresses or have them gathered at a certain place during the campaign period as well as other times for the sake of campaign activities. 
⑦	No person shall be allowed to conduct campaign activities through methods other than the campaign methods set forth by the committee between the placement of election posters, distribution of printed materials, holding joint speech sessions or joint debates, in addition to the printed candidate introduction material. 
⑧	No person shall be allowed to distribute false information or malign other candidates by publicizing facts regarding an executive election through a speech, posters, or other means. 
⑨	The committee may take necessary actions including removal or collecting such materials in the case where an election activity is in violation of item 2 through 8 above. 
⑩	Other necessary issues related to the elections shall be governed by the executive election rules. 

Article 45 (Term of an executive)
①	The term of an executive shall be four years in the case of a part-time office and three years for a full time office. However, the term of executives at the time of initial establishment of the cooperative shall be one year. 
②	The term of an executive who is elected to fill a vacancy shall be limited to the expiry of the term of the predecessor. The term of an executive who was elected during the term due to an increase in the number of the executives shall be limited to the expiry of the terms of other executives at the time when the new executive was elected. However, the term of the executive director shall be three years. 
③	If all of the executives resigned before the expiry of their terms, the term of the newly elected executives shall be in accordance with the provisions in item 1 above, but without exceeding the last day of the regular general convention of the year when the term is to expire. 

Article 46 (No concurrent offices)
①	An executive shall not be allowed to hold a concurrent office in the cooperative, unless otherwise authorized by the supervising authority. 
②	The Chair shall not hold any concurrent offices in other cooperatives. 
③	The executive director shall not hold any concurrent, full-time offices in other organizations. 

Article 47 (Responsibilities of the Chair)
①	The Chair shall represent the cooperative and oversee the overall operation of the cooperative. 
②	The Chair at the time of the establishment of the cooperative shall take over the responsibilities from the representative of the founders within two weeks from the date when the establishment of the cooperative is authorized. 

Article 48 (Responsibilities of the Executive Director)
①	The executive director shall assist the Chair, execute the operation of the cooperative, and serve as the acting chair (except for convening a general convention and presiding over  a general convention) in the case of the  absence of the chair or the chair’s inability to perform his/her responsibilities. 
②	In the case where neither the Chair nor the executive director can perform their services, an acting chair shall be elected among the directors in the board of director’s meeting. 

Article 49 (Vacancy of the executive director) In the case where the office of the executive director is vacant or he/she cannot perform his/her services due to an unavoidable reason, a general manger or a manager of the cooperative, or a person who is not a member of the cooperative, and designated by the Chair, shall assume the executive director’s authority. 

Article 50 (Services of an Auditor) 
①	An auditor shall perform audits on the properties of the cooperative and status of its operations and report the result to the general convention. 
②	The auditor shall, when he/she discovers any illegitimacy in the state of the properties or operation of the cooperative, shall report such to the general convention, the supervising authorities, the Association, or the Federation. 
③	In the case where the cooperative enters into a contract with the Chair or a director, the auditor shall represent the cooperative. The same shall apply in the case of a lawsuit between the cooperative and the Chair or a director. 

Article 51(Responsibilities of an Auditor) If an auditor neglects his/her duties, the provisions in Article 65, CIVIL ACT, shall apply. 

Article 52 (Request for Replacement of the Executives) 
①	The members of the cooperatives may demand partial or entire replacement of the executives upon consent from at least a quarter of the total membership in writing. 
②	In a general convention convened due to a request set forth in item 1 above, the relevant executives shall be dismissed with a quorum of half of the members present and with at least two thirds of the present members voting in favor of the dismissal. 
③	If there is a request in accordance with item 1 above, the Chair shall notify the relevant executive of the cause of replacement by no later than seven days before the date of the general convention and give the executive an opportunity to explain him/herself at the general convention. 

Article 53 (Duty of Good Faith for an Executive) An executive shall abide by the resolutions of the general conventions, as well as the relevant laws, articles of association, and the conventions and preform his/her duties for the cooperative with integrity. 

Article 54 (Remuneration for the Executives) 
①	An executive (including part-time offices) shall be compensated for the actual costs of performing the services for the cooperative, including travel costs, in accordance with the relevant rules within the limit of the actual costs incurred. 
②	A Chair may be paid an allowance for the activities related to the services rendered to the cooperative as set forth in the conventions or rules approved by a resolution of the general convention. 

Article 55 (Furnishing Articles of Association and Other Costs) 
①	The Chair shall furnish the articles of association, conventions, minutes of the general conventions and board meetings, and registry of the members in accordance with item 2, Article 63 of the law in the principal office. 
②	The members and creditors of the cooperative shall be allowed to access the documents in item 1 and may demand duplicates of them at any time. 
③	The Chair shall, when there is a request in accordance with item 2 above, not refuse such a request without justification. 

Article 56 (Furnishing of the documents related to a closing)
①	The Chair shall, by no later than seven days before the date of a general convention, prepare and submit a business report, a balance sheet, an income statement, the plans for disposal of surplus and processing of losses and furnish such documents at the principal office. 
②	The Chair shall attach the comments from the auditors to the documents in item 1 above and submit them to the general convention to obtain approval. 
③	The creditors of the cooperative may demand access to or duplicates of the documents in item 1 above at any time. 
④	The Chair shall not refuse such a request in item 3 without justification. 

Article 57 (Access to the accounting books, etc.)
①	The members may demand access to or duplicates of the accounting books and documents at any time with consent from at least one fifth of the entire members. 
②	The Chair shall not refuse a request as in item 1 above without justification. 

Article 58 (Pay grades and Employees) The pay grade system and the number of employees of the cooperative shall be governed by the pay grade rules. 

Article 59 (Wage) The wage to the employees shall be in accordance with the wage rules. 

Article 60 (Severance allowance) When an employee resigns, he/she shall be paid the severance allowances in accordance with the wage rules. 


Chapter 6 Accounting 
Article 61 (Fiscal year) The fiscal year of the cooperative shall be in accordance with the fiscal years of the government. 

Article 62 (Accounting) The issues regarding the accounting practices of the cooperative shall be governed by the budgetary and accounting conventions in accordance with the accounting bylaws set forth by the President of the Federation. 

Article 63 (Handling of the losses) If there are losses at the end of a fiscal year, the cooperative shall compensate for it in the order set forth in the convention. 

Article 64 (Objections) (1) If the creditor does not file an objection within the time frame set forth in Item 2, Article 63 herein, it shall be assumed that the creditor has approved a reduction by 1 share of his/her investment. 
(2) If the creditor files an objection, the cooperative shall repay the debt or provide a corresponding amount of collateral. 

Article 65 (Legal reserves) (1) The cooperative shall, until the amount reaches ½ of the total capital, deposit at least 1/10 of the surplus of each fiscal year as the legal reserve. However, in the case where a loss that is carried over, the deposit shall be made for the amount of the surplus of the year minus the amount used to complement the loss. 
(2) The legal reserve shall not be used for any other purpose than to complement losses. 

Article 66 (Deferral) The cooperative shall, in order to cover the costs of its businesses, defer at least 1/10 of the surplus of each fiscal year to the next fiscal year. 

Article 67 (Deposit of each gain) The amounts generated from each of the following items shall be deposited as the capital surplus. 
1.	Difference originating from a merger
2.	Difference originating from a reduction of capital 
3.	Difference originating from a split 
4.	Difference originating from the insurance covering the fixed assets 
5.	The amount used for the capital expenditure among the national government grants or the grants from local governments. 
6.	Increase in assets to preserve the capital 
7.	Gains from tax exemption to preserve the capital 

Article 68 (Disposition of the surplus) (1) The surplus of each fiscal year shall be offered as dividends to the members through a resolution of the general convention, placed in a revolving investment, or be carried over to the next fiscal year, if there is any remaining amount after compensating for losses and deducting the legal reserves and the required deferral.
(2) The dividends set forth in item 1 above shall be provided in accordance with the amount of investment by the member and the use of the programs offered by the cooperative. 

Article 69 (Processing of the loss) In the case where there is any loss at the end of the fiscal year, such a loss shall be compensated for in the order set forth in the convention.

Chapter 7 (Dissolution and Liquidation)

Article 70 (Dissolution)
①	The cooperative shall be dissolved in  any of the following circumstances ;
1.	A resolution by the general convention 
2.	Merger or division of the cooperative (other than the division set forth in item 3, Article 71).
3.	Bankruptcy of the cooperative
4.	An order of disbandment by the supervising authority 
5.	Other cause of dissolution 
②	In the case where the cooperative disbands in accordance with paragraph 1, 4, or 5 in item 1 above, such a disbandment shall be reported to the supervising authority within two weeks. 

Article 71 (Merger and division)
①	If the cooperative wishes to merge with another cooperative, a merger agreement shall be drafted and approved by the general convention. 
②	When the cooperative wishes to split, the scope of the responsibilities and rights to be assumed by the newly established cooperative shall be determined through a resolution by the general convention. 
③	If the cooperative is engaged in two or more fields of business as per the Execution Decree of the law, then, without prejudice to the provisions in Article 31, the cooperative may split only with the consent of at least half of the members in a certain business field. 
④	The merger and division of the cooperative shall be governed by the provision in Article 63 and 64. 
⑤	In the case where the cooperative intends to merge, the report on the cause of the merger, the business plan of the sustained or newly established cooperative, and the articles of association shall be submitted to the supervising authority for discussion. 

Article 72 (Liquidator) The Chair shall serve as the liquidator when the cooperative is to dissolve. However, the liquidator may otherwise be selected among the members through a resolution by the general convention. 

Article 73 (Responsibilities of a Liquidator) The liquidator shall promptly survey the status of the properties upon appointment, prepare a list of properties and a balance sheet, and have them approved by the general convention. 

Article 74 (Disposing of the Liquidated Properties) In the case of the dissolution of the cooperative, any surplus properties after clearing the debts of the cooperative shall be distributed among the members in accordance with the share ratio calculated in accordance with Article 18 (the sum in the share registry). 


Supplementary Provisions 
1.	This Articles of Association shall take effect from the date of approval by the supervising authority 
2.	Any amendment of these Articles of Association shall be approved by the general convention and then the supervising authority. 
3.	This revised Articles of Association shall take effect from the date when they are approved by the supervising authority (July 30, 1990) after they have been approved by the general convention. 
4.	The term of executives in item 1, Article 49 herein shall apply to the first executives who are elected after the law comes into effect. 
5.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority (April 2, 1992). 
6.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority (April 30, 1994). 
7.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority (April 30, 1996). 
8.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority (May 15, 2000). 
9.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority (June 9, 2003). 
10.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (May 30, 2007). 
11.	 (Interim Measures) The shares of the members calculated before the implementation of the law shall be in accordance with the previous regulations. 
12.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (March 4, 2009). 
13.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (May 3, 2010)
14.	(Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (November 4, 2011).
15.	 (Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (May 15, 2012). 
16.	 (Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (February 25, 2013). 
17.	 (Implementation Date) These Articles of Association shall take effect from the date of approval by the authority after the resolution by the general convention (April 10, 2014).