1. Case Overview

a. Party Represented by Barun Law

B (who is a defendant and appellant), who entered into a partnership agreement with C (who is a plaintiff, and appellee) and substantially established and controlled A (who is a defendant and appellant) to carry on business in connection therewith.

b. Background of the Case

After entering into the partnership agreement, B and C jointly proceeded with a development project in the name of A, involving construction and sale of apartments. Disputes arose between them during this process. Consequently, C claimed against A and B, seeking refund of its shares in A's property on the grounds of stock transfer registration or withdrawal from partnership.

c. Lawsuit

C sued A to change the registration of ownership for some shares, and sued B to confirm shareholder rights on the same basis. However, the trial court dismissed all of C's claims.

In response, C appealed and preliminarily claimed against B, arguing for withdrawal from the partnership agreement and demanding a settlement claim against A's property based on share percentages. The trial court accepted this preliminary claim, recognizing C’s profit distribution ratio at approximately 60% and ordered B to pay approximately 3.2 billion won in settlement.


2. Judgment (Disposition)

The Supreme Court held that under the premise that C did not hold shareholding rights in A, the partnership property under the partnership agreement between B and C could not include shares or net assets of A, and therefore, C could not seek a refund of its share from A's net assets.


3. Basis of Judgment (Disposition)

A party to a partnership agreement that does not become a shareholder, even if the funds are invested in a joint stock company, cannot be considered to have established and operated the joint stock company. Thus, the shares of the joint stock company or property belonging to it cannot be the property of the partnership agreement.


4. Our Argument and Role

We reversed the trial court's decision, pointing out that the trial court was justified in holding that B beneficially owned A's shares, and that it was an apparent contradiction for the trial court to hold that the partnership property based on the partnership between B and C was the collective property of A, as if the partnership consisting of B and C owned A’s shares or property in a joint manner, while at the same time holding that one partner beneficially owned all of A's shares.


5. Significance of the Judgment

The judgment is significant as it clarifies that existing legal principles apply only when all parties involved in a partnership agreement are shareholders in a joint stock company established and operated jointly through capital investment. This case establishes a precedent by clarifying that a joint stock company cannot be included in a partnership agreement between individuals if some of the parties do not hold shareholding rights in the joint stock company.


□ Attorneys in charge: Noh Man-kyeong, Kim Dae-hee