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CORPORATE DIRECTOR CAN BE ELECTED COMPANY CHAIR-PERSON
The Company Act provides that if the govern-ment or a corporate entity is a shareholder in a company, it may be elected a director; however, it must designate a natural person as its repre-sentative to perform its duties of office. Thus the Company Act does not require the responsible officers of a company to be exclusively natural persons; a corporate entity may also be a re-sponsible officer of a company, but it must des-ignate a natural person as its representative in office.
As the identity of a company's directors is among the matters to be recorded in the company's reg-istration, it follows that a corporate director must be registered as such. But the identity of its designated representative is not among the mat-ters to be recorded, and therefore the representa-tive need not be so registered. However, ac-cording to a ruling issued by the Ministry of Economic Affairs on 7 June 2005, a natural person designated to perform a corporate direc-tor's duties of office must nonetheless be free of any of the grounds for disqualification from of-fice defined in the Company Act.
On the other hand, if a representative designated by a corporate shareholder is elected a director in his personal capacity, then the company's regis-tration should record the representative himself as a director. According to an MOEA ruling dated 10 May 2005, if such corporate share-holder is liquidated and wound up, the conditions for its election as a director cease to exist, and therefore its designated representative who has been elected a director should be automatically removed from office.
According to MOEA rulings dated 7 June 2005 and 5 May 2005, under the procedures defined by the Company Act for electing a company chairperson, a corporate director may be elected chairperson and act as the company's external representative. For example, if Corporation A is elected a director of Company B, it may be elected Company B's chairperson by Company B's board of directors; and, as provided by the Company Act, Corporation A may at any time designate a new representative to perform its duties of office.
Conversely, if the representative appointed by Corporation A is elected a director of Company B in his personal capacity, and is also elected chairperson of Company B, although Corpora-tion A may at any time designate a new repre-sentative to take over its directorship within the remainder of the term of office, according to an MOEA interpretation dated 20 May 2005 the new representative cannot automatically succeed to the position of chairperson. Instead, the dep-uty chairperson, or an acting chairperson elected by the directors or managing directors from among themselves, should convene a board meeting to elect a new chairperson in accordance with the provisions of the Company Act.