In principle, all employees may join or leave the association according to his/her wish; however, a former member may be restricted from re-joining the association for a certain period of time of up to 2 years determined by the articles of association.

However, this does not apply to (1) persons appointed as executives by the General Meeting of Shareholders, (2) shareholders of the relevant company (excluding minority shareholders) and (3) day-to-day workers.

The legal nature of an ESOA is an unincorporated association, and may conduct juristic acts in the name of the association. It is subject to the provisions on incorporated associations of the Civil Code of Korea in addition to the Framework Act on Labor Welfare.

To establish an ESOA, 2 or more employees must agree to the establishment and an establishment committee (composed of 2 or more people, including one representative) must be created.

Articles of association are the basic self-governing rules related to the establishment, operation and activities of ESOAs and apply to the members and organs of ESOAs unless the articles go against existing laws. All you need to do is download the Articles of Association Standard Format from our online bulletin board and complete the form.

Hold an introduction seminar explaining the purpose, usefulness and operation of an ESOA for all workers and accept applications from workers that want to join the association.

Matters to be discussed

1. 1) The support that the employer company will provide and the conditions under which such support will be given
2. 2) Matters concerning the establishment and operation of an ESOP Operating Committee
3. 3) Other matters that need to be addressed for the establishment and management of an ESOA

According to the Framework Act on Labor Welfare, which states that ESOAs "must be operated in a democratic way," the articles of association are established through the approval of the majority of employees that are qualified to become an ESOA member, and a representative, a director, and an auditor are appointed through direct and secret voting.

The establishment committee must sign an ESOP management consignment contract with KSFC within 3 weeks after the establishment meeting is held. If the committee does not sign a contract, an ESOA cannot be established.

Within 3 weeks after signing an ESOP management consignment contract, the establishment committee must report the establishment of the ESOA to the regional employment and labor office using the prescribed form. The establishment is complete when the committee transfers the duty of taking care of ESOP-related affairs to the representative of the ESOA.

Upon the establishment of an ESOA, the ESOA will be subject to and must abide by the matters negotiated and agreed between the establishment committee and the employer company and the ESOP management consignment contract.