Establishment of an organization
Establishment of farming and fisheries corporations
Integrated establishment of Type 3 specialized agriculture and fisheries corporation
1. What is a Farming and Fisheries Corporation?
An agricultural and fisheries corporation refers to a corporation dedicated to agriculture and fisheries established for the purpose of systematizing the management of agriculture and fisheries and promoting the 6th industrialization (production, processing, distribution, and experience).
Based on the Agricultural and Fisheries Management Entities Act, they are classified into farming cooperative corporations (cooperative form) and agricultural and fisheries company corporations (company form).
Unlike general corporations and cooperatives, the requirements for the contribution ratio by farmers are strict, and special benefits such as tax exemptions, policy funds, and farmland acquisition are provided.
2. Practical Overview and Requirements (Including Legal Basis)
1. Legal basis
- Article 16 of the Act on the Promotion and Support of Agricultural and Fisheries Management Entities (Agricultural Cooperative Corporations)
- Article 19 of the Act on the Promotion and Support of Agricultural and Fisheries Business Entities (Agricultural Corporations and Fisheries Corporations)
- Enforcement Decree and Enforcement Rules of the Agricultural and Fisheries Management Entity Act
2. Requirements for Agricultural Cooperative Corporations
- Five or more farmers are members
- One member, one vote principle
- Jointly engaging in agricultural production, processing, and distribution
- Payment of capital contribution and preparation of articles of incorporation and business plan
3. Requirements for Agricultural and Fisheries Corporations
- At least one-third of those with executive authority are farmers (fishermen)
- Contribution limit for non-farmers (non-fishermen): Less than 901 TP3 T of the total contribution amount
- Under the Commercial Act, it is possible to take the form of a joint-stock company, limited liability company, general partnership, or limited partnership.
- Confirmation of Agricultural Business Entity (Fisheries Business Entity) Registration
4. Processing Time and Required Documents
- Consultation to Registration of Incorporation: Approximately 3–4 weeks
- Including business registration and agricultural business entity registration: Average 4–5 weeks
- Required Documents: Application for Registration of Incorporation, Articles of Incorporation, Minutes of the Inaugural General Meeting (Promoters' Meeting)
- Certificate of Farmer, Certificate of Investment, and Certificate of Balance
- Letter of Acceptance of Appointment for Executives, Business Plan
3. Type
Farming cooperative corporation
A cooperative corporation established jointly by five or more farmers — one member, one vote; income distribution based on a combination of capital contribution ratio and business utilization performance
Agricultural Corporation (Inc.)
Established as a corporation, it is the most common type — advantageous for attracting external investment and scaling up.
Agricultural Corporation (Limited Liability Company)
Limited liability company form with a limit on the number of contributors — suitable for closed and family-centered management
Fisheries Corporation
Dedicated to the fisheries sector, including fisheries and aquaculture — Structure similar to agricultural corporations, capable of linking with fishing village associations and fisheries cooperatives
Agricultural and fisheries corporation
Establishment Procedures
Preliminary consultation and type determination
Verification of farmer/fisherman qualifications, design of investment structure, and determination of the suitable type between cooperative and corporate models
Verification of Agricultural Business Registration
Verification of agricultural business entity registration and support for registration to prove eligibility of farmers and fishermen
Drafting of Articles of Association and Inaugural General Meeting
Drafting of Articles of Association (reflecting farmer equity requirements), holding of a founding general meeting or promoters' meeting
Court establishment registration
Application for registration of incorporation at the competent registry office, establishment of the corporation
Linking business registration and policy support
Support for business registration with the tax office, agricultural business entity registration, and policy fund application
Key Benefits
Agricultural and fisheries corporations provide exceptional tax and financial benefits not available to general corporations, and,
It serves as the foundation for the expansion of the 6th industry.
Corporate tax reduction
Full corporate tax exemption on income from food crop cultivation and up to 5 billion won per year on income from other crop cultivation and livestock.
Special provisions for the acquisition of farmland
Relaxation of restrictions on farmland ownership under the Farmland Act (direct ownership of farmland possible, unlike general corporations)
Policy fund preferential treatment
Access to special funds such as Agricultural Credit Guarantee Fund guarantees, agricultural and livestock management funds, and support for successor farmers
Acquisition tax and property tax reduction
Local tax exemptions for real estate and facilities used for agriculture and fisheries (vary by local government)
Why an Administrative Agent Is Needed for the Establishment of an Agricultural and Fisheries Corporation
If you proceed without the help of an expert, you may encounter the following difficulties:.
1. Strictness of farmer qualification requirements
If you establish a corporation without being registered as an agricultural business entity, there is a risk of license revocation later, so you must prepare supporting documentation before establishment.
2. Designing the Investment Ratio
To maintain eligibility for tax benefits and farmland acquisition after establishment, requirements such as having at least one-third of the executives being farmers and less than 901 TP3 T of non-farmers must be accurately reflected.
3. Linkage of policy funds and subsidies
We design plans to link various policy financing options, such as the Agricultural Credit Guarantee Fund, successor farmer funds, and startup funds, which will be available after establishment, during the establishment phase.
4. Roadmap for Transition to the 6th Industry
If you plan to expand from a simple manufacturing corporation to include processing, distribution, and tourism, you must design your articles of incorporation and business plan accordingly in advance.
Unlike general companies, agricultural and fisheries corporations,
A single small equity design during the establishment phase determines tax benefits worth billions of won.
It is also the key to opening the door to policy funds.
Seum goes beyond simple registration agency services,
We will ensure that you receive all benefits available to farmers and fishermen during the planning stage.
Seum Administrative Attorney Firm
Written by: Sangyoon Kim, Administrative Scrivener
