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Article 369-1
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The term "affiliated enterprises" as used in this Act shall refer to enterprises which are independent in existence but are interrelated in either of the following relations:
- Companies having controlling and subordinate relation between them; or
- Companies having made investment in each other.
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Article 369-2
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A company which holds a majority of the total number of the outstanding voting shares or the total amount of the capital stock of another company is considered the controlling company, while the said another company is considered the subordinate company.
In addition to the relation set forth in the preceding Paragraph, if a company has a direct or indirect control over the management of the personnel, financial or business operation of another company, it is also considered the controlling company, and the said another company is considered the subordinate company.
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Article 369-3
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Under any of the following circumstances, it shall be concluded as the existence of the controlling and subordinate relation:
- Where a majority of executive shareholders or directors in a company are contemporarily acting as executive shareholders or directors in another company; or
- Where a majority of the total number of outstanding voting shares or the total amount of the capital stock of a company and another company are held by the same shareholders.
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Article 369-9
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Where a company and another company have made investment in each other's company to the extent that one third or more of the total number of the voting shares or the total amount of the capital stock of both companies are held or contributed by each other, these two companies are defined as mutual investment companies.
Where both mutual companies are holding one half or more of the total number of the voting shares or of the total amount of the equity capital of each other's company, or having direct or indirect control over the management of the personnel, financial of business operations of each other's company, they shall have the status of the controlling company as well as the subordinate company to each other's company.
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Article 369-11
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In calculating the number of shares or the amount of equity capital of another company being held by a company under this Chapter, the following shares or equity capital shall also be included into the calculation:
- The shares or equity capital of another company being held by the subordinate company of companies of the investing company;
- The shares or equity capital (of such another company) being held by a third party for the investing company; and
- The shares or equity capital (of such another company) being held by a third party for any subordinate company of the investing company.
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