The Ministry of SMEs and Startups announced that amendments to eight laws under its jurisdiction, including the Act on the Promotion of Cooperative Relations between Large and Small Enterprises and the Special Act on the Designation of Suitable Business Types for Small Enterprises, were passed at the National Assembly plenary session on the 27th.
The amendment to the Act on the Protection and Support of Small Enterprises (Small Enterprise Act) is significant as it provides grounds for public utility fee support and long-term partitioning repayment of policy funds, considering the difficult management conditions of small enterprises.
In particular, for small enterprises that face management difficulties after receiving policy funds, the law specifies grounds for long-term partitioning repayment support, in addition to extending the repayment period and deferral.
It also newly established grounds for supporting consulting connections for management improvement for small enterprises that have received extended repayment periods. It noted that even if they go out of business after receiving policy funds or exceed the criteria for small enterprises, they can continue partitioning repayment as small enterprises.
The amendment to the Special Act on the Promotion of Traditional Markets and Commercial Areas (Traditional Market Act) established a professional institution designation and support basis to systematically cultivate young merchants.
The amendment to the Act on the Promotion of Cooperative Relations between Large and Small Enterprises (Cooperative Relations Act) limited the obligation to enter into non-disclosure agreements (NDAs) and the imposition of fines to outsourcing companies, clarifying that the deadline for entering into NDAs is until the day they receive technical documentation from the contracting company. This improves the system so that contracting companies are not unreasonably punished for failing to enter into NDAs without intent or negligence.
The amendment to the Special Act on the Designation of Suitable Business Types for Small Enterprises (Suitable Business Types Act) changes the application start date for designating suitable business types or types suitable for survival from one year prior to the expiration to one year and six months prior, ensuring sufficient deliberation time.
The Suitable Business Types Act was enacted in 2018 to ensure the survival rights of micro small enterprises. Large corporations and others are generally prohibited from transferring, commencing, or expanding businesses in sectors designated as suitable for survival for five years. Additionally, if urgent protection for small enterprises is needed while the application is being processed, it has established grounds for the Minister to temporarily recommend restrictions on the business.
The eight legislative amendments that passed the National Assembly plenary session that day are expected to be promulgated following a Cabinet meeting decision and to take effect six months after the promulgation date.