Is a Korean company in bankruptcy or rehabilitation?
Updated
Korea has two distinct insolvency tracks, and the difference decides whether your supplier is restructuring around you or disappearing. Confusingly, a company can be deep into either one while its tax status still reads as an ordinary active business.
Two words that are not interchangeable
| Term | What it is | What it means for a counterparty |
|---|---|---|
| 회생 | Court-supervised rehabilitation — the company keeps operating under a plan | Orders may continue, but on the court's terms, not yours |
| 파산 | Bankruptcy — liquidation of the company | You are now a creditor in a queue, not a customer |
Why the status check will not tell you
The National Tax Service status behind our status check reports whether a business is registered as trading, suspended or closed — a tax fact. A company under 회생 is, by design, still trading; it will show as active because it is active. So the check that catches a vanished company will not catch a restructuring one, and anyone who tells you a single lookup covers insolvency is selling simplicity that does not exist.
Where the real signals live
- Court announcements. Korean insolvency proceedings are published through the court system’s public notices. They are in Korean and searched by the exact registered company name — one more reason to keep the Korean name from every document you receive.
- The corporate registry extract. Rehabilitation events appear on the company’s registry record — the same extract described in our registry guide. If a counterparty will not provide a recent extract on request, treat that as an answer.
- Listed companies. For anything on the stock market, rehabilitation filings are disclosed on DART the day they happen — the one genuinely easy case.
- Behavioural signals. Sudden requests for full prepayment, a change of paying entity, key staff departures mid-order — the patterns in what to do when a supplier closes mid-contract usually announce themselves before any court notice does.
Status check first, registry extract second — and if the word 회생 appears anywhere, get everything about your order in writing from the administrator.
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