Before you sign a Korean distributor agreement

A supplier who fails you costs you one order. A distributor who fails you costs you the market — they hold your inventory, your customer relationships and, if you granted exclusivity, your right to try again with someone else. The checks before a distribution agreement deserve to be an order of magnitude more careful than the checks before a purchase order, and most of them can be run from public records before the first meeting.

Verify the entity that will sign

Distribution deals are negotiated with people and signed with entities. Confirm the entity: the registered company name, its registration number, its corporate form, and that the person negotiating actually represents it. A surprising share of Korean distribution approaches come from a newly formed vehicle, not the established company whose name was in the email — sometimes for clean tax reasons, sometimes not. The register settles which in minutes.

Size the claims against the filings

• “We have thirty sales staff nationwide” — the pension filings say how many people are actually on the payroll, this month.
• “We distribute for major brands” — a real distributor of scale files accounts. Revenue that cannot support the claimed portfolio is an answer in itself.
• “Established 2009” — the register carries the establishment date, every rename and every address move since. A company renamed last year may simply have rebranded — or may be a familiar operation under a fresh flag.
• “We are licensed to import your product” — regulated goods (cosmetics, food, medical devices) need the importer to hold the relevant licence, and for cosmetics the certification landscape is checkable.

Write the record into the agreement

The point of verifying before signing is that the agreement can then depend on what you verified. Three clauses that follow directly:

• Identity clause — the agreement names the registered Korean name and registration number, and obliges the distributor to notify you of any change of name, representative or control. Renames are legal and common; discovering one a year late is a choice you do not have to make.
• Exclusivity earned, not granted — tie exclusivity to performance minimums, because the register can tell you a company is real; only sales figures tell you it is effective.
• Termination triggers from public records — suspension or closure of the registration, or entry into rehabilitation proceedings, ends the agreement without argument. These are checkable facts, not judgement calls, which is what you want in a termination clause.