The Threshold of Establishment: The Start of Public Interest Activities
Article 32 of the Civil Act stipulates that non-profit corporations aiming for public interest purposes may be established with the authorization of the competent administrative authority. While non-profit corporations are vital for solving social issues, the current establishment approval process has long served as a significant hurdle for those attempting to formalize their public interest work.
The Reality of the Non-Profit Corporation Establishment System: Complex and Fragmented
In 2018, the Center on Philanthropy at The Beautiful Foundation conducted a census of non-profit corporations in Korea. A critical discovery was that non-profit corporations were disparately registered across approximately 43 central ministries and 17 local governments. This fragmented structure creates a heavy administrative burden and causes significant confusion due to inconsistent procedures and standards across agencies.
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The Korean Non-Profit Corporation Establishment Model: The Authorization System
The legal framework for establishing non-profit corporations is generally categorized into three models:
(1) authorization system,
(2) approval system, and
(3) normative (or registration-based) system.
These models reflect the degree of state discretion and trust in civil society.
For over 60 years, South Korea has maintained a “Authorization System“ for non-profit corporations, which reflects a historical perception of state control over organization formation (Ko, 2010). However, while the non-profit sector and its actors have evolved through voluntary action and capacity building, the administrative inefficiencies and confusion inherent in the authorization system have emerged as significant burdens during the establishment process.
Administrative Discrepancies and Case Studies:
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Inconsistent Criteria: One non-profit corporation bypassed its local jurisdiction to register in Seoul, which offered more flexible standards regarding “initial endowment” and office space requirements.
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Delayed Processes: An non-profit corporation addressing LGBTQ+ issues faced a four-year legal battle after being denied permission by the Ministry of Justice. Another cultural festival non-profit corporation took two years to obtain permission, which was granted only under the condition that it “does not go against the sentiments of citizens.”
Expanding Solidarity and Discussion Toward Legal Reform
Despite the evolving social ecosystem, the non-profit corporation establishment system has remained largely unchanged for 60 years. Recently, the Dongcheon Foundation, Bae, Kim & Lee LLC, and the Korea Association of Non-profit Organizations (KANPO) challenged the constitutionality of Article 32 of the Civil Act. In late 2025, the Constitutional Court of Korea commenced deliberations (2025 Hun-Ka 20).
To support this movement, the Center on Philanthropy at The Beautiful Foundation is conducting research to analyze administrative inefficiencies and identify the current status of non-profit corporation establishment across the government. On April 1st, 2026, an “Emergency Forum on the NPO Authorization System on Trial for Unconstitutionality“ will be held to discuss securing autonomy for non-profit activities.
References:
KO, S. H. (2010). A Study on the Approval and Normative Systems in the Establishment of Nonprofit Corporations under Civil Law. Seoul National University Law, 51(2), 103-129.