Permits can be broadly divided into those granted based on a person’s qualifications and those granted based on facilities and locations. In practice, these are called personal permits and property-based permits.
- Permits and registrations centered around facilities (such as public hygiene businesses like restaurants, lodging and bathhouses, etc.) have succession clauses in the law, so the assignee inherits the previous operator’s status.
- In cases where a person’s qualifications are key, even when transferring facilities, the qualifications do not automatically transfer. Article 3-2, Paragraph 3 of the Public Hygiene Management Act stipulates that in the case of rental and beauty businesses, only a person with a license can inherit the status.
- There are also industries that require prior permits before they can be transferred. Waste disposal businesses are a representative example.
Even for the same store, the results can vary depending on the assignee’s qualifications and the nature of the business, so it is safe to check the succession clauses in the relevant industry’s law before entering into a contract.
## Industry-Specific Reporting Deadlines and Required Documents
I have verified the original text of the laws and implementing regulations for four representative business types.
- Restaurant & Food Business (Food Hygiene Act Article 39, Implementing Regulations Article 48): Report within 1 month after succession. Attach the business registration certificate (permit), a copy of the documents proving transfer/acquisition, and a certificate of completion of food hygiene education (if received) to the report. For multiple-use facilities, add the document proving fire liability insurance coverage. The administrative agency must notify the acceptance/rejection within 3 days, and if no notification is received, it is deemed to have been accepted. The fee is 8,300 won for electronic civil petitions and 9,300 won for in-person/mail, according to the standard in the attached table of the implementing regulations.
- Accommodation, Bathhouses, Entertainment, Beauty Salons, etc. (Public Hygiene Management Act Article 3-2, Implementing Regulations Article 3-5): Report to the mayor, gunsu, or district office within 1 month, attaching a copy of the documents proving transfer/acquisition. If you submit a business closure report together, the district office will forward it to the tax office.
- Meat Processing Business, etc. (Livestock Sanitation Management Act Article 26, Implementing Regulations Article 40): Report within 30 days from the date of succession. Attach a copy of the transfer/acquisition contract, etc. The administrative agency will verify the confirmation of the seller's signature by electronic means (submission is optional if you do not consent). The fee is 10,000 won (9,000 won online).
- Waste Disposal Business (Waste Management Act Article 33, Implementing Regulations Article 47): If you acquire through auction or take over through other means, you must first obtain a permit before the rights and obligations are transferred. Attach to the permit application the results of paying the mutual aid fund contribution or joining a surety insurance for the disposal of abandoned waste, documents proving that the assignee meets the ability and standards for each business type, a plan for fulfilling the legal obligations that are being transferred, and documents proving the reason for succession. The administrative agency must notify the permit decision and the scope of the transferred responsibility within 30 days. Inheritance is subject to succession reporting within 30 days from the date the reason arose.
The same succession regulations also apply to cases where business facilities are entirely acquired through auction, rehabilitation/bankruptcy proceedings, and sale of seized assets.
## The previous business owner's administrative penalties also apply
Inheriting a business status isn't always a good thing.
- Article 78 of the Food Sanitation Act and Article 11-3 of the Public Hygiene Management Act stipulate that the effects of administrative sanctions such as suspension of business received by the previous business operator are passed on to the assignee for one year from the end of the penalty period. Ongoing penalty procedures can also be continued by the assignee.
- However, an exception is recognized if it can be proven that the assignee was unaware of the penalty or violation at the time of acquisition. Therefore, it is important to check the administrative penalty history before the contract and keep a record of the scope of the check.
- The waste management business is even stricter. When reviewing the permit, the legal responsibilities that the previous operator failed to fulfill, the execution plan, the disqualification reasons of the assignee, and the ability to continue the business are all reviewed together. Even after inheritance, the legal responsibility for the previous operator's violation of obligations does not disappear. If there is untreated abandoned waste, a disposal order may be issued to the person who inherited it (Article 40 of the Waste Management Act).
## Items to Check Before Signing the Contract
1. Verification of Permit, Registration, and Report Types for the Acquired Business Sector and Succession Clauses 2. Verification of Disqualifications of the Transferee and Eligibility Requirements such as License and Education 3. Verification of the History of Administrative Punishments and Ongoing Procedures of the Previous Business Operator 4. Verification of whether a plan to change the business name can be reported together with the status succession report 5. Creation of a schedule matching the final payment date and reporting deadline, and preparation of required documents
According to Article 10 of the Administrative Procedure Act, a person who has practically transferred the rights or interests related to a disposition can succeed to the status of a party by obtaining the approval of an administrative agency. Even in cases where there is no succession provision in the laws specific to each business sector, there is room for prior consultation with the administrative agency, so individual verification is necessary for each case.
## Administrative Agent Office Services
Hwang Yun-sang Administrative Agent Office handles due diligence to determine the feasibility of license and permit succession before acquisition, provides guidance on checking the history of administrative actions, prepares the status succession report and attachments, and acts as an agent for submission to the relevant administrative agency. For industries requiring prior permits, such as waste disposal businesses, we also handle the preparation and submission of the succession permit application. Costs will be provided after consultation, following confirmation of the industry and scope of documents.