What it is
Paid-in capital is what shareholders put in; total equity is that plus retained profits and losses. When losses drag total equity below paid-in capital, Korean rules call it capital erosion. Negative equity is full erosion.
How it is measured
Erosion rate = (paid-in capital − total equity) ÷ paid-in capital. Both figures appear on the balance sheet in the periodic report.
Why it matters
An erosion rate of 50% or more can put a company under administrative issue designation, and full erosion is a delisting ground. Thresholds differ by market and have changed over time.
Where to check it
Compare paid-in capital and total equity on the balance sheet. Companies also disclose when a designation ground arises, and often file a rights issue or a capital reduction to fix it.
This explanation is general information, not investment advice. Rules reflect September 2026 and may change; check official exchange and broker notices.