The Rise of One-Person Agencies: What CL’s Case Reveals About K-Pop’s Legal Challenges

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Prosecutors issued a deferred-prosecution order for singer CL and the head of actor Kang Dong-won’s agency after investigating allegations that they operated an entertainment agency without proper registration.

On March 25, prosecutors said the Seoul Western District Prosecutors’ Office issued the deferred-prosecution order on March 23 for CL and A, the head of Kang Dong-won’s agency, who had been investigated under the Act on the Development of the Popular Culture and Arts Industry. A deferred-prosecution order means prosecutors acknowledge the allegations but, after weighing the circumstances of the offense and subsequent developments, decide not to move forward with an indictment.

Prosecutors say CL established the one-person agency Very Cherry in 2020 and allegedly operated it without registering with the Ministry of Culture, Sports and Tourism for about five years. Authorities raised similar questions about Kang Dong-won’s agency, but investigators determined the actor was not directly involved in running the company; the police cleared him during the investigation and only the agency head, A, was referred to prosecutors.

Officials said the decision reflected the subjects’ lack of awareness of the relevant law and the remedial steps they took afterward. The agencies operated without a full understanding of the requirements and, once they realized the violation, proceeded with the registration process.

A prosecutor explained that investigators considered several factors: the suspects promptly met registration requirements and completed procedures immediately after confirming the violation, they had no prior similar convictions, and their contributions to industry development. The prosecutor added that the choice favored firmly establishing the legal framework and encouraging self-correction rather than imposing simple punishment.

Under Article 26 of the current Act on the Development of the Popular Culture and Arts Industry, anyone seeking to operate an entertainment planning business in Korea must register with the relevant city or provincial governor and meet statutory requirements such as a minimum period of practical experience or completion of prescribed training. Violating this rule and continuing to operate unregistered can trigger severe criminal penalties under Article 40: up to two years in prison or a fine of up to 20 million KRW (15,000 USD).

The system went into full effect in July 2014 to eliminate unfair practices in the entertainment industry and protect artists’ rights. Its goals include preventing the unchecked proliferation of agencies and fostering transparent management to support the healthy development of the popular culture and arts sector.

In recent years, a growing number of artists leaving major agencies to launch solo ventures has led to calls that one-person agencies often fall into a legal blind spot, since their operators sometimes overlook administrative requirements.

Last year it emerged that many one-person agencies set up by high-profile entertainers had been operating without registration, which caused significant industry concern. To minimize disruption and guide firms toward compliance, the Ministry of Culture, Sports and Tourism designated a unified registration and voluntary-reporting guidance period through the end of last year and conducted active administrative outreach.

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