Here are recent updates on the Japanese Companies Act (Company Law).

Video conference is now an option to hold a shareholders meeting.

For the long time, the Legal Affairs Bureau (registration office) in Japan had been refusing to accept the minutes of shareholders meeting using video conference as an evidence for registration.

But now, a stock company (KK) has three options to hold a shareholders meeting.

1. Traditional way. A shareholders meeting is held at one venue, and shareholders who cannot attend the meeting vote by proxy in advance.

2. Video conference. A shareholders meeting is held at two or more venues, and shareholders can participate in the meeting using video coference system. In this case, the company should use the system that ensures bidirectionality and immediacy of communication all through the meeting.

3. Omission of resolution. When directors or shareholders submit a proposal and all the shareholders agree to the proposal, it shall be deemed that the resolution to approve the proposal at the shareholders meeting has been made. In this case, the company should make the document recording those matters in place of minutes. This document can be used as the evidence of the resolution when a stock company submits an application for registration.

Yugen Kaisha (YK) can be easily converted to Kabushiki Kaisha (KK)(since May 1, 2006)

There was a significant amendment to the Commercial Code of Japan in May 2006. Yugen Kaisha Law was abolished, and the provisions of the Commercial Code dealing with corporations (Kabushiki Kaisha, Gomei Kaisha, Goshi Kaisha) was reorganized into the New Companies Act.

Under the New Companies Act, Yugen Kaisha can be converted to Kabushiki Kaisha more easily than the past conversion process from YK to KK.

Obligation to establish a branch for foreign companies doing business in Japan was abolished (since April 1, 2003).

Formerly, a foreign company doing business in Japan is required to have a branch in Japan. By the amendment to the Commercial Code, obligation to have a branch was abolished. Please note the registration of representative in Japan is still necessary.