Shareholders of Japanese Companies

The rights and obligations of shareholders in Japan are mainly set out in the Corporate Governance Code released by the Council of Experts Concerning the Corporate Governance Code, issued in 2015, as well as the Companies Act. This code has a principle-based approach to realize efficient corporate governance in the specific situations of every company. 

 

In this article, our company formation agents in Japan explain a few important aspects related to shareholders of Japanese companies.

 

 

Cumulative voting for naming directors is possible in Japan, except for the situations in which the articles of association mention otherwise.

 

According to the Companies Act, minority shareholders have certain rights against the business and directors, such as:

 

• To request the inspection of the books, records and shareholder registers of the business;

• To request the convocation of the meeting of the general shareholders and to file an agenda for this meeting;

• To require that the business starts a lawsuit against the directors;

• To start a shareholders’ lawsuit;

• To require the suspension of the directors’ unlawful behavior;

• Other rights: our company registration advisors in Japan can offer more details on what these other rights consist of.

 

 

Because the responsibility of the shareholders in a company is limited to the invested capital amount, the general shareholders of a company in Japan do not have any responsibilities in connection with the corporate governance.

 

As about institutional investors, the Principles for Responsible Institutional Investors, released by the Council of Experts Concerning the Japanese Version of the Stewardship Code set out by the FSA (the Financial Services Agency) provides the principle of being followed for a wide range of institutional investors to accordingly discharge their stewardship responsibilities, in order to promote sustainable development for the companies they invested in. Our Japan company formation representatives can offer more details on these responsibilities, as well as assistance in setting up a company in Japan.

 

If you need to know more about the corporate governance in Japan, or for help to open a company in this country, please speak to our Japan company formation agents.