Companies Act

Directors at incorporation who are elected pursuant to the provisions of Article 90, paragraph (1) may be dismissed by a resolution at a general meeting of class shareholders constituted by the class shareholders at incorporation of relevant class of shares issued at incorporation relating to relevant election at any time prior to the formation of the stock company.

Notwithstanding the provisions of the preceding paragraph, if there are provisions in articles of incorporation to the effect that a director who is elected pursuant to the provisions of Article 41, paragraph (1), or at an organizational meeting of class shareholders or at a general meeting of class shareholders may be dismissed by a resolution at the shareholders meeting, a director at incorporation who is elected pursuant to the provisions of Article 90, paragraph (1) may be dismissed by a resolution at an organizational meeting at any time prior to the formation of the stock company.

When applying provisions of the preceding paragraph if the stock company to be incorporated is a company with audit and supervisory committee, the term "a director" in the same paragraph is deemed to be replaced with "a director who is an audit and supervisory committee member or other directors", and the term "a director at incorporation" is deemed to be replaced with "a director at incorporation who is an audit and supervisory committee member at incorporation or other directors at incorporation" respectively.

The provisions of paragraphs (1) and (2) apply mutatis mutandis to a company auditor at incorporation who is elected pursuant to the provisions of Article 90, paragraph (1) applied mutatis mutandis under paragraph (2) of that Article.

The directors at incorporation (referring to the directors at incorporation and company auditors at incorporation if the stock company to be incorporated is a company with company auditor; hereinafter the same applies in this Article) must investigate the following matters without delay after their election:

that, with respect to the property contributed in kind in the cases set forth in Article 33, paragraph (10), item (i) or item (ii) (if set forth in that item, limited to the securities under that item), the value specified or recorded in the articles of incorporation is reasonable;

that the verification provided for in Article 33, paragraph (10), item (iii) is appropriate;

that the performance of contributions by the incorporators and the payments pursuant to the provisions of Article 63, paragraph (1) have been fulfilled; and

that, beyond the matters set forth in the preceding three items, the procedures for the incorporation of the stock company do not violate laws and regulations or the articles of incorporation.

The directors at incorporation must report the outcome of the investigations pursuant to the provisions of the preceding paragraph to an organizational meeting.

If incorporators are asked by the shareholders at incorporation to provide explanations on the matters regarding the investigation pursuant to the provisions of the paragraph (1) at an organizational meeting, the incorporators must provide necessary explanations with respect to relevant matters.

If some or all of the directors at incorporation (or the directors at incorporation and company auditors at incorporation if the stock company to be incorporated is a company with company auditor) are incorporators, a person to investigate the matters set forth in each item of paragraph (1) of the preceding Article may be elected by a resolution at the organizational meeting.

A person who is elected pursuant to the provisions of the preceding paragraph must conduct the necessary investigation and report the outcome of relevant investigation to an organizational meeting.

If the solicitation under Article 57, paragraph (1) is carried out, the incorporators may not effect any amendment in the articles of incorporation on and after either the date referred to in Article 58, paragraph (1), item (iii) or the first day of the period referred to in the same item, whichever comes earlier, notwithstanding the provisions of Article 33, paragraph (9) and Article 37, paragraphs (1) and (2).

Notwithstanding the provisions of Article 30, paragraph (2), articles of incorporation may be amended by a resolution at an organizational meeting.

If it is resolved at the organizational meeting to effect an amendment in the articles of incorporation to change the matters set forth in each item of Article 28, the shareholders at incorporation who dissented from that amendment at relevant organizational meeting may rescind the manifestation of their intention relating to the subscription for relevant shares issued at incorporation only within two weeks after relevant resolution.

If, if the solicitation under Article 57, paragraph (1) is carried out, the total number of authorized shares is not provided for in the articles of incorporation, the provisions on the total number of authorized shares must be created by amending the articles of incorporation prior to the formation of the stock company by a resolution at an organizational meeting.

If the stock company to be incorporated is a company with classes shares, and the cases set forth in any of the following items apply, the consent of all class shareholders at incorporation of relevant classes of the shares issued at incorporation in each of relevant items must be obtained:

if it is intended to create, as a feature of a certain class of shares, any provisions in the articles of incorporation with respect to the matters set forth in Article 108, paragraph (1), item (vi), or to effect any amendment in the articles of incorporation with respect to relevant matters (excluding any amendment which repeals the provisions of the articles of incorporation with respect to relevant matters);

if it is intended to create any provisions in the articles of incorporation pursuant to the provisions of Article 322, paragraph (2) with respect to a certain class of shares.

If the stock company to be incorporated is a company with class shares, if it is intended to create, as a feature of a certain class of shares, any provisions in the articles of incorporation with respect to the matters set forth in Article 108, paragraph (1), item (iv) or item (vii) by amending the articles of incorporation, relevant amendment in the articles of incorporation does not become effective unless a resolution is passed at an organizational meeting of class shareholders constituted by the following class shareholders at incorporation (if there are two or more classes of shares issued at incorporation relating to relevant class shareholders at incorporation, referring to the respective organizational meetings of class shareholders constituted by class shareholders at incorporation categorized by the class of relevant two or more classes of shares issued at incorporation; hereinafter the same applies in this Article); provided, however, that this does not apply to cases where there is no class shareholder at incorporation who may exercise votes at relevant organizational meeting of class shareholders:

the class shareholders at incorporation of relevant class of shares issued at incorporation;

the class shareholders at incorporation of shares with put options for which there are provisions that the relevant other shares referred to in Article 108, paragraph (2), item (v), (b) are to be relevant class of share; or

the class shareholders at incorporation of shares subject to call option for which there are provisions that the relevant other shares referred to in Article 108, paragraph (2), item (vi), (b) are to be relevant class of shares.

The class shareholders at incorporation who, at the organizational meeting of class shareholders referred to in the preceding paragraph, dissented from relevant amendment in the articles of incorporation may rescind the manifestation of their intention relating to the subscription for relevant shares issued at incorporation only within two weeks after the resolution passed at relevant organizational meeting of class shareholders.

If the stock company to be incorporated is a company with class shares, and effecting any amendment in articles of incorporation with respect to any of the following matters is likely to cause detriment to the class shareholders at incorporation of any class of shares issued at incorporation, relevant amendment in the articles of incorporation does not become effective unless a resolution is passed at an organizational meeting of class shareholders constituted by the class shareholders at incorporation of the shares issued at incorporation of relevant class (if there are two or more classes of shares issued at incorporation relating to relevant class shareholders at incorporation, referring to the respective class organizational meetings of class shareholders constituted by the class shareholders at incorporation categorized by the class of relevant two or more classes of shares issued at incorporation); provided, however, that this does not apply to cases where there is no class shareholder at incorporation who may exercise votes at relevant organizational meeting of class shareholders:

creation of a new class of shares;

changes in the features of shares;

increase of the total number of authorized shares, or the total number of authorized shares in a class (meaning the total number of shares in one class that the stock company is authorized to issue; the same applies hereinafter).

If any amendment in the articles of incorporation with respect to the share unit is to be effected and there are provisions in the articles of incorporation pursuant to the provisions of Article 322, paragraph (2) with respect to relevant amendment in the articles of incorporation, the provisions of the preceding paragraph do not apply to the organizational meeting of class shareholders constituted by the class shareholders at incorporation of relevant class of the shares issued at incorporation.

A subscriber for the shares solicited at incorporation may submit the requests set forth in each item of Article 31, paragraph (2) at any time during the hours designated by the incorporators; provided, however, that the fees designated by the incorporators are required to be paid in order to submit the requests set forth in item (ii) or item (iv) of that paragraph.

As at formation of a stock company, the subscriber for the shares solicited at incorporation becomes a shareholder of the shares issued at incorporation for which the relevant subscriber has made payment pursuant to the provisions of Article 63, paragraph (1).

If a subscriber for the shares solicited at incorporation falsified the payment pursuant to the provisions of Article 63, paragraph (1), the subscriber may exercise the right of shareholders at incorporation and shareholders for shares issued at incorporation for which the payment is falsified, only after the payment pursuant to the provisions of paragraph (1) of the following Article or Article 103, paragraph (2) is made.

A person who accepts transfer of shares issued at incorporation as referred to in the preceding paragraph or the right to become their shareholder may exercise the right of shareholders at incorporation and shareholders for relevant shares issued at incorporation; provided, however, that this does not apply to cases where the person has acted in bad faith or with gross negligence.

The provisions of the proviso to Article 93, paragraph (1) and the provisions of Article 94, paragraph (1) of the Civil Code do not apply to the manifestation of intention relating to an offer of subscription for and allotment of the shares solicited at incorporation, and relating to contracts under Article 61.

The subscriber for the shares solicited at incorporation may not rescind the subscription for shares issued at incorporation on the grounds of mistake, fraud or duress after the formation of a stock company, or after exercising the subscriber's votes at an organizational meeting or organizational meeting of class shareholders.

In the case prescribed in paragraph (3) of the preceding Article, a subscriber for the shares solicited at incorporation is liable to pay the entire amount of payment for which the payment was falsified, to the stock company.

The obligation assumed by a subscriber for the shares solicited at incorporation pursuant to the provisions of the preceding paragraph may not be exempted without the consent of all shareholders.

If the solicitation under Article 57, paragraph (1) is carried out, for the purpose of the application of the provisions of Article 52, paragraph (2), the phrase "in the following cases" in that paragraph is deemed to be replaced with "in the cases of item (i)".

In the case prescribed in Article 102, paragraph (3), a person prescribed by Ministry of Justice Order as an incorporator or director at incorporation involved in falsifying payment is jointly and severally liable with subscribers referred to in paragraph (1) of the preceding Article to make payment prescribed in that paragraph; provided, however, that this does not apply to cases where the person (excluding those persons who falsified the payment) proves that the person did not fail to exercise due care with respect to the performance of the person's duties.

The obligations assumed by an incorporator or director at incorporation pursuant to the provisions of the preceding paragraph may not be exempted without the consent of all shareholders.

If the solicitation under Article 57, paragraph (1) is carried out, any person (excluding the incorporators) who consents to specifying or recording the person's name and a statement to the effect that the person supports the incorporation of the stock company in a document or an electronic or magnetic record regarding relevant solicitation, including an advertisement for relevant solicitation, is deemed to be an incorporator and the provisions of the preceding Section and the preceding three paragraphs apply.