Companies Act

A liquidating stock company must prepare a balance sheet and administration report for each liquidation year (referring to each one year period starting on the day immediately following the day when the liquidating stock company has fallen under any of the cases set forth in each item of Article 475 or the corresponding day of that day of the subsequent years (or, if relevant corresponding day does not exist, the immediately preceding day)) as well as annexed detailed statements to accompany them, as prescribed by Ministry of Justice Order.

The balance sheet, administration reports, and annexed detailed statements accompanying them which are referred to in the preceding paragraph may be prepared as electronic or magnetic records.

A liquidating stock company must retain its balance sheet under paragraph (1) and the annexed detailed statements accompanying it from the time of the preparation of relevant balance sheet until the registration of the completion of the liquidation at the location of its head office.

Companies with company auditors (including liquidating stock companies which have the provisions of the articles of incorporation to the effect that the scope of the audit is limited to accounting audit) must have the balance sheet, administration reports, and annexed detailed statements accompanying them which are referred to in paragraph (1) of the preceding Article audited by company auditors pursuant to the provisions of Ministry of Justice Order.

Companies with board of liquidators must have the balance sheet, administration report, and annexed detailed statements accompanying them which are referred to in paragraph (1) of the preceding Article (or, if the provisions of the preceding paragraph apply, those which have been audited as provided for in the preceding paragraph) approved by the board of liquidators.

liquidating stock companies must keep the balance sheet and administration report regarding each liquidating administrative year provided for in Article 494, paragraph (1), as well as annexed detailed statements accompanying them (including, if the provisions of paragraph (1) of the preceding Article apply, audit reports, hereinafter in this Article referred to as "balance sheet") at its head office from the day preceding the day of the annual shareholders meeting (or, in the cases provided for in Article 319, paragraph (1), from the day when the proposal under that paragraph is submitted) until the registration of the completion of the liquidation at the location of its head office.

Shareholders and creditors may make the following request at any time during the business hours of the liquidating stock company; provided, however, that the expense prescribed by relevant liquidating stock company must be paid in order to make the request set forth in item (ii) or item (iv):

if the balance sheet is prepared in writing, request to inspect relevant documents;

a request for the issuance of a transcript or extract of the documents referred to in the preceding item;

if the balance sheet has been prepared as an electronic or magnetic record, a request to inspect anything that is used in a manner prescribed by Ministry of Justice Order to display the information recorded in that electronic or magnetic record; or

a request to be provided with the information recorded in the electronic or magnetic record referred to in the preceding item by an electronic or magnetic means that the liquidating stock company has designated, or a request to be issued a document showing that information.

If it is necessary for the purpose of exercising the rights of a member of the parent company of a liquidating stock company, the relevant member of the parent company may, with the permission of the court, make the requests relevant in each item of the preceding paragraph with respect to the balance sheet of relevant liquidating stock company; provided, however, that the expenses prescribed by relevant liquidating stock company must be paid in order to make the requests set forth in item (ii) or item (iv) of that paragraph.

At liquidating stock company set forth in the following items, liquidators must submit or provide the balance sheet and administration reports provided for in each relevant item to the annual shareholders meeting:

companies with company auditors (excluding companies with board of liquidators) provided for in Article 495, paragraph (1):the balance sheets and administration reports that have been audited under that paragraph;

companies with board of liquidators:the balance sheets and administration reports that have been approved pursuant to Article 495, paragraph (2); and

liquidating stock companies other than those set forth in the preceding two items:the balance sheets and administration reports under Article 494, paragraph (1).

Balance sheets that have been submitted or provided pursuant to the provisions of the preceding paragraph must be approved by the annual shareholders meeting.

Directors must report the contents of the administration reports submitted or provided pursuant to the provisions of paragraph (1) to the annual shareholders meeting.

The court may, in response to a petition or ex officio, order the parties to a lawsuit to submit balance sheets under Article 194, paragraph (1) and the annexed detailed statements accompanying them, in whole or in part.

A liquidating stock company must, without delay after having fallen under each item of Article 475, give public notice in Official Gazette to the creditors of relevant liquidating stock companies to the effect that creditors should state their claims during a certain period of time and must give the notices separately to each known creditor, if any; provided, however, that relevant period cannot be less than two months.

The public notice pursuant to the provisions of the preceding paragraph must contain a notation to the effect that relevant creditors are excluded from the liquidation unless they state their claims during the period of time.

A liquidating stock company cannot perform its obligations during the period of time under paragraph (1) of the preceding Article. In these cases, a liquidating stock company cannot be exempted from the liability arising from its failure to perform.

Notwithstanding the provisions of the preceding paragraph, even during the period of time under paragraph (1) of the preceding Article, a liquidating stock company may, with the permission of the court, perform its obligations relating to claims of minor claims, claims secured by security interests over the assets of the liquidating stock company, or other claims unlikely to be detrimental to other creditors even if performed. In these cases, if there are two or more liquidators, the petition for relevant permission must be made with the consent of all of the liquidators.

A liquidating stock company may perform its obligations relating to conditional claims, claims of indeterminate duration or other claims of indeterminable amount. In these cases, a petition for the appointment of an appraiser must be filed to the court in order to have these claims evaluated.

In the cases provided for in the preceding paragraph, a liquidating stock company must perform its obligations relating to the claims under that paragraph in accordance with the evaluations by the appraiser under that paragraph.

Any expense for the procedures for the appointment of the appraiser under paragraph (1) is borne by the liquidating stock company. The same applies to the expense for the summonses and questions for the purpose of the appraiser's appraisal.

A liquidating stock company cannot distribute its property to its shareholders until after performance of the obligations of relevant liquidating stock company; provided, however, that this does not apply if assets regarded as necessary for the performance of obligations relating to a claim that is the subject of dispute as to its existence or otherwise or as to its amount have been withheld.

Creditors of a liquidating stock company (excluding known creditors) who fail to state their claims during the period under Article 499, paragraph (1) are excluded from the liquidation.

Creditors who are excluded from the liquidation pursuant to the provisions of the preceding paragraph may demand the performance with respect to the residual assets that are not distributed.

If residual assets of a liquidating stock company have been distributed to some shareholders, the assets necessary for the distribution to shareholders other than relevant shareholders in the same proportion as that applied for the distribution received by relevant shareholders are deducted from the residual assets under the preceding paragraph.

If a liquidating stock company intends to distribute its residual assets, it must prescribe the following matters by decision of liquidators (or, for a company with board of liquidators, by a resolution of the board of liquidators):

kind of residual assets; and

matters regarding the allotment of residual assets to shareholders.

In the cases provided for in the preceding paragraph, if two or more classes of shares with different features as to the distribution of residual assets are issued, the liquidating stock company may prescribe the following matters as the matters set forth in item (ii) of that paragraph in accordance with the features of relevant classes of shares:

if there is any arrangement that no residual assets will be allotted to the shareholders of a certain class of shares, a statement to that effect and relevant class of shares;

beyond the matter set forth in the preceding item, if there is an arrangement that each class of shares is to be treated differently with respect to allotment of residual assets, a statement to that effect and the details of relevant different treatment.

The provisions regarding the matters set forth in paragraph (1), item (ii) must stipulate that the residual assets will be allotted in proportion to the number of the shares (or, if there are provisions with respect to the matters set forth in item (ii) of the preceding paragraph, the number of the shares of each class) held by the shareholders (excluding the relevant liquidating stock company and shareholders of the class of shares referred to in item (i) of the preceding paragraph).

If residual assets consist of property other than monies, shareholders have the right to demand distribution of monies (meaning the rights to demand that the liquidating stock company deliver monies in lieu of relevant residual assets; hereinafter the same applies in this Article). In these cases, the liquidating stock company must prescribe the following matters by a resolution of liquidators (or, for a company with board of liquidators, by a resolution of board of liquidators):

the period during which rights to demand distribution of monies can be exercised; and

if there is any arrangement that no residual assets are to be allotted to shareholders who hold less than certain number of shares, a statement to that effect and that number.

In the cases provided for in the preceding paragraph, the liquidating stock company must notify the shareholders of the matters set forth in item (i) of that paragraph no later than 20 days prior to the last day of the period referred to that item.

A liquidating stock company must pay to shareholders who exercised rights to demand distribution of monies, in lieu of the residual assets allotted to relevant shareholders, monies equivalent to the value of relevant residual assets. In these cases, the amount provided for in each of the following items for the case categories set forth in each the item is the value of relevant residual assets:

if relevant residual assets consist of property with a market price:the amount calculated in a manner prescribed by Ministry of Justice Order as the market price of relevant residual assets;

in cases other than those set forth in the preceding item:the amount determined by the court in response to the petition by the liquidating stock company.