Companies Act

If a stock company has prescribed the matters set forth in Article 199, paragraph (1), item (iii), the stock company must file a petition to the court, without delay after the determination of the subscription requirements, for the appointment of an inspector in order to have the inspector investigate the value of the property provided for in that item (hereinafter in this Section referred to as "property contributed in kind").

If the petition referred to in the preceding paragraph has been filed, the court must appoint an inspector, except if it dismisses the petition as unlawful.

If the court has appointed the inspector under the preceding paragraph, it may fix the amount of the remuneration that the stock company pays to relevant inspector.

The inspector referred to in paragraph (2) must conduct the necessary investigation and submit a report to the court by providing it with a document detailing the results of the investigation or with an electronic or magnetic record (limited to one as prescribed by Ministry of Justice Order) in which these have been recorded.

If the court finds it necessary to clarify the contents of the report under the preceding paragraph or to confirm the grounds supporting that report, it may request that the inspector referred to in the paragraph (2) submit a further report referred to in the preceding paragraph.

If the inspector referred to in the paragraph (2) has submitted the report referred to in paragraph (4), the inspector must deliver a copy of the document referred to in that paragraph to the stock company or use a means prescribed by Ministry of Justice Order to provide it with the information recorded in the electronic or magnetic record referred to in that paragraph.

If the court receives a report referred to in the paragraph (4), if it finds the value provided for in Article 199, paragraph (1), item (iii) with respect to property contributed in kind (excluding a value not subjected to investigation by the inspector referred to in the paragraph (2)) to be improper, it must issue a ruling changing that value.

If the value of property contributed in kind has been changed, in whole or in part, because of a ruling under the preceding paragraph, the subscriber for shares for subscription (limited to a person who tenders property contributed in kind; hereinafter the same applies in this Article) may rescind the manifestation of intention relating to applications for subscription for shares for subscription or relating to the contract provided for in Article 205, paragraph (1), limited to within one week from the finalization of that ruling.

The provisions of the preceding paragraphs do not apply in the cases in each of the following items with respect to the matters prescribed respectively in those items:

if the total number of the shares to be allotted to the subscribers for the shares for subscription does not exceed one tenth of the total number of issued shares:the value of the property contributed in kind tendered by the subscribers for relevant shares for subscription;

if the total sum of the value provided for under Article 199, paragraph (1), item (iii) with respect to the property contributed in kind does not exceed 5,000,000 yen:the value of relevant property contributed in kind;

if the value of the securities with market price provided for under Article 199, paragraph (1), item (iii) with respect to property contributed in kind does not exceed the value calculated by the method prescribed by Ministry of Justice Order as the market price of the securities:the value of the property contributed in kind with respect to the securities;

if the verification of an attorney, a legal professional corporation, a lawyer and registered foreign lawyer joint corporation, a certified public accountant, an audit corporation, a certified public tax accountant or a tax accountancy corporation (or if the property contributed in kind consist of real estate, relevant verification and an appraisal by a real estate appraiser; hereinafter the same applies in this item) is obtained with respect to the reasonableness of the value provided for under Article 199, paragraph (1), item (iii) with respect to property contributed in kind:the value of the property contributed in kind for which verification has been obtained;

if the property contributed in kind consist of a money claim (limited to claims that have already fallen due) to the stock company, and the value provided for under Article 199, paragraph (1), item (iii) with respect to the money claim does not exceed the book value of the debt representing relevant monetary claim:the value of the property contributed in kind with respect to relevant monetary claim.

None of the following persons can provide the verification provided in item (iv) of the preceding paragraph:

a director, an accounting advisor, a company auditor or executive officer, or an employee including a manager;

a subscriber for shares for subscription;

a person who is subject to a suspension of operations for whom the period of that suspension has not elapsed yet; or

a legal profession corporation, a lawyer and registered foreign lawyer joint corporation, an audit corporation or a tax accountancy corporation with respect to which more than half of its members are persons who fall under either item (i) or item (ii) above.

Subscribers for shares for subscription (excluding persons who tender property contributed in kind) must, on the date or within the period provided for in Article 199, paragraph (1), item (iv), pay in the entire amount to be paid in for the shares for subscription for which the subscribers respectively subscribed, at the bank, etc. designated by the stock company as the place for the handling of payments.

Subscribers for shares for subscription (limited to persons who tender property contributed in kind) must, on the date or within the period provided for in Article 199, paragraph (1), item (iv), deliver the property contributed in kind equivalent in value to the entire amount to be paid in of the shares for subscription for which the subscribers respectively subscribed.

Subscribers for shares for subscription may not set off their obligations to effect payment under the provisions of paragraph (1) or delivery under the provisions of the preceding paragraph (hereinafter in this subsection referred to as "performance of contribution") against claims they have against the stock company.

Transferring of the right to become a shareholder of shares for subscription by effecting the performance of contribution cannot be asserted against the stock company.

A subscriber for shares for subscription will lose a right to become the shareholder of shares for subscription by effecting the performance of contribution if the subscriber fails to effect the performance of contribution.

In the cases set forth in the following items, a subscriber for shares for subscription becomes the shareholder of the shares for subscription for which the subscriber effects the performance of contribution on the day prescribed in each of these items:

if a date under Article 199, paragraph (1), item (iv) is prescribed:relevant date; and

if a period under Article 199, paragraph (1), item (iv) is prescribed:the day on which the performance of contribution is effected.

In the cases set forth in the items of Article 213-2, paragraph (1), a subscriber of shares for subscription may not exercise the rights of shareholders with respect to shares for subscription for which the performance of contribution is falsified, only after the payment prescribed in those items or the payment pursuant to the provisions of Article 213-3, paragraph (1) is made.

A person who accepts transfer of shares for subscription as referred to in the preceding paragraph may exercise the right of shareholders with respect to the shares for subscription; provided, however, that this does not apply when the person has acted in bad faith or with gross negligence.

Notwithstanding the provisions of paragraph (1), if there are provisions with respect to the matters set forth in each item of Article 202-2, paragraph (1) pursuant to the provisions of the second sentence of that paragraph, a subscriber for shares for subscription becomes the shareholder of the shares for subscription that the subscriber subscribed to on the day of allotment.