Companies Act

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

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

The expenses of the procedures for the appointment of the appraiser under paragraph (1) are borne by the liquidating membership company. The same applies to the expense of summonses and questions for the purpose of appraiser's evaluation.

If the current assets of a liquidating membership company are not sufficient to fully discharge its debts, if there are members who have not performed all or part of their contributions, relevant liquidating membership company may have the members make their contributions, notwithstanding the provisions of the articles of incorporation relating to those contributions.

A liquidating membership company cannot distribute its assets to its members until after performance of the obligations of relevant liquidating membership 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 (excluding known creditors) of a liquidating membership company; (limited to limited liability companies; hereinafter the same applies in this Article) who fail to state their claims during the period under Article 660, 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 solely with respect to the residual assets that are not distributed.

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

If there are no provisions in the articles of incorporation with respect to the proportions of the distribution of residual assets, the proportions are prescribed in accordance with the value of each member's contribution.

If the administration of a liquidation has ended, the liquidating membership company must carry out the accounting relating to the liquidation and obtain the approval of the members without delay.

If members do not raise objections to the accounting under the preceding paragraph within one month, the members are deemed to have approved the accounting; provided, however, that this does not apply if there is any misconduct regarding the execution of the liquidators' duties.

A membership company (limited to a general partnership company and a limited partnership company; hereinafter the same applies in this Section) may prescribe, by the articles of incorporation or by the consent of all members, the method of the disposition of the assets of relevant membership company if relevant membership company is dissolved on the grounds set forth in Article 641, items (i) through (iii).

The provisions of Section 2 through the immediately preceding Section do not apply to membership companies that have prescribed the method of the disposition of assets under the preceding paragraph.

If a membership company that determines the method of the disposition of assets under paragraph (1) of the preceding Article is dissolved on the grounds set forth in Article 641, items (i) through (iii), the liquidating membership company (limited to a general partnership company and a limited partnership company; hereinafter the same applies in this Section) must prepare, pursuant to the provisions of Ministry of Justice Order, the inventory of property and the balance sheet as of the day of the dissolution within two weeks after the day of the dissolution.

If a membership company that has not prescribed the method of the disposition of assets under paragraph (1) of the preceding Article is dissolved on the grounds set forth in Article 641, items (i) through (iii), if it prescribes the method of the disposition of assets in that paragraph after the dissolution, the liquidating membership company must prepare, pursuant to the provisions of Ministry of Justice Order, an inventory of property and the balance sheet as of the day of the dissolution within two weeks of the day of the prescribing of the method of the disposition of assets.

If a membership company has prescribed the method of the disposition of assets under Article 668, paragraph (1), creditors of the liquidating membership company after the dissolution thereof may state their objections to the method of the disposition of assets to relevant liquidating membership company.

In cases provided for in the preceding paragraph, the liquidating membership company must, within two weeks from the day of the dissolution (or, in the cases provided for in paragraph (2) of the preceding Article, of the day when relevant method of disposition of the assets is prescribed), give public notice of the matters set forth below in Official Gazette and must give notice of the same separately to each known creditor, if any; provided, however, that the period under item (ii) cannot be less than one month:

a statement that liquidation will be effected in accordance with the method of the disposition of assets under Article 668, paragraph (1); and

a statement to the effect that creditors may state their objections within a certain period of time.

Notwithstanding the provisions of the preceding paragraph, if in addition to using Official Gazette, a liquidating membership company effects public notice under that paragraph in a manner set forth in Article 939, paragraph (1), item (ii) or (iii) in accordance with the provisions of the articles of incorporation under the provisions of that paragraph, the liquidating membership company is longer be required to give separate notices under the provisions of the preceding paragraph.

If the creditors do not raise objections within the period under paragraph (2), item (ii), relevant creditors are deemed to have approved relevant disposition of assets.

If the creditors raise objections within the period under paragraph (2), item (ii), the liquidating membership company must make payment to or provide appropriate security to relevant creditors, or entrust appropriate assets to a qualified trust company for the purpose of assuring the payment to relevant creditors.

If a membership company prescribes the method of the disposition of assets under Article 668, paragraph (1), if there are creditors that have attached the equity interest of members, consent of those creditors must be obtained if the liquidating membership company after the dissolution intends to dispose of its assets.

If the liquidating membership company under the preceding paragraph disposes of its assets in violation of the provisions of that paragraph, creditors that attached the equity interests of members may demand that relevant liquidating membership company pay an amount equivalent to those equity interests.

A liquidator (or, if the method of the disposition of assets in Article 668, paragraph (1) is prescribed, a member that represents the liquidating membership company) must retain the books of the liquidating membership company as well as any material data regarding the business and liquidation of the same (hereinafter in this Article referred to as "accounting materials") for a period of ten years from the time of the registration of completion of the liquidation at the location of head office of the liquidating membership company.

Notwithstanding the provisions of the preceding paragraph, if a person who retains the accounting materials has been prescribed by the articles of incorporation or by a majority of the members, that person must retain the accounting materials for a period of ten years from the time of registration of the completion of the liquidation at the location of head office of the liquidating membership company.

The court may, in response to a petition by interested parties, appoint a person to act on behalf of the liquidator in paragraph (1) or the person who retains the accounting materials under the provisions of the preceding paragraph in the retaining the accounting materials. In these cases, the provisions of the preceding two paragraphs do not apply.

The person appointed pursuant to the provisions of the preceding paragraph must retain the accounting materials for a period of ten years from the time of the registration of the completion of the liquidation at the location of head office of the liquidating membership company.

The expenses regarding the procedures for the appointment under the provisions of paragraph (3) are borne by the liquidating membership company.

The liability of the member in Article 580 is extinguished in relation to the creditors of the liquidating membership company who do not state their claims, or do not give advance notice of their claims within five years from the day of the registration of the dissolution at the location of head office of the liquidating membership company, when five years have elapsed from the day of the registration.

Creditors of the liquidating membership company may demand that the liquidating membership company make the payment, even after the lapse of the period under the preceding paragraph, if there are residual assets not distributed to members.

The provisions set forth below do not apply to liquidating membership company:

Chapter IV, Section 1;

Article 606, Article 607, paragraph (1) (excluding items (iii) and (iv)) and Article 609;

Chapter V, Section 3 (excluding Article 617, paragraph (4), Article 618 and Article 619) through Section 6 and Section 7, Subsection 2; and

Article 638, paragraph (1), item (iii) and paragraph (2), item (ii) of the same Article.

If a member in a liquidating membership company dies or disappears as a result of the merger, the heirs or other general successors of the member may succeed to the equity interest of relevant member even in the absence of the provisions of the articles of incorporation under Article 608, paragraph (1). In these cases, the provisions of paragraphs (4) and (5) of that Article apply mutatis mutandis.