Companies Act

If an incorporator, director at incorporation or company auditor at incorporation neglects their duties with respect to the incorporation of a stock company, they are liable to relevant stock company for damages arising as a result thereof.

If an incorporator, director at incorporation or company auditor at incorporation has acted in bad faith or with gross negligence in performing their duties, relevant incorporator, director at incorporation or auditor at incorporation is liable to a third party for damages arising as a result thereof.

If an incorporator, a director at incorporation or a company auditor at incorporation is liable for damages arising in the stock company or a third party, if other incorporators, directors at incorporation or company auditors at incorporation are also liable, relevant persons will be joint and several obligors.

An exemption from the obligations assumed by an incorporator or director at incorporation pursuant to the provisions of Article 52, paragraph (1), obligations assumed by an incorporator pursuant to the provisions of Article 52-2, paragraph (1), obligations assumed by an incorporator or director at incorporation pursuant to the provisions of paragraph (2) of that Article, and the liability assumed by an incorporator, director at incorporation or company auditor at incorporation pursuant to the provisions of Article 53, paragraph (1) may not be given without the consent of all shareholders.

If the formation of a stock company fails, the incorporator is jointly and severally liable for any act committed in connection with the incorporation of the stock company, and bears the costs expended in connection with the incorporation of the stock company.

Pursuant to the provisions of this Subsection, the incorporators may provide to the effect that persons will be solicited to subscribe for the shares issued at incorporation.

Incorporators intending to provide to the effect that the solicitation under the preceding paragraph be carried out must obtain the consent of all incorporators.

Whenever the incorporator intends to carry out the solicitation under paragraph (1) of the preceding Article, the incorporator must decide the following matters with respect to the shares solicited at incorporation (meaning the shares issued at incorporation that are allotted to the persons who accept the solicitation under that paragraph and apply to subscribe for the shares issued at incorporation; hereinafter the same applies in this Section):

the number of the shares solicited at incorporation (if the stock company to be incorporated is a company with class shares, referring to the class and the number of each class of shares solicited at incorporation; hereinafter the same applies in this Subsection);

the amount to be paid in for shares solicited at incorporation (meaning the amount of money which is to be paid in in exchange for one share solicited at incorporation; hereinafter the same applies in this Subsection);

the date by or period during which payment is to be made of the money to be paid in in exchange for the shares solicited at incorporation;

if there is any arrangement that subscriptions for shares solicited at incorporation may be rescinded if the registration of incorporation is not effected by a certain date, a statement of the arrangement and the date.

If the incorporator intends to determine the matters set forth in any item of the preceding paragraph, the incorporator must obtain the consent of all incorporators.

The conditions for the solicitation under paragraph (1) of the preceding Article, such as the amount to be paid in for shares solicited at incorporation, must be decided uniformly for each relevant solicitation (or, if the stock company to be incorporated is a company with class shares, for each that class and solicitation).

The incorporator must notify the person who, in response to the solicitation under Article 57, paragraph (1), intends to apply to subscribe for the shares solicited at incorporation of the following matters:

the date of the certification of the articles of incorporation and the name of the notary public who effected the certification;

the matters set forth in each item of Article 27, each item of Article 28, each item of Article 32, paragraph (1) and each item of paragraph (1) of the preceding Article;

the value of the property contributed by the incorporator;

the place designated for payment pursuant to the provisions of Article 63, paragraph (1);

beyond what is set forth in the preceding items, any other matters provided by Ministry of Justice Order.

If not all of the incorporators fulfill the performance of contributions, the incorporators may not give the notice pursuant to the provisions of the preceding paragraph until after the date provided for in Article 36, paragraph (1).

A person who intends to apply to subscribe for shares solicited at incorporation in response to a solicitation under Article 57, paragraph (1) must deliver a document giving the following information to the incorporators:

the name and address of the person who intends to apply; and

the number of shares solicited at incorporation that the person intends to subscribe for.

A person who submits the application referred to in the preceding paragraph may, in lieu of delivering a document as referred to in that paragraph, provide the information that is required to be detailed in the document referred to in that paragraph by electronic or magnetic means, with the approval of the incorporators and pursuant to the provisions of Cabinet Order. In these cases, the person who submitted the application is deemed to have given a document under that paragraph.

If there are changes in the matters set forth in any item of paragraph (1), the incorporators must immediately notify persons who submitted applications under paragraph (3) (hereinafter in this Subsection referred to as "applicants") thereof and of the matters so changed.

It would be sufficient for a notice or demand to an applicant by the incorporators to be sent to the address under paragraph (3), item (i) (or, if relevant applicant notifies the incorporators of a different place or contact address for the receipt of notices or demand, to the place or contact address).

The notice or demand referred to in the preceding paragraph is deemed to have arrived at the time when that notice or demand should normally have arrived.

The incorporators must specify from among the applicants the persons to whom the shares solicited at incorporation are allotted, and specify the number of the shares solicited at incorporation that are allotted to relevant persons. In these cases, the incorporators may reduce the number of the shares solicited at incorporation to be allotted to relevant applicants to less than the number referred to in paragraph (3), item (ii) of the preceding Article.

The incorporator must notify the Applicant, no later than the day immediately preceding the date referred to in Article 58, paragraph (1), item (iii) (or, in case a period is specified under that item, no later than the day immediately preceding the first day of that period), of the number of the shares solicited at incorporation that are allotted to relevant applicant.

The provisions of the preceding two Articles do not apply if persons who intend to subscribe for shares solicited at incorporation execute contracts for subscriptions for the total number of those shares.

The persons set forth in the following items will be the subscribers for the number of the shares solicited at incorporation provided for in each item with respect to the shares solicited at incorporation:

applicants:the number of the shares solicited at incorporation as allotted by the incorporators; or

persons who subscribed for the total number of the shares solicited at incorporation under the contracts referred to in the preceding Article:the number of the shares solicited at incorporation for which the persons have subscribed.

The subscribers for the shares solicited at incorporation must pay fully the amount to be paid in for shares solicited at incorporation for which the subscribers subscribed, at the bank, etc. designated for payment by the incorporator, no later than the date set forth in Article 58, paragraph (1), item (iii) or within the period under that item.

Transferring of the right to become a holder of the shares issued at incorporation by effecting payment pursuant to the preceding paragraph may not be asserted against the stock company after formation.

If a subscriber for the shares solicited at incorporation fails to make payment pursuant to the provisions of paragraph (1), the subscriber will forfeit the right to become the holder of the shares solicited at incorporation by making relevant payment.

If solicitation under Article 57, paragraph (1) has been carried out, the incorporators may request the bank, etc. that handled the payment pursuant to the provisions of Article 34, paragraph (1) and paragraph (1) of the preceding Article to issue a certificate of deposit of a money amount paid in pursuant to the provisions.

The bank, etc. that issued the certificate referred to in the preceding paragraph may not assert against the stock company after formation any misstatement in relevant certificate or the existence of restrictions regarding the return of money paid in pursuant to the provisions of Article 34, paragraph (1) or paragraph (1) of the preceding Article.

If solicitation under Article 57, paragraph (1) is to be carried out, the incorporator must call a meeting of the shareholders at incorporation (meaning shareholders who are to be the shareholders of the stock company pursuant to the provisions of Article 50, paragraph (1) or Article 102, paragraph (2); the same applies hereinafter) without delay on and after either the date under Article 58, paragraph (1), item (iii) or the last day of the period under that item, whichever comes later (relevant meeting is referred to as an "organizational meeting" hereinafter).

In the cases referred to in the preceding paragraph, the incorporators may call an organizational meeting at any time when the incorporators find it necessary.

At an organizational meeting, only the matters provided for in this Section and matters regarding the incorporation of a stock company, such as the discontinuation of the incorporation of a stock company and the conclusion of an organizational meeting, may be resolved.

The incorporators must decide the following matters if the incorporators call an organizational meeting:

the date, time and place of the organizational meeting;

the purpose of the organizational meeting;

that shareholders at incorporation who do not attend the organizational meeting may vote in writing, if so arranged;

that shareholders at incorporation who do not attend the organizational meeting may vote by electronic or magnetic means, if so arranged;

beyond what is set forth in the preceding items, any matters prescribed by Ministry of Justice Order.

If the number of the shareholders at incorporation (excluding shareholders at incorporation who may not exercise votes on all matters which may be resolved at organizational meetings; the same applies in the following Article through Article 71) is one thousand or more, the incorporators must decide the matters set forth in item (iii) of the preceding paragraph.