Companies Act

If the book value of the monies, etc. delivered to members of a limited liability company through the distribution of profits (hereinafter in this Subsection referred to as "distributed amount") exceeds the amount of the profit as at the day when relevant distribution of profit takes place, relevant distribution of profit cannot be effected. In these cases, the limited liability company may reject demands under the provisions of Article 621, paragraph (1).

If a limited liability company effects the distribution of profit in violation of the provisions of the preceding paragraph, the members that executed the operations in connection with relevant distribution of profits are jointly and severally liable to relevant limited liability company, together with the members that received relevant distribution of profits, for payment of the monies in an amount equivalent to relevant distributed amount; provided, however, that this does not apply if relevant members who executed relevant operations have proven that they did not fail to exercise due care with respect to the performance of their duties:

Exemption from the obligations in the preceding paragraph cannot be given; provided, however, that this does not apply if consent of all members is obtained with respect to the exemption of relevant obligations, to the extent of the amount of profits at the day when the distribution of profits takes place.

In the cases provided for in paragraph (1) of the preceding Article, if members that received the distribution of profits are without knowledge with respect to the fact that the distributed amount exceeds the amount of the profit at the day when relevant distribution of profit takes place, the members are not obliged to respond to a demand for reimbursement by the members who executed the operations in connection with relevant distribution of profit with respect to relevant distributed amount.

In the cases provided for in paragraph (1) of the preceding Article, creditors of a limited liability company may have the members that received the distribution of profits pay monies equivalent to the distributed amount (or, if relevant distributed amount exceeds the amount which the limited liability company owes to relevant creditors, relevant amount owed).

The provisions of Article 623, paragraph (2) do not apply to members in a limited liability company.

If a limited liability company effects the distribution of profits, if a deficit (meaning the amount calculated by the method prescribed by Ministry of Justice Order as the amount of the deficit of the limited liability company; hereinafter the same applies in this paragraph) occurs at the end of the business year that contains the day on which relevant distribution of profit takes place, members that executed the operations in connection with relevant distribution of profit with respect to relevant distributed amount are jointly and severally liable to relevant limited liability company, together with the members who received relevant distribution of profit, for payment of the amount of that deficit (or, if the amount of relevant deficit exceeds the distributed amount, relevant distributed amount); provided, however, that this does not apply if relevant members who executed relevant operations have proven that they did not fail to exercise due care with respect to the performance of their duties:

Exemption from the obligations in the preceding paragraph cannot be given without the consent of all members.

Notwithstanding the provisions of Article 624, paragraph (1), members in a limited liability company may not make the demand under the provisions of the first sentence of that paragraph except if the value of member's contributions will be reduced by changes in the articles of incorporation.

If the book value of the monies, etc. delivered by a limited liability company to a member by contribution refunds (hereinafter in this Subsection referred to as "amount of contribution refunds") exceeds the amount of surplus as of the day when a demand is made under the provisions of the first sentence of Article 624, paragraph (1) (if the reduction in the stated capital under Article 626, paragraph (1) is effected, the amount of surplus after relevant reduction; hereinafter the same applies in this Subsection), or the reduction in the value of member's contributions in the preceding paragraph, whichever is lower, relevant contribution refunds cannot be effected. In these cases, the limited liability company may reject the demand under the provisions of the first sentence of Article 624, paragraph (1).

If a limited liability company effects the contribution refunds in violation of the provisions of the preceding paragraph, the members who executed the operations in connection with relevant contribution refunds are jointly and severally liable to relevant limited liability company, together with the members who received relevant contribution refunds, for payment of the monies in an amount equivalent to relevant amount of contribution refunds; provided, however, that this does not apply if relevant members who executed relevant operations have proven that they did not fail to exercise due care with respect to the performance of their duties:

Exemption from the obligations under the preceding paragraph may not be given; provided, however, that this does not apply if consent of all members is obtained with respect to the exemption of relevant obligations to the extent of the surplus as at the day when the contribution refunds take place.

In the cases provided for in paragraph (1) of the preceding Article, if members who received the contribution refund are without knowledge with respect to the fact that the amount of contribution refunds exceeds the amount of surplus at the day when relevant contribution refunds takes place, relevant members do not have the obligation to respond to the demand for reimbursement by the members that executed the operations in connection with relevant contribution refunds with respect to relevant amount of contribution refunds.

In the cases provided for in paragraph (1) of the preceding Article, creditors of a limited liability company may have the members that received the contribution refunds pay the monies equivalent to the amount of contribution refunds (or, if relevant amount of contribution refunds exceeds the amount that the limited liability company owes to relevant creditors, relevant amount owed).

If the book value of the monies, etc. delivered by a limited liability company to members through equity interest refund (hereinafter in this Subsection referred to as "partnership interest refund amount") exceeds the surplus as of the day when relevant equity interest refund takes place, creditors of relevant limited liability company may state their objections as to the equity interest refund to relevant limited liability company.

In cases provided for in the preceding paragraph, the limited liability company must make the 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 in item (ii) cannot be less than one month (or, if the partnership interest refund amount exceeds the amount calculated by the method prescribed by Ministry of Justice Order as the amount of the net assets of relevant limited liability company, two months):

the details of the equity interest refund that exceeds relevant surplus; 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 limited liability company effects the public notice in 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 limited liability company is no longer required to give separate notices under the provisions of the preceding paragraph; provided, however, that this does not apply if the partnership interest refund amount exceeds the amount calculated by the method prescribed by Ministry of Justice Order as the amount of the net assets of relevant limited liability company.

If the creditors do not raise any objection within the period under paragraph (2), item (ii), relevant creditors are deemed to have approved relevant equity interest refund.

If the creditors raise objections within the period under paragraph (2), item (ii), the limited liability company must make the payment or provide appropriate security to relevant creditors, or entrust appropriate assets to a qualified trust company with the purpose of assuring the payment to relevant creditors; provided, however, that this does not apply if, if the partnership interest refund amount does not exceed the amount calculated by the method prescribed by Ministry of Justice Order as the net assets of relevant limited liability company, relevant equity interest refund is unlikely to be detrimental to relevant creditors.

If a limited liability company effects an equity interest refund in violation of the provisions of the preceding paragraph, the members who executed the operations in connection with relevant equity interest refund are jointly and severally liable to relevant limited liability company, together with the members who received relevant equity interest refund, for payment of the monies in the amount equivalent to relevant partnership interest refund amount; provided, however, that this does not apply if relevant members who executed the operations regarding the refund of equity interest have proven that they did not fail to exercise due care with respect to the performance of their duties:

Exemptions from the obligations under the preceding paragraph cannot be given; provided, however, that this does not apply if consent of all members is obtained with respect to the exemption of relevant obligations to the extent of the surplus as at the day when the equity interest refund takes place.