Companies Act

An incorporator must, without delay after subscription for shares issued at incorporation, pay in the entire sum of monies relating to the incorporator's contribution, or deliver all properties other than monies relating to the incorporator's contribution fully in money or in kind, with respect to the shares issued at incorporation for which the incorporator has subscribed; provided, however, that, if the consent of all incorporators is obtained, the foregoing provisions do not preclude an incorporator from performing registration, recording or other acts necessary to assert the creation or transfer of rights against third parties after the formation of the stock company.

The contribution in money pursuant to the provisions of the preceding paragraph must be paid at the bank, etc. (meaning a bank (meaning a bank as defined in Article 2, paragraph (1) of the Bank Act (Act No. 59 of 1981); the same applies in Article 703, item (i)), a trust company (meaning a trust company as defined in Article 2, paragraph (2) of the Trust Business Act (Act No. 154 of 2004); the same applies hereinafter) and other entities prescribed by Ministry of Justice Order as entities equivalent to the same; the same applies hereinafter) designated for payment by the incorporator.

The transferring of a right to become a holder of the shares issued at incorporation by contribution pursuant to the provisions of paragraph (1) of the preceding Article (hereinafter in this Chapter referred to as "performance of contributions") may not be asserted against the stock company after the formation.

If not all of the incorporators fulfill the performance of contributions, the incorporators must set a date and notify any incorporator who does not fulfill the performance of contributions that the incorporator must fulfill the performance of contributions by that date.

The notice under the provisions of the preceding paragraph must be given no later than two weeks prior to the date provided for in that paragraph.

Incorporator who is notified pursuant to the provisions of paragraph (1) will forfeit the right to become the holder of shares issued at incorporation by fulfilling the performance of contributions if the same fail to fulfill the performance of contributions by the date provided for in that paragraph.

If the total number of shares that may be issued by a stock company (hereinafter referred to as "total number of authorized shares") is not provided for in the articles of incorporation, the incorporators must, with the consent of all incorporators, amend the articles of incorporation and create a provision on the total number of authorized shares prior to the formation of the stock company.

If the total number of authorized shares is provided for in the articles of incorporation, the incorporators may, with the consent of all incorporators, amend the articles of incorporation with respect to the total number of authorized shares at any time prior to the formation of the stock company.

The total number of shares issued at incorporation may not be less than one quarter of the total number of authorized shares; provided, however, that this does not apply if the stock company to be incorporated is not a public company.

The incorporator must elect the director at incorporation (meaning person who becomes director at the incorporation; the same applies hereinafter) without delay after the fulfillment of the performance of contributions.

If the stock company to be incorporated is a company with audit and supervisory committee, the election of directors at incorporation pursuant to the provisions of the preceding paragraph must be implemented by distinguishing the election of a director at incorporation who is an audit and supervisory committee member at incorporation (meaning a person who becomes an audit and supervisory committee member (meaning an member of the audit and supervisory committee; the same applies hereinafter) at incorporation of a stock company; the same applies hereinafter) from among other directors at incorporation.

In the cases set forth in the following items, the incorporator must elect the persons specified in each of those items without delay after the fulfillment of the performance of contributions:

if the stock company to be incorporated is a company with accounting advisor:accounting advisor at incorporation (meaning a person who becomes an accounting advisor at the incorporation; the same applies hereinafter);

if the stock company to be incorporated is a company with company auditor (including any stock company the articles of incorporation of which provide that the scope of the audit by its company auditor is limited to an audit related to accounting):company auditor at incorporation (meaning a person who becomes a company auditor at the incorporation; the same applies hereinafter);

if the stock company to be incorporated is a company with financial auditor:financial auditor at incorporation (meaning a person who becomes a financial auditor at the incorporation; the same applies hereinafter).

Persons who are prescribed in articles of incorporation as directors at incorporation (if the stock company to be incorporated is a company with audit and supervisory committee, directors at incorporation who are audit and supervisory committee members at incorporation or other directors at incorporation; hereinafter the same applies in this paragraph), accounting advisors at incorporation, company auditors at incorporation, and financial auditors at incorporation are deemed to be elected as directors at incorporation, accounting advisors at incorporation, company auditors at incorporation, and financial auditors at incorporation, respectively, upon the fulfillment of the performance of contributions.

If a stock company to be incorporated is a company with board of directors, there must be three or more directors at incorporation.

If a stock company to be incorporated is a company with board of company auditors, there must be three or more company auditors at incorporation.

If the stock company to be incorporated is a company with audit and supervisory committee, directors at incorporation who are audit and supervisory committee members at incorporation must be three persons or more.

A person who may not be a director (in cases of a company with audit and supervisory committee, a director who is an audit and supervisory committee member or other director), accounting advisor, company auditor or financial auditor of a stock company after formation pursuant to the provisions of Article 331, paragraph (1) (including the case where it is applied mutatis mutandis pursuant to Article 335, paragraph (1)), Article 333, paragraph (1) or (3), or Article 337, paragraph (1) or (3) may not become a director at incorporation (if a stock company after incorporation is a company with audit and supervisory committee, a director at incorporation who is an audit and supervisory committee member at incorporation or other director at incorporation), an accounting advisor at incorporation, a company auditor at incorporation, or a financial auditor at incorporation (hereinafter in this Section referred to as "officers, etc. at incorporation"), respectively.

The provisions of Article 331-2 apply mutatis mutandis to directors at incorporation and company auditors at incorporation.

The election of the officers, etc. at incorporation is determined by a majority of the votes of the incorporators.

In the cases provided for in the preceding paragraph, an incorporator is entitled to one vote for each one share issued at incorporation for which the performance of contributions has been fulfilled; provided, however, that, if the share unit is provided for in the articles of incorporation, an incorporator is entitled to one vote for each one unit of the shares issued at incorporation.

Notwithstanding the provisions of the preceding paragraph, if the stock company to be incorporated is a company with class shares, and it issues shares issued at incorporation of a class for which it is provided that the voting rights may not be exercised in connection with the election of some or all of the directors, with respect to relevant class of the shares issued at incorporation, the incorporators may not exercise voting rights in connection with the election of the directors at incorporation who are to become relevant directors.

For the purpose of the application of the provisions of the preceding paragraph if the stock company to be incorporated is a company with audit and supervisory committee, the phrase", director" in the same paragraph is deemed to be replaced with ", director who is an audit and supervisory committee member or other director", and the term "relevant director" is deemed to be replaced with "these directors".

The provisions of paragraph (3) apply mutatis mutandis to the election of accounting advisors at incorporation, company auditors at incorporation and financial auditors at incorporation.

Notwithstanding the provisions of paragraph (1) of the preceding Article, if, at the incorporation of a stock company, it issues shares of a class for which the matters set forth in Article 108, paragraph (1), item (ix) (limited to those relating to directors (in cases of a company with audit and supervisory committee, a director who is an audit and supervisory committee member or other director)) are provided, the election of the directors at incorporation (if the stock company to be incorporated is a company with audit and supervisory committee, a director at incorporation who is an audit and supervisory committee member at incorporation or other director at incorporation) is determined by a majority of the votes (limited to the votes with respect to relevant class of the shares issued at incorporation) of the incorporators who subscribed for relevant class of the shares issued at incorporation, consistently with the provisions of articles of incorporation with respect to the matters provided for in paragraph (2), item (ix) of that Article.

In the cases provided for in the preceding paragraph, an incorporator is entitled to one vote for each one share issued at incorporation of that class for which the performance of contributions is fulfilled; provided, however, that, if the share unit is provided for in the articles of incorporation, an incorporator is entitled to one vote for each one unit of the shares issued at incorporation of that class.

The provisions of the preceding two paragraphs apply mutatis mutandis to the cases where the shares of a class for which matters set forth in Article 108, paragraph (1), item (ix) (limited to those relating to company auditors) are provided are issued at incorporation of the stock company.

The incorporators may dismiss the officers, etc. at incorporation elected by the incorporators (including those deemed to be elected as the officers, etc. at incorporation pursuant to the provisions of Article 38, paragraph (4)) at any time prior to the formation of the stock company.

Dismissal of the officers, etc. at incorporation is determined by a majority of the votes of the incorporators (or by a majority of two thirds or more in case of dismissal of a director at incorporation who is an audit and supervisory committee member at incorporation or a company auditor at incorporation).

In the cases provided for in the preceding paragraph, an incorporator is entitled to one vote for each one share issued at incorporation for which the performance of contributions has been fulfilled; provided, however, that, if the share unit is provided for in the articles of incorporation, an incorporator is entitled to one vote for each one unit of the shares issued at incorporation.

Notwithstanding the provisions of the preceding paragraph, if the stock company to be incorporated is a company with class shares , and it issues shares issued at incorporation of a class for which it is provided that the voting rights may not be exercised in connection with the dismissal of some or all of the directors, with respect to relevant class of the shares issued at incorporation, the incorporators may not exercise voting rights in connection with the dismissal of the directors at incorporation who are to become relevant directors.

For the purpose of the application of the provisions of the preceding paragraph if the stock company to be incorporated is a company with audit and supervisory committee, the phrase", director" in the same paragraph is deemed to be replaced with ", director who is an audit and supervisory committee member or other director", and the term "relevant director" is deemed to be replaced with "these directors".

The provisions of paragraph (3) apply mutatis mutandis to the dismissal of accounting advisors at incorporation, company auditors at incorporation and financial auditors at incorporation.