Companies Act

Shareholders at incorporation may diversely exercise the voting rights they hold. In these cases, the shareholders must notify the incorporators to that effect and of the reasons for the same no later than three days prior to the day of the organizational meeting.

If the shareholders at incorporation referred to in the preceding paragraph are not persons who subscribed for the shares issued at incorporation on behalf of others, the incorporators may refuse the diverse exercise of voting rights held by relevant shareholders at incorporation pursuant to the provisions of the preceding paragraph.

If incorporators are requested by the shareholders at incorporation to provide explanations on certain matters at an organizational meeting, the incorporators must provide necessary explanations with respect to relevant matters; provided, however, that this does not apply if relevant matters are not relevant to the matters that are the purpose of the organizational meeting, or if relevant explanations are to the serious detriment of the common interest of the shareholders at incorporation, or in other cases prescribed by Ministry of Justice Order as cases where there are justifiable grounds.

The chairperson of an organizational meeting maintains the order of relevant organizational meeting and organize the business of the meeting.

The chairperson of an organizational meeting may require anyone who does not comply with the orders of the chairperson or who otherwise disturbs the order of relevant organizational meeting to leave the room.

If a resolution for the postponement or adjournment is passed at an organizational meeting, the provisions of Article 67 and Article 68 do not apply.

Minutes must be prepared with respect to the business of organizational meetings pursuant to the provisions of Ministry of Justice Order.

The incorporators (or the stock company after the formation of relevant stock company; the same applies in paragraph (2) of the following Article) must keep the minutes referred to in the preceding paragraph at a place designated by the incorporators (or at the head office of the stock company if after the incorporation of relevant stock company; the same applies in paragraph (2) of the same Article) for the period of ten years from the day of the organizational meeting.

The shareholders at incorporation (or the shareholders and creditors of the stock company after the formation of relevant stock company; the same applies in paragraph (3) of the following Article) may submit the following requests at any time during the hours designated by the incorporators (or during the business hours of relevant stock company if after the incorporation of relevant stock company; the same applies in the same paragraph):

if the minutes under paragraph (1) are prepared in writing, requests for inspection or copying of relevant documents; and

if the minutes under paragraph (1) have been prepared as an electronic or magnetic record, a request to inspect or copy anything that is used in a manner prescribed by Ministry of Justice Order to display the information recorded in that electronic or magnetic record.

If, after the formation of a stock company, it is necessary for the purpose of exercising the rights of a member of the parent company of relevant stock company, the relevant member of the parent company may, with the permission of the court, make the requests set forth in each item of the preceding paragraph with respect to the minutes referred to in paragraph (1).

If incorporators submit a proposal with respect to any matter that is the purpose of an organizational meeting, if all shareholders at incorporation (limited to those who may vote with respect to relevant matter) manifest their intention to agree to relevant proposal in writing or using an electronic or magnetic record, it is deemed that a resolution to approve relevant proposal has been passed at an organizational meeting.

The incorporators must keep the documents or an electronic or magnetic record as referred to in the provisions of the preceding paragraph at a place designated by the incorporators for the period of ten years from the day when the resolution at the organizational meeting is deemed to have been passed pursuant to the provisions of the preceding paragraph.

The shareholders at incorporation may submit the following requests at any time during the hours designated by the incorporators:

requests for inspection or copying of the documents under the preceding paragraph; and

requests to inspect or copy anything that is used in a manner prescribed by Ministry of Justice Order to display the information recorded in the electronic or magnetic record referred to in the preceding paragraph.

If, after the formation of a stock company, it is necessary for the purpose of exercising the rights of a member of the parent company of relevant stock company, the relevant member of the parent company may, with the permission of the court, make the requests set forth in each item of the preceding paragraph with respect to the documents or an electronic or magnetic record as referred to in paragraph (2).

If the incorporators notify all shareholders at incorporation of any matter that is to be reported to an organizational meeting, if all shareholders at incorporation manifest in writing or using an electronic or magnetic record their intention to agree that it is not necessary to report relevant matter to the organizational meeting, it is deemed that relevant matter has been reported to the organizational meeting.

If the stock company to be incorporated is a company with class shares, if there are provisions, as a feature of a certain class of shares to be issued as at the incorporation, to the effect that, with respect to the matter that is subject to the resolution at a shareholders meeting, in addition to relevant resolution, the resolution at a general meeting of class shareholders constituted by the class shareholders of relevant class of shares is required, relevant matter does not become effective unless the resolution is passed at an organizational meeting of class shareholders (meaning a meeting of class shareholders at incorporation of a certain class of the shares issued at incorporation; the same applies hereinafter) constituted by the class shareholders at incorporation of the shares issued at incorporation of relevant class (meaning the shareholders at incorporation of a certain class of shares issued at incorporation; hereinafter the same applies in this Section) in addition to the resolution at the organizational meeting, consistently with the provisions of articles of incorporation; provided, however, that this does not apply to the case where there exists no class shareholder at incorporation who may vote at relevant organizational meeting of class shareholders.

If a resolution is to be passed at an organizational meeting of class shareholders pursuant to the provisions of the preceding Article, Article 90, paragraph (1) (including the case where it is applied mutatis mutandis under paragraph (2) of the same Article), Article 92, paragraph (1) (including the case where it is applied mutatis mutandis under paragraph (4) of the same Article), Article 100, paragraph (1) or Article 101, paragraph (1), the incorporators must call an organizational meeting of class shareholders.

Resolutions at an organizational meeting of class shareholders will be passed by a majority of the votes of the class shareholders at incorporation who are entitled to vote at relevant organizational meeting of class shareholders, being a majority of two thirds or more of the votes of relevant class shareholders at incorporation who are present at the meeting.

Notwithstanding the provisions of the preceding paragraph, resolutions under Article 100, paragraph (1) must be passed by a majority of the class shareholders at incorporation who are entitled to vote at relevant organizational meeting of class shareholders, being a majority of two thirds or more of the votes of relevant class shareholders at incorporation.

The provisions of Article 67 through Article 71, Article 72, paragraph (1), and Article 74 through Article 82 apply mutatis mutandis to organizational meetings of class shareholders. In these cases, the term "shareholders at incorporation" in Article 67, paragraph (1), item (iii) and item (iv) and paragraph (2) of the same Article, Article 68, paragraph (1) and paragraph (3), Article 69 through Article 71, Article 72, paragraph (1), Article 74, paragraph (1), paragraph (3) and paragraph (4), Article 75, paragraph (2), Article 76, paragraph (2) and paragraph (3), Article 77, the main clause of Article 78 and Article 82, paragraph (1) is deemed to be replaced with as "class shareholders at incorporation (meaning shareholders at incorporation for a certain class of shares issued at incorporation)".

The incorporators must report matters regarding the incorporation of a stock company to an organizational meeting.

In the cases set forth in the following items, the incorporators must submit or provide to an organizational meeting a document or an electronic or magnetic record in which the information provided for in these items has been detailed or recorded:

if articles of incorporation provide for the matters set forth in each item of Article 28 (excluding the matters provided for in each item of Article 33, paragraph (10) in cases set forth in these items):the content of the report referred to in Article 33, paragraph (4) of the inspector under paragraph (2) of that Article; and

in the case set forth in Article 33, paragraph (10), item (iii):the content of the verification provided in that item.

If the solicitation under Article 57, paragraph (1) is carried out, the election of the directors at incorporation, accounting advisors at incorporation, company auditors at incorporation and financial auditors at incorporation must be made by the resolution at an organizational meeting.

If the stock company to be incorporated is a company with audit and supervisory committee, election of a director at incorporation pursuant to the provisions of the preceding paragraph must be implemented by distinguishing a director at incorporation who is an audit and supervisory committee member at incorporation and other directors.

If the purpose of an organizational meeting is the election of two or more 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; hereinafter the same applies in this Article), the shareholders at incorporation (limited to the shareholders at incorporation entitled to vote with respect to the election of the directors at incorporation; hereinafter the same applies in this Article) may request the incorporators that the directors at incorporation be elected pursuant to the provisions of paragraph (3) through paragraph (5), except as otherwise provided in the articles of incorporation.

The request under the provisions of the preceding paragraph must be made no later than five days prior to the day of the organizational meeting referred to in the same paragraph.

Notwithstanding the provisions of Article 72, paragraph (1), if a request is made pursuant to the provisions of paragraph (1), a shareholder at incorporation is entitled to relevant number of votes as is equal to the number of the directors at incorporation to be elected in relevant organizational meeting, for each one share issued at incorporation for which the shareholder at incorporation subscribed (or, if the share unit is provided for in the articles of incorporation, for each one unit of the shares issued at incorporation) with respect to the resolution of the election of the directors at incorporation. In these cases, the shareholder at incorporation may exercise the votes of the shareholder at incorporation by casting votes for only one candidate or for two or more candidates.

In the cases referred to in the preceding paragraph, the directors at incorporation are to be elected in the order of the votes obtained by respective candidates.

Beyond what is specified in the preceding two paragraphs, necessary matters regarding the election of directors at incorporation if a request has been made pursuant to the provisions of paragraph (1) are prescribed by Ministry of Justice Order.

Notwithstanding the provisions of Article 88, if, at incorporation of the 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 (if the stock company to be incorporated is a company with audit and supervisory committee, directors who are audit and supervisory committee members or other directors)) are provided, the 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) must be elected by a resolution at an organizational meeting of class shareholders constituted by the class shareholders at incorporation of relevant class of 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.

The provisions of the preceding paragraph 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.

Directors at incorporation, accounting advisors at incorporation, company auditors at incorporation or financial auditors at incorporation who are elected pursuant to the provisions of Article 88 may be dismissed by a resolution at an organizational meeting at any time prior to the formation of the stock company.