Companies Act

Accounting advisors, together with the directors, prepare financial statements (meaning financial statements as provided in Article 435, paragraph (2); hereinafter the same applies in this Chapter) and the annexed detailed statements accompanying them, provisional financial statements (meaning provisional financial statements as provided in Article 441, paragraph (1); hereinafter the same applies in this Chapter), and consolidated financial statements (meaning consolidated financial statements as provided in Article 444, paragraph (1); the same applies in Article 396, paragraph (1)). In these cases, the accounting advisors must prepare accounting advisor's report pursuant to the provisions of Ministry of Justice Order.

Accounting advisors may at any time inspect or copy the following things or request reports on accounting from directors and managers or other employees:

if the account books or the materials relating thereto are prepared in writing, relevant documents; and

if an account book or material relating thereto has been prepared as an electronic or magnetic record, 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 it is necessary for the purpose of performing duties of an accounting advisor, an accounting advisor may request reports on accounting from a subsidiary company of the company with accounting advisor, or investigate the status of the operations and financial status of the company with accounting advisor or of its subsidiary company.

The subsidiary company under the preceding paragraph may refuse the report or investigation under that paragraph if there are justifiable grounds.

Accounting advisors may not employ a person set forth in Article 333, paragraph (3), item (ii) or item (iii) in performing their duties.

For the purpose of the application of the provisions of paragraph (1) and paragraph (2) to a company with nominating committee, etc., the term "directors" in paragraph (1) is deemed to be replaced with "executive officers", and the phrase "directors and" in paragraph (2) is deemed to be replaced with "executive officers and directors, and".

If an accounting advisor detects, during the performance of their duties, misconduct or material facts in violation of laws and regulations or the articles of incorporation in connection with the execution of the duties of the directors, they must report the same to the shareholders (or, for a company with company auditor, to the company auditors) without delay.

For the purpose of the application of the provisions of the preceding paragraph to a company with board of company auditors, the phrase "shareholders (or, for a company with company auditor, to the company auditors)" in that paragraph is deemed to be replaced with "board of company auditors".

For the purpose of application of the provisions of paragraph (1) to a company with audit and supervisory committee, the phrase "shareholders (or, for a company with company auditor, to the company auditors)" is deemed to be replaced with "audit and supervisory committee".

For the purpose of the application of the provisions of paragraph (1) to a company with nominating committee, etc., the phrase "directors" in that paragraph is deemed to be replaced with "executive officers or directors" and "shareholders (or, for a company with company auditor, to the company auditors)" in the same paragraph is deemed to be replaced with "audit committee".

Accounting advisors (if accounting advisors are audit corporation or tax accountancy corporation, the members who are to perform the duties of the accounting advisors; hereinafter the same applies in this Article) of a company with board of directors must attend the board of directors meetings that effect the approval under Article 436, paragraph (3), Article 441, paragraph (3) or Article 444, paragraph (5). In these cases, accounting advisors must state their opinions if they regard it necessary.

At a company with accounting advisor, a person who is to call the board of directors meetings under the preceding paragraph must dispatch the notice thereof to each accounting advisor no later than one week (or if a shorter period of time is provided for in the articles of incorporation, that shorter period of time) prior to the day of the board of directors meeting.

In order to hold a board of directors meeting under paragraph (1) without the calling procedures pursuant to the provisions of Article 368, paragraph (2) at a company with accounting advisor, the consent of all accounting advisors must be obtained.

If an accounting advisor's opinion on matters regarding the preparation of the statements provided for in Article 374, paragraph (1) differs from those of the directors, the accounting advisor (if the accounting advisors are audit corporation or tax accountancy corporations, referring to the members who are to perform the duties of the accounting advisors) may state opinions at the shareholders meeting.

For the purpose of the application of the provisions of the preceding paragraph to a company with nominating committee, etc., the term "directors" in that paragraph is deemed to be replaced with "executive officers".

Accounting advisors must keep the things set forth in the following items at the place designated by the accounting advisors for the period provided for in each relevant item, pursuant to the provisions of Ministry of Justice Order:

financial statements and annexed detailed statements accompanying them, and the accounting advisor's report for each business year:five years from the day one week (or, for a company with board of directors, two weeks) prior to the day of the annual shareholders meeting (or, in the case provided for in Article 319, paragraph (1), from the day when the proposal under that paragraph was submitted); and

provisional financial statements and the accounting advisor's report:five years from the day when the provisional financial statement was prepared.

The shareholders and creditors of a company with accounting advisor may submit the following request to the accounting advisors at any time during the business hours of the company with accounting advisor (except for cases prescribed by Ministry of Justice Order as cases where it is difficult for the accounting advisor to response to the request); provided, however, that the fees designated by relevant accounting advisors are required to be paid in order to submit the requests set forth in item (ii) or item (iv):

if the statements set forth in each item of the preceding paragraph are prepared in writing, a request to inspect the statements;

a request for a transcript or extract of the statements referred to in the preceding item;

if a statement set forth in one of the items of the preceding paragraph has been prepared as an electronic or magnetic record, a request to inspect anything that is used in a manner prescribed by Ministry of Justice Order to display the information recorded in that electronic or magnetic record; or

a request to be provided with the information recorded in an electronic or magnetic record as referred to in the preceding item by an electronic or magnetic means that the accounting advisor has designated, or a request to be issued a document showing that information.

If it is necessary for the purpose of exercising the rights of a member of the parent company of a company with accounting advisor, 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 things of relevant company with financial auditor set forth in each item of paragraph (1); provided, however, that in order to make the requests set forth in item (ii) or item (iv) of the preceding paragraph, the fees designated by relevant accounting advisor are required to be paid.

The remunerations for accounting advisors are fixed by a resolution at a shareholders meeting if the amount thereof is not prescribed in the articles of incorporation.

If there are two or more accounting advisors, and there are no provisions in the articles of incorporation or no resolution at a shareholders meeting with respect to the remunerations for each accounting advisor, relevant remunerations are fixed by discussion by the accounting advisors within the extent of the remunerations referred to in the preceding paragraph.

Accounting advisors (or, if accounting advisors are audit corporation or tax accountancy corporation, the members who are to perform the duties of accounting advisors) may state their opinions on remunerations for the accounting advisors at a shareholders meeting.

If accounting advisors make the following requests to a company with accounting advisor with respect to the execution of their duties, relevant company with accounting advisor may not refuse relevant request except if it proves that the expense or debt relating to that request is not necessary for the execution of the duties of the accounting advisors:

requests for advancement of expenses;

requests for indemnification of the expenses paid and interests thereon from and including the day of the payment; or

requests for payment (or, if relevant debt is not yet due, the provision of reasonable security) to the creditor of a debt incurred.