Companies Act

A liquidator represents the liquidating stock company; provided, however, that this does not apply if representative liquidators (meaning liquidators who represent the liquidating stock company; the same applies hereinafter) or other persons who represent the liquidating stock company are otherwise prescribed.

If there are two or more liquidators referred to in the main clause of the preceding paragraph, each liquidator represents the liquidating stock company individually.

A liquidating stock company (excluding a company with board of liquidators) may appoint representative liquidators from among the liquidators under the articles of incorporation, or through the appointment by the liquidators (excluding those that are appointed by the court pursuant to the provisions of Article 478, paragraphs (2) through (4); hereinafter the same applies in this paragraph) from among themselves pursuant to the applicable provisions of the articles of incorporation, or by the resolution at the shareholders meeting.

If directors become liquidators pursuant to the provisions of Article 478, paragraph (1), item (i), if representative directors are already specified, relevant representative directors will be the representative liquidators.

If the court appoints liquidators pursuant to the provisions of Article 478, paragraphs (2) through (4), it may prescribe representative liquidators from among those liquidators.

The provisions of Article 349, paragraphs (4) and (5) and Article 351 apply mutatis mutandis to representative liquidators, and the provisions of Article 352 apply mutatis mutandis to persons who are appointed by the provisional disposition order provided for in Article 56 of the Civil Provisional Remedies Act to perform the duties of liquidators or representative liquidators on behalf of them, respectively.

If it has become clear that the assets of a liquidating stock company are not sufficient to fully discharge its debts, liquidators must immediately file a petition for the commencement of bankruptcy proceedings.

If a liquidating stock company has become subject to the ruling for the commencement of bankruptcy proceedings, if liquidators have transferred their administration to the trustee in bankruptcy, they are deemed to have completed their duties.

In the cases provided for in the preceding paragraph, if the liquidating stock company has already made payments to creditors or distributions to shareholders, the trustee in bankruptcy may retrieve the same.

If the court has appointed the liquidator under the provisions of Article 478, paragraphs (2) through (4), the court may prescribe the amount of the remuneration that the liquidating stock companies pay to relevant liquidator.

If a liquidator fails to discharge the liquidator's duties, the liquidator is liable to compensate these liquidating stock companies for any losses arising as a result.

If a liquidator engages in any transaction set forth in Article 356, paragraph (1), item (i) in violation of the provisions of Article 356, paragraph (1) applied mutatis mutandis under Article 482, paragraph (4), the amount of the profit obtained by the liquidator or a third party as a result of relevant transaction is presumed to be amount of the losses under the preceding paragraph.

If a liquidating stock company suffers loss as a result of the transaction provided for in Article 356, paragraph (1), item (ii) or (iii) applied mutatis mutandis under Article 482, paragraph (4), the following liquidators are presumed to have failed to discharge their duties:

liquidators provided for in Article 356, paragraph (1) applied mutatis mutandis under Article 482, paragraph (4);

liquidators who decided that the liquidating stock companies would undertake relevant transaction; or

liquidators who agreed to the board of liquidators' resolution to approve relevant transaction.

The provisions of Article 424 and Article 428, paragraph (1) apply mutatis mutandis to liquidators' liability under paragraph (1). In these cases, the phrase "Article 356, paragraph (1), item (ii) (including the cases where that item is applied mutatis mutandis under Article 419, paragraph (2))" in Article 428, paragraph (1) is deemed to be replace with "Article 356, paragraph (1), item (ii) applied mutatis mutandis under Article 482, paragraph (4)".

If liquidators have acted bad faith or with gross negligence in discharging their duties, relevant liquidators are liable to compensate losses arising in a third party as a result thereof.

The provisions of the preceding paragraph also apply if the liquidators commit the acts provided for in the following items; provided, however, that this does not apply if relevant liquidators have proven that they did not fail to exercise due care with respect to the performance of their duties:

the giving of false notice with respect to important matters, the notice of which must be given when soliciting persons to subscribe for shares, share options, bonds or bonds with share options or making of false statement or records with respect to materials used for the explanation regarding the business of relevant liquidating stock company and other matters for the purpose of relevant solicitation;

the making of false statements or records with respect to important matters to be stated or recorded in the property inventory of provided for in Article 492, paragraph (1) as well as the balance sheet and administration report in Article 494, paragraph (1) and the annexed detailed statements accompanying them;

registering a false registration; or

giving false public notice.

If liquidators or company auditors are liable to compensate losses arising in the liquidating stock companies or a third party, if other liquidators or company auditors are also liable, these persons will be joint and several obligors.

In the cases provided for in the preceding paragraph, the provisions of Article 430 do not apply.

Board of liquidators is organized by all liquidators.

Board of liquidators performs the following duties:

deciding the execution of the business of the company with board of liquidators;

supervising the execution of the duties by liquidators; and

appointing and removing representative liquidators.

Board of liquidators must appoint representative liquidators from among the liquidators; provided, however, that this does not apply if there are other representative liquidators.

Board of liquidators may remove representative liquidators it appointed and persons who became representative liquidators pursuant to the provisions of Article 483, paragraph (4).

If the court has prescribed representative liquidators under the provisions of Article 483, paragraph (5), the board of liquidators cannot select or remove the representative liquidators.

Board of liquidators cannot delegate the decisions on the execution of important business such as the following matters to the liquidators:

the disposal and acceptance of transfer of important assets;

borrowing in a significant amount;

the appointment and dismissal of managers or other important employees;

the establishment, change or closure of branch offices and other important structures;

the matters set forth in Article 676, item (i)and other matters prescribed by Ministry of Justice Order as important matters regarding the solicitation of persons to subscribe for bonds; or

the development of systems necessary to ensure that the execution of the duties by the liquidators comply with the laws and regulations and the articles of incorporation, and other systems prescribed by Ministry of Justice Order as the systems necessary to ensure the proper business of a liquidating stock company.

The following liquidators execute the business of the company with board of liquidators:

a representative liquidator; and

a liquidator other than a representative liquidator who is appointed by the resolution of the board of liquidators as the liquidator who is to execute the business of a company with board of liquidators.

The provisions of Article 363, paragraph (2), Article 364 and Article 365 apply mutatis mutandis to a company with board of liquidators. In these cases, in Article 363, paragraph (2), the phrase "each item of the preceding paragraph" is deemed to be replaced with "each item of Article 489, paragraph (7)", the term "director" is deemed to be replaced with "liquidator", the term "board of directors" is deemed to be replaced with as "board of liquidators"; in Article 364, the term "Article 353" is deemed to be replaced with "Article 353 applied mutatis mutandis under Article 482, paragraph (4)", the term "board of directors" is deemed to be replaced with "board of liquidators"; in Article 365, paragraph (1), the term "Article 356" is deemed to be replaced with "Article 356 applied mutatis mutandis under Article 482, paragraph (4)", the term "board of directors" is deemed to be replaced with "board of liquidators"; and in Article 365, paragraph (2), the phrase "each item of Article 356, paragraph (1)" is deemed to be replaced with "each item of Article 356, paragraph (1) applied mutatis mutandis under Article 482, paragraph (4)", the term "director" is deemed to be replaced with as "liquidator", and the phrase "to the board of directors" is deemed to be replaced with "to the board of liquidators".

A board of liquidators meeting is convened by each liquidator; provided, however, that, if the liquidator who convenes the board of liquidators meeting is prescribed by the articles of incorporation or the board of liquidators, relevant liquidator convenes the meeting.

In the case provided for in the proviso to the preceding paragraph, liquidators other than the liquidator prescribed under the provisions of the proviso to that paragraph (hereinafter in this paragraph referred to as "convener") may request the convener that the convener convene the board of liquidators meeting by indicating to the convener the matters that are the purpose of the board of liquidators meeting.

If the convener fails to send, within five days from the day of the request under the provisions of preceding paragraph, any notice of convocation of a board of liquidators meeting that specifies a day falling within two weeks from the day of that request as the day of the board of liquidators meeting, the liquidators who made that request may convene the board of liquidators meeting.

The provisions of Article 367 and Article 368 apply mutatis mutandis to the convocation of the board of liquidators meeting at a company with board of liquidators. In these cases, in Article 367, paragraph (1), the phrase "a company with company auditor, company with audit and supervisory committee and company with nominating committee, etc." is deemed to be replaced with "a company with company auditor", the phrase "any director" is deemed to be replaced with "any liquidator"; in paragraph (2) of the same Article, the phrase "to the directors (or to the convener in the case provided for in the proviso to paragraph (1) of the preceding Article)" is deemed to be replaced with "to the liquidators (or to the convener provided for in Article 490, paragraph (2) in the case provided for in the proviso to paragraph (1) of that Article)"; in paragraph (3) and paragraph (4) of the same Article, the phrase "paragraph (3) of the preceding Article" is deemed to be replaced with "Article 490, paragraph (3)"; in Article 368, paragraph (1),the term "each director" is deemed to be replaced with "each liquidator"; and in paragraph (2) of the same Article, the phrase "directors (or" is deemed to be replaced with "liquidators (or", and "directors and" is deemed to be replaced with "liquidators and".

The provisions of Article 369 through Article 371 apply mutatis mutandis to the resolution of board of liquidators in companies with board of liquidators. In these cases, in Article 369, paragraph (1), the term "of the directors" is deemed to be replaced with "of the liquidators"; in paragraph (2) of the same Article, the term "directors" is deemed to be replaced with "liquidators"; in paragraph (3) of the same Article, the phrase "directors and" is deemed to be replaced with "liquidators and"; in paragraph (5) of the same Article, the phrase "directors who" is deemed to be replaced with "liquidators who"; in Article 370, the phrase "directors submit" is deemed to be replaced with "liquidators submit", and the phrase "directors (" is deemed to be replaced with "liquidators ("; in Article 371, paragraph (3), the phrase "a company with company auditor, company with audit and supervisory committee, and company with nominating committee etc." is deemed to be replaced with "a company with company auditor"; and in paragraph (4) of the same Article, the phrase "officers or executive officers" is deemed to be replaced with "liquidators or company auditors".

The provisions of Article 372, paragraph (1) and paragraph (2) apply mutatis mutandis to the report to board of liquidators at a company with board of liquidators. In these cases, in Article 372, paragraph (1), the phrase "the directors, accounting advisors, company auditors or financial auditors" is deemed to be replaced with "liquidators or company auditors", the phrase "directors (" is deemed to be replaced with "liquidators (", and "directors and" is deemed to be replaced with "liquidators and"; and in Article 372, paragraph (2), and the term "Article 363, paragraph (2)" is deemed to be replaced with "Article 363, paragraph (2)applied mutatis mutandis under Article 489, paragraph (8)";