Companies Act

A membership company succeeding in an absorption-type split succeeds to the rights and obligations of the company splitting in the absorption-type split, in accordance with the provisions of the absorption-type company split agreement, on the effective day.

Notwithstanding the provisions of the preceding paragraph, if a creditor of the company splitting in an absorption-type split who is able to state an objection pursuant to the provisions of Article 789, paragraph (1), item (ii) (including the case where it is applied mutatis mutandis pursuant to Article 793, paragraph (2); the same applies in the following paragraph) and who has not received the separate notice set forth in Article 789, paragraph (2) (excluding item (iii) and including the case where it is applied mutatis mutandis pursuant to Article 793, paragraph (2); the same applies in the following paragraph) (in the cases prescribed in Article 789, paragraph (3) (including the case where it is applied mutatis mutandis pursuant to Article 793, paragraph (2)), limited to one who is a creditor of the obligation caused by a tort; the same applies in the following paragraph), may request the company splitting in the absorption-type split to perform the obligations to the extent of the value of property held by the company splitting in the absorption-type split on the effective day, even if that creditor is not allowed, under the Absorption-type company split agreement, to request the company splitting in the absorption-type split to perform the obligations after the Absorption-type company split.

Notwithstanding the provisions of paragraph (1), if a creditor of the company splitting in the absorption-type split who is able to state an objection pursuant to the provisions of Article 789, paragraph (1), item (ii) and who has not received the separate notice set forth in paragraph (2) of that Article, may request the membership company succeeding in the absorption-type split to perform the obligations to the extent of the value of property to which it has succeeded, even if that creditor is not allowed, under the absorption-type company split agreement, to request the membership company succeeding in the absorption-type split to perform the obligations after the absorption-type company split.

Notwithstanding the provisions of paragraph (1), if a company splitting in the absorption-type split implemented an absorption-type company split with the knowledge that it would harm creditors (hereinafter referred to as "remaining creditors") of the obligation that would not be succeeded to a membership company succeeding in the absorption-type split, the remaining creditors may request the performance of the obligation from the membership company succeeding in the absorption-type split to the extent of the value of property to which it has succeeded; provided, however, that this does not apply if the membership company succeeding in the absorption-type split did not know that it would harm remaining creditors when the absorption-type company split became effective.

The provisions of the preceding paragraph do not apply to cases where there are provisions on the matters set forth in item (vii) of the preceding Article.

If a membership company succeeding in the absorption-type split is liable to perform the obligation set forth in paragraph (4) pursuant to the provisions of the same paragraph, the liabilities are extinguished in relation to a remaining creditor who does not demand the performance or does not give advance notice of the demand within two years from when the remaining creditor comes to know that the company splitting in the absorption-type split implemented the absorption-type company split with the knowledge that it would harm remaining creditors, when that period elapses. The same applies to when ten years elapses from the effective day.

When an order of commencement of bankruptcy proceedings, order of commencement of rehabilitation proceedings, or order of commencement of reorganization proceedings is made with regard to a company splitting in the absorption-type split, remaining creditors may not exercise the right to make a request pursuant to the provisions of paragraph (4) from a membership company succeeding in the absorption-type split.

In the case prescribed in item (iv) of the preceding Article, the company splitting in the absorption-type split, in accordance with the provisions on the matters set forth in that item, becomes a member of the membership company succeeding in the absorption-type split on the effective day. In these cases, the membership company succeeding in the absorption-type split is deemed to have effected changes to the articles of incorporation relating to the member set forth in that item on the effective day.

If there are provisions on the matter set forth in item (v), (a) of the preceding Article, the company splitting in the absorption-type split, in accordance with the provisions of the absorption-type company split agreement, becomes holders of bonds referred to in (a) of that item on the effective day.

The provisions of the preceding paragraphs do not apply if procedures under the provisions of Article 789 (excluding paragraph (1), item (iii) and paragraph (2), item (iii), and including the case where it is applied mutatis mutandis pursuant to Article 793, paragraph (2)) or Article 799 (excluding paragraph (2), item (iii)) as applied mutatis mutandis pursuant to Article 802, paragraph (2) are not completed yet or where the absorption-type merger is cancelled.

One or multiple stock companies or limited liability companies may effect an incorporation-type company split. In these cases, those companies must prepare an incorporation-type company split plan.

If two or more stock companies or limited liability companies jointly effect an incorporation-type company split, those two or more stock companies or limited liability companies must prepare an incorporation-type company split plan jointly.

If one or multiple stock companies or limited liability companies effect an incorporation-type company split, if the company that is incorporated in the incorporation-type company split (hereinafter referred to as the "company incorporated in the incorporation-type split" in this Part) is a stock company, those companies must prescribe the following matters in the incorporation-type company split plan:

the purpose, trade name, location of the head office, and the total number of authorized shares of the stock company that constitutes the company incorporated in the incorporation-type split (hereinafter referred to as the "stock company incorporated in the incorporation-type split" in this Part);

beyond what is set forth in the preceding item, the matters provided for in the articles of incorporation of the stock company incorporated in the incorporation-type split;

the names of the directors at incorporation of the stock company incorporated in the incorporation-type split;

the matters provided for in (a) through (c) below for the categories of cases set forth respectively therein:

if the stock company incorporated in the incorporation-type split is a company with accounting advisor:the name of the accounting advisor at incorporation of the stock company incorporated in the incorporation-type split;

if the stock company incorporated in the incorporation-type split 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):the name of the company auditor at incorporation of the stock company incorporated in the incorporation-type split; and

if the stock company incorporated in the incorporation-type split is a company with financial auditor:the name of the financial auditor at incorporation of the stock company incorporated in the incorporation-type split;

matters concerning the assets, obligations, employment agreements, and any other rights and obligations that the stock company incorporated in the incorporation-type split succeeds to by transfer from the company effecting the incorporation-type company split (hereinafter referred to as the "company splitting in the incorporation-type split" in this Part) through the incorporation-type company split (excluding obligations regarding shares and share options of the company splitting in the incorporation-type split that is a stock company (hereinafter referred to as the "stock company splitting in the Incorporation-type split" in this Part));

the number of shares (or, for a company with class shares, the classes of the shares and the number of the shares for each class) of the stock company incorporated in the incorporation-type split to be delivered by the stock company incorporated in the incorporation-type split to the company splitting in the incorporation-type split in lieu of all or part of the rights and obligations in connection with the business thereof when effecting the incorporation-type company split, or the method for calculating the numbers, and matters concerning the amount of the stated capital and capital reserves of the stock company incorporated in the incorporation-type split;

if two or more stock companies or limited liability companies are to jointly effect the incorporation-type company split, matters concerning allotment of the shares set forth in the preceding item to the company splitting in the incorporation-type split;

if the stock company incorporated in the incorporation-type split is to deliver to shareholders of a company splitting in the incorporation-type split bonds, etc. of the stock company incorporated in the incorporation-type split in lieu of all or part of the rights and obligations in connection with the business thereof when effecting the incorporation-type company split, the following matters concerning the relevant bonds, etc.:

if relevant bonds, etc. are bonds of the stock company incorporated in the incorporation-type split (excluding those concerning bonds with share options), the description of the classes of relevant bonds and the total amount for each class of bonds, or the method for calculating that total amount;

if relevant bonds, etc. are share options of the stock company incorporated in the incorporation-type split (excluding those attached to bonds with share options), the description of the features and number of relevant share options, or the method for calculating the number; or

if relevant bonds, etc. are bonds with share options of the stock company incorporated in the incorporation-type split, the matters prescribed in (a) concerning relevant bonds with share options and the matters prescribed in (b) concerning the share options attached to relevant bonds with share options;

in the case prescribed in the preceding item, if two or more stock companies or limited liability companies are to jointly effect the incorporation-type company split, matters concerning allotment of bonds, etc. set forth in that item to the company splitting in the incorporation-type split;

if the stock company incorporated in the incorporation-type split is to deliver to holders of share options of the stock company splitting in the incorporation-type split share options of the stock company incorporated in the incorporation-type split in lieu of relevant share options at the time of the incorporation-type company split, the following matters concerning relevant share options:

the description of the features of the share options (hereinafter referred to as the "share options in the incorporation-type split plan" in this Part) held by holders of share options of the stock company splitting in the incorporation-type split who will receive delivery of share options of the stock company incorporated in the incorporation-type split;

the description of the features and number of the share options of the stock company incorporated in the incorporation-type split to be delivered to holders of share options in the incorporation-type split plan, or the method for calculating the number; and

if the share options in the incorporation-type split plan are share options attached to bonds with share options, a statement to the effect that the stock company incorporated in the incorporation-type split will succeed to the obligations relating to bonds regarding to the bonds with share options and the description of the classes of the bonds subject to that succession and the total amount for each class of bonds, or the method for calculating that total amount;

in the case prescribed in the preceding item, matters concerning allotment of the share options of the stock company incorporated in the incorporation-type split set forth in that item to holders of share options in the incorporation-type split plan; and

if the stock company splitting in the incorporation-type split conducts any one of the following acts on the day of formation of the stock company incorporated in the incorporation-type split, a statement to that effect:

acquisition of shares under the provisions of Article 171, paragraph (1) (limited to the case where the consideration for acquisition prescribed in item (i) of that paragraph is only shares of the stock company incorporated in the incorporation-type split (including shares prescribed by Ministry of Justice Order as those equivalent thereto; the same applies in (b))); or

payment of dividends of surplus (limited to the case where the dividend property is only shares of the stock company incorporated in the incorporation-type split).

If a stock company incorporated in the incorporation-type split is a company with audit and supervisory committee, the matters set forth in item (iii) of the preceding paragraph must be determined by distinguishing directors at incorporation who are audit and supervisory committee members at incorporation and other directors at incorporation.