Medical Care Act

A medical corporation may merge with another medical corporation. In this case, the medical corporation to be merged must conclude a merger agreement.

When a medical corporation conducts an absorption-type merger (meaning a merger by a medical corporation with another medical corporation whereby all of the rights and obligations of the medical corporation to be dissolved as a result of the merger are to be succeeded to by the medical corporation to survive the merger; hereinafter the same applies in this Division), the absorption-type merger agreement must stipulate the names and locations of the principal offices of the medical corporation that will survive the absorption-type merger (hereinafter referred to as the "surviving medical corporation in the absorption-type merger" in this Division) and the medical corporation that will dissolve as a result of the absorption-type merger (hereinafter referred to as the "dissolving medical corporation in the absorption-type merger" in this Division), and other particulars specified by an Order of the Ministry of Health, Labour and Welfare.

A medical corporation as an association must obtain the consent of all members of the relevant medical corporation for an absorption-type merger agreement.

A medical corporation as a foundation may conduct an absorption-type merger only when its act of endowment provides that it may do so.

A medical corporation as a foundation must obtain the consent of two-thirds or more of its directors for an absorption-type merger agreement, unless otherwise provided for in its act of endowment.

An absorption-type merger must not take effect unless approved by the prefectural governor (meaning the prefectural governor of the location of the principal office of the surviving medical corporation in the absorption-type merger).

The provisions of Article 55, paragraph (7) apply mutatis mutandis to the approval set forth in the preceding paragraph.

When a medical corporation has obtained the approval set forth in paragraph (4) of the preceding Article, the corporation must prepare an inventory of property and a balance sheet within two weeks from the date of the notice of the approval.

Until the merger pertaining to an absorption-type merger approved under paragraph (4) of the preceding Article is registered, a medical corporation must keep the inventory of property and balance sheet prepared pursuant to the provisions of the preceding paragraph at its principal office and make them available for inspection upon request from its creditors, pursuant to the provisions of an Order of the Ministry of Health, Labour and Welfare.

A medical corporation, within the period set forth in paragraph (1) of the preceding Article, is to make a public notice to its creditors to the effect that any objection, if any, should be stated within a certain period of time, and must notify each known creditor separately. However, such period is not to be less than two months.

If creditors do not object to the absorption-type merger within the period set forth in the preceding paragraph, it is to be deemed that they have approved the absorption-type merger.

When a creditor has made an objection, the medical corporation must pay or provide reasonable security to the creditor or place reasonable property with a trust company, etc. (meaning a trust company and a financial institution (meaning a financial institution authorized under Article 1, paragraph (1) of the Act on Engagement in Trust Business by Financial Institutions (Act No. 43 of 1943)) engaged in trust business; the same applies hereinafter) for the purpose of having the creditor receive payment; provided, however, that this does not apply when the absorption-type merger is unlikely to harm the creditor.

The surviving medical corporation in the absorption-type merger is to succeed to the rights and obligations of the dissolving medical corporation in the absorption-type merger (including the rights and obligations that the relevant medical corporation has based on the permission or other disposition of the administrative agency with respect to the business it conducts).

An absorption-type merger becomes effective when the surviving medical corporation in the absorption-type merger registers the merger at the location of its principal office pursuant to the provisions of a Cabinet Order.

When two or more medical corporations conduct a consolidation-type merger (meaning a merger between two or more medical corporations in which all of the rights and obligations of the medical corporation to be dissolved as a result of the merger must be succeeded to by the medical corporation to be established as a result of the merger; hereinafter the same applies in this Division), the following information are to be stipulated in the consolidation-type merger agreement:

the name and location of the principal office of the medical corporation to be dissolved as a result of the consolidation-type merger (hereinafter referred to as the "medical corporation dissolved in the consolidation-type merger" in this Division);

the purpose, name and location of the principal office of the medical corporation to be established as a result of the consolidation-type merger (hereinafter referred to as the "medical corporation established in the consolidation-type merger" in this Division);

particulars specified in the articles of incorporation or act of endowment of the medical corporation established in the consolidation-type merger; and

beyond the particulars listed in the preceding three items, particulars specified by an Order of the Ministry of Health, Labour and Welfare.

The provisions of Article 58-2 through Article 58-4 apply mutatis mutandis to the case where a medical corporation conducts a consolidation-type merger. In this case, the term "absorption-type merger agreement" in Article 58-2, paragraphs (1) and (3) is replaced with "consolidation-type merger agreement", and the term "surviving medical corporation in the absorption-type merger" in paragraph (4) of the same Article is replaced with "medical corporation established in the consolidation-type merger".

A medical corporation established in the consolidation-type merger is to succeed to the rights and obligations of the medical corporation dissolved in the consolidation-type merger (including the rights and obligations that the relevant medical corporation has based on the permission or other disposition of the administrative agency with respect to the business it conducts).

A consolidation-type merger is to become effective when the medical corporation established in the consolidation-type merger registers the merger at the location of its principal office pursuant to the provisions of a Cabinet Order.

The provisions of Section 2 (excluding Article 44, paragraphs (2), (4) and (5) and Article 46, paragraph (2)) does not apply to the establishment of a medical corporation established in the consolidation-type merger.

A medical corporation (excluding social medical corporations and those specified by an Order of the Ministry of Health, Labour and Welfare; hereinafter the same applies in this Subsection) may conduct an absorption-type split (meaning that all or part of the rights and obligations which a medical corporation has with respect to its business are succeeded to by another medical corporation after the split; hereinafter the same applies in this Division). In this case, an absorption-type split agreement is concluded with the medical corporation that succeeds to all or part of the rights and obligations (hereinafter referred to as the "succeeding medical corporation in the absorption-type split" in this Division) held by the relevant medical corporation with respect to its business.

When a medical corporation conducts an absorption-type split, the following particulars must be stipulated in the absorption-type split agreement:

the names and locations of the principal offices of the medical corporation that conducts the absorption-type split (hereinafter referred to as the "medical corporation conducting the absorption-type split" in this Division) and the succeeding medical corporation in the absorption-type split;

assets, liabilities, employment contracts and other particulars concerning rights and obligations to be succeeded to by the succeeding medical corporation in the absorption-type split from the medical corporation conducting the absorption-type split as a result of the absorption-type split; and

beyond the particulars listed in the preceding two items, particulars specified by an Order of the Ministry of Health, Labour and Welfare.

A medical corporation as an association must obtain the consent of all members of the relevant medical corporation for an absorption-type split agreement.

A medical corporation as a foundation may conduct an absorption-type split only when its act of endowment provides that it may do so.

A medical corporation as a foundation must obtain the consent of two-thirds or more of its directors for an absorption-type split agreement, unless otherwise provided for in its act of endowment.

An absorption-type split does not take effect unless approved by the prefectural governor (in the case where the principal offices of the medical corporation conducting the absorption-type split and the succeeding medical corporation in the absorption-type split are located within the area of two or more prefectures, the governors of all the prefectures where the principal offices of the relevant medical corporation conducting the absorption-type split and the relevant succeeding medical corporation in the absorption-type split are located).

The provisions of Article 55, paragraph (7) apply mutatis mutandis to the approval set forth in the preceding paragraph.

When a medical corporation has obtained the approval set forth in paragraph (4) of the preceding Article, it must prepare an inventory of property and a balance sheet within two weeks from the date of the notice of the approval.

Until the split pertaining to an absorption-type split approved under paragraph (4) of the preceding Article is registered, a medical corporation must keep the inventory of property and balance sheet prepared pursuant to the provisions of the preceding paragraph at its principal office and make them available for inspection upon request from its creditors, pursuant to the provisions of an Order of the Ministry of Health, Labour and Welfare.

A medical corporation, within the period set forth in paragraph (1) of the preceding Article, is to make a public notice to its creditors to the effect that any objection, if any, should be stated within a certain period of time, and must notify each known creditor separately. However, such period is not to be less than two months.

If creditors do not object to the absorption-type split within the period set forth in the preceding paragraph, it is deemed that they have approved the absorption-type split.

When a creditor has made an objection, the medical corporation is to pay or provide reasonable security to the creditor or place reasonable property with a trust company, etc. for the purpose of having the creditor receive payment; provided, however, that this does not apply when the absorption-type split is unlikely to harm the creditor.