The Commercial Code (Law No.48 of 1899) shall be partially amended as follows:
In the Contents "Sub-Section II. Directors" shall be amended as "Sub-Section II. Directors and Board of Directors" , "Section IV. Accounts of the Company" amended as "
Section III-2. Issuance of New Shares
Section IV. Accounts of the Company
", " Sub-Section II. Meetings of the Debenture Holders " amended as "
Sub-Section II. Meetings of the Debenture Holders
Sub-Section III. Convertible Debentures,
" " Section VI. Alteration of the Articles of Incorporation " amended as "
Section VI. Alteration of the Articles of Incorporation
Section VI-2. Reduction of Stated Capital
" and " Chapter V. Kabushiki-Goshi-Kaisha (Societe Commandite par Actions) " amended as " Chapter V. Deleted".
In Article 17, "kabushiki-kaisha or kabushiki-goshi-kaisha" shall be amended as "or kabushiki-kaisha" .
In Article 18 paragraph 2 and Article 22, "one thousand yen" shall be amended as "fifty thousand yen" .
In Article 53, "kabushiki-kaisha and kabushiki-goshi-kaisha" and "four kinds" shall respectively be amended as "and kabushiki-kaisha" and "three kinds" .
In Article 56 paragraph 2, "or a kabushiki-goshi-kaisha" shall be deleted and in paragraph 4 of the same Article, "Articles 343 and 467" shall be amended as "and Article 343" .
Articles 58 to 60 inclusive shall be amended as follows:
Article 58. The Court may, if it deems that, for the purpose of maintaining public interests, the continued existence of the company should not be permitted, order its dissolution on the application of the Attorney-General, a shareholder, a creditor or of any other party interested in the following cases:
1. Where the formation and registration of the company were made with any illegal intent;
2. Where the company, without reasonable cause, has failed to commence business within one year after the time when it came into existence or has discontinued its business for a period of one year;
3. Where a member or a director administering the affairs of a company has continued or repeated any act to exceed or abuse the authority conferred upon it by laws and ordinances or the Articles of Incorporation, or any act to violate any article or articles of criminal laws or ordinances after a written demand to discontinue the same has been delivered by the Attorney-General to such person.
In cases where the application mentioned in the preceding paragraph has been made, the Court may, even before an order of dissolution has been issued, appoint a referee or take any other necessary measures for the preservation of the company's property on the application of the Attorney-General, a shareholder, a creditor or of any other party interested or of its own motion.
In Article 64 paragraph 1 item (6) and Article 77 paragraph 1, "or one or more members together with one or more managers... jointly" shall be deleted.
Article 106 and 107 shall be amended as follows:
In Article 122, "a Public Procurator" shall be amended as "the Attorney-General" .
The following one Article shall be added next to Article 134:
Article 134-(2). If liquidators have neglected any duty, such liquidators shall be jointly and severally liable in damages to the company.
If liquidators have been guilty of wrongful intent or of gross negligence in the case mentioned in the preceding paragraph, such liquidators shall be jointly and severally liable in damages to third persons also.
In Article 135, "Article 254 paragraph 2 and Article 266" shall be amended as "Article 254 paragraph 3, and Article 254-(2)" .
In Article 136 paragraph 3, "Article 107" shall be deleted.
Article 166 shall be amended as follows:
Article 166. The promoters shall make and sign Articles of Incorporation in which they shall state the following particulars:
3. The total number of the shares authorized to be issued by the company;
4. If shares having par value are issued, the amount of each share;
5. Statement as to the existence, restriction, or exclusion of the pre-emptive rights of shareholders, or the extension thereof to third persons, applicable with respect to shares authorized at the time of incorporation;
6. The total number of the shares authorized to be issued at the time of incorporation, whether they are shares having par value or shares without par value and the number;
7. If shares without par value are to be issued at the time of incorporation, the minimum issue-price thereof;
8. The seat of the principal office and of each branch office;
9. The manner in which the company is to give its public notices;
10. The full name and permanent residence of each promoter.
The total number of the shares to be issued at the time of incorporation shall not be less than one-fourth of the total number of the shares to be issued by the company.
Public noties by a company shall be given by inserting them in the Official Gazette or in a daily newspaper in which matters relating to current events are published.
In Article 168 paragraph 1 item 5, "the classes of shares to be given therefor" shall be amended as "whether shares to be given therefor are those having par value or those without par value, their classes," and items (1) to (3) inclusive in the same paragraph shall be amended as follows:
1 to 3 inclusive. Deleted.
The following one Article shall be added next to Article 168:
Article 168-(2). Unless provided for by the Articles of Incorporation, the following matters as to the shares to be issued at the time of incorporation shall be determined by the consent of all of the promoters:
1. The class of the shares and the number;
2. The issue-price of the shares;
3. The amount not credited to the stated capital out of the issue-price of the shares without par value.
In Article 170 paragraph 1, "all the shares" and "on each share" shall respectively be amended as "all the shares to be issued at the time of incorporation" and "of the issue-price" .
Article 171 shall be amended as follows:
In Article 172, "on shares" shall be deleted.
In Article 173 paragraphs 1 and 2, "items 4 to 7" shall be deleted and in paragraph 1 of the same Article, "the preceding three Articles" shall be amended as "Article 170 and the preceding Article."
In Article 174, "to be issued at the time of incorporation" shall be added next to "shares."
Article 175 paragraphs 2 and 3 shall be amended as follows:
The application form shall be prepared by the promoters, and shall contain the following particulars:
1. The date at which the Articles of Incorporation have been attested;and the full name of the Notary Public who has attested them;
2. The particulars mentioned in Article 166 paragraph 1;
3. The provisions, if any, as to the period of duration of or reasons for dissolution of the company;
4. The particulars as to and the number of each class of shares, if two or more classes of shares are issued;
5. The provisions as to the distribution of interest prior to the commencement of business, if such have been determined;
6. The provisions as to the amortization of shares out of profits to be distributed to shareholders, if such have been determined;
7. The particulars mentioned in Article 168 paragraph 1;
8. The particulars mentioned in Article 168 (2);
9. Whether shares taken by each promoter are those having par value or those without par value, their class, number and the price at which such shares are to be taken;
10. A bank or a trust company which is to conduct the business of receiving payment and the place where such business is to be conducted;
11. A statement that a subscription for shares may be rescinded in the event the constituent general meeting is not terminated by a fixed date;
12. The full name, permanent residence and place of business of the transfer agent, and/or registrar, if any such have been determined.
A person who intends to subscribe for shares shall also state in the application form the following particulars in addition to the particulars mentioned in paragraph 1:
1. Whether they are shares having par value or shares without par value to be taken by him if both shares are issued;
2. The class of the shares to be taken by him if shares are classified;
3. The issue-price for the shares to be taken by him if shares without par value are issued or if shares having par value are issued above par value.
In Article 177 paragraph 1, "all the shares" and "the payment in full to be made on each share" shall respectively be amended as "all the shares to be issued at the time of incorporation" and "the payment of the issue-price in full to be made," and in paragraph 2 of the same Article, "on shares" shall be deleted, and in paragraph 3 of the same Article, "Article 171 and" shall be deleted.
In Article 178, "on shares" shall be deleted.
Article 180 paragraph 2 shall be amended as follows:
At the constituent general meeting, all resolutions shall be adopted by a two-thirds majority of the votes of those present who have taken shares representing not less than one-half of the total number of the shares which have been taken.
In paragraph 3 of the same Article, "Article 239 paragraphs 3 and 4, Article 240" and "Article 247 to" shall respectively be amended as "Article 239 paragraphs 3 and 5, Article 240 paragraph 2" and "Articles 247,248,250,252."
In Article 181 paragraph 1, "items 4 to 7 inclusive" shall be deleted.
In Article 184 paragraph 1 item 1, "all the shares" shall be amended as "all the shares to be issued at the time of incorporation."
In Article 185 paragraph 1, "items 4 to 7 inclusive" shall be deleted.
In Article 188 paragraph 1, "all the shares" shall be amended as "all the shares to be issued at the time of incorporation" and in paragraph 2 items 1 to 11 inclusive shall be amended as follows:
1. The matters mentioned in Article 166 paragraph 1 items 1 to 5 inclusive and 9;
2. The principal office and each branch office;
3. The matters mentioned in Article 175 paragraph 2 items 3 to 6 inclusive and 12;
4. The matters mentioned in Article 222-(4), if convertible shares are to be issued;
5. The total number of the issued shares, whether they are shares having par value or shares without par value, the class and the number;
6. The amount of the stated capital;
7. The full name and permanent residence of each director and auditor;
8. The full name of the representing director;
9. The provisions as to representation of the company in cases where two or more representing directors are jointly to represent the company.
In Article 189 paragraph 1, "on shares" shall be deleted.
Article 190 paragraph 2 shall be deleted.
Article 192 shall be amended as follows:
Article 192. In case there are shares to be issued at the time of incorporation of the company and not to be taken after the coming into existence of the company, the promoters shall be deemed to have taken such shares jointly. The same shall also apply in cases where a subscription for shares has been rescinded.
In case there are shares upon which payment as mentioned in Article 170 or 177 has not been made after the coming into existence of the company, the promoters shall be jointly and severally liable to make such payment.
The provisions of Article 186 shall apply with the necessary modifications to the cases mentioned in the preceding two paragraphs.
Articles 196 and 197 shall be amended as follows:
Article 196. The provisions of Article 266 paragraph 4 and Articles 267 to 268-(3) inclusive shall apply with the necessary modifications to the promoters.
In Article 198, "in respect of any person who has subscribed for shares on the erroneous assumption that he was a promoter" shall be deleted.
Article 199 shall be amended as follows:
Article 199. The company may issue shares having par value or shares without par value, or both of them.
Article 200 paragraph 1 shall be amended as follows and in paragraph 2 of the same Article, "on shares" shall be deleted:
The liability of a shareholder shall be limited to the price at which he has taken his own shares.
In Article 201 paragraph 2, "on shares" shall be deleted.
In Article 202 paragraph 1, "the shares shall be amended as" the shares having par value; "in paragraph 2 of the same Article," of each share "and" twenty yen "shall respectively be amended as" mentioned in the preceding paragraph "and" five hundred yen,"and the following one paragraph shall be added as paragraph 3 of the same Article:
The issue-price of shares having par value shall not less than the face value thereof.
In Article 203, paragraph 3 shall be deleted and the following one paragraph shall be added as paragraph 1 of the same Article:
Persons who have taken shares jointly are jointly and severaly liable for the payment.
Article 204 paragraph 1 shall be amended as follows:
The transfer of a share shall not be prohibited or restricted even by the provisions of the Articles of Incorporation.
In Article 205 paragraph 2, "and Article 14 paragraph 2" shall amended as "Article 14 paragraph 2 and Article 16 paragraph 1" and paragraph 1 of the same Article shall be amended as follows:
A non-bearer share must be transferred by an indorsement on the share certificate or by the delivery of the certificate with a separate instrument of assignment signed by the person whose name appears on the certificate as the owner.
The following one paragraph shall be added to Article 205:
The possessor of a non-bearer share certificate shall be deemed to be the lawful holder if he establishes his title to the share by means of the instrument of assignment mentioned in paragraph 1. The same shall also apply in cases where the full name of an assignee is not mentioned in such instrument.
In Article 206 paragraph 1, "by an indorsement on the share certificate" shall be deleted and paragraphs 2 and 3 of the same Article shall be amended as follows:
The company may provide by the Articles of Incorporation that it shall have transfer agents. In such case, when the transfer agent has entered the full name and permanent residence of a transferee in a duplicate of the register of shareholders, the entry of a change of holders in the register of shareholders mentioned in the preceding paragraph is deemed to have been made.
In order to register the share certificates, the company may provide by the Articles of Incorporation that it shall have registrars.
In Article 208, "or conversion" shall be amended as "splitting up, conversion, purchase or the issuance of shares made in accordance with the provisions of Article 293-(3) paragraph 2."
In Article 209 paragraph 3, "the preceding Article" shall be amended as "the preceding Article or the preceding paragraph" and the following one paragraph shall be added next to paragraph 2 of the same Article:
The right of the pledgee mentioned in paragraph 1 shall extend to shares to be received by shareholders in accordance with the provisions of Article 293-(2) paragraph 1.
The following one item shall be added to Article 210:
4. Where the shares are to be purchased in accordance with the provisions of Article 245-(2) or 408-(2).
In Article 211, "and item 3" shall be amended as "to item (4) inclusive."
Article 222 shall be amended as follows:
Article 222. The company may issue two or more classes of shares which differ in respect of their particulars as to the distribution of profits, interest or surplus assets, or the amortization of shares by profits.
In the case mentioned in the preceding paragraph, particulars as to each class of shares and their numbers shall be determined by the Articles of Incorporation.
In the case mentioned in paragraph 1, special provisions may be made in respect of each class of shares, as to the taking of new shares, the consolidation or amortization of shares or the allotment of shares by reason of amalgamation, notwithstanding the absence of any provision in the Articles of Incorporation.
The following six Articles shall be added next to Article 222:
Article 222-(2). In cases where the company is to issue two or more classes of shares, it may be provided for by the Articles of Incorporation that any shareholder may demand the conversion of the shares which he has taken into other class of shares. In this case, the conditions of conversion, the particulars as to shares to be issued in consequence of the conversion and the period within which the conversion may be demanded shall be provided.
The number of shares to be issued in consequence of the conversion out of the number of two or more classes of shares determined in accordance with the provisions of paragraph 2 of the preceding Article shall be reserved for the period mentioned in the preceding paragraph.
Article 222-(3). In cases where shares are to be issued in consequence of the conversion, the issue-price of convertible shares shall be that of shares to be issued in consequence of the conversion.
Article 222-(4). In the case mentioned in Article 222-(2) paragraph 1, the following particulars shall be stated in the application form for shares:
1. That a share may be converted into one of another class of shares;
2. The conditions of conversion;
3. The particulars as to the shares to be issued in consequence of the conversion;
4. The period within which a demand for conversion may be made.
Article 222-(5). A person who demands a conversion shall present to the company two copies of a written application together with the share certificate.
The written application mentioned in the preceding paragraph shall contain the number of shares to be converted and the date of the demand and shall be duly signed.
The demand for conversion of shares shall not be made within the period mentioned in Article 224-(2) paragraph 1.
Article 222-(6). The conversion takes effect on the day on which the demand has been made, but as to the distribution of profits or interest, it may be provided for by the Articles of Incorporation that the conversion shall be demand to have been made at the last day or the fiscal period in which the demand has been made or at the last day of the preceding fiscal period.
Article 222-(7). The registration of the alteration in consequence of the conversion of shares as of the last day of every month shall be effected, within two weeks at the seat of the principal office and within three weeks at the seat of each branch office, from the said last day.
In Article 223, "the register of shareholders" shall be amended as "when non-bearer share certificates have been issued, the register of shareholders" , in item 2 of the same Article, "the class and member of shares......" shall be amended as "whether they are shares having par value or shares without par value, the class and the number in respect of shares......" , item 5 of the same Article shall be deleted, and the following two paragraphs shall be added to the same Article:
When share certificates to bearer have been issued, the register of shareholders shall contain whether they are shares having par value or shares without par value, the class, the number, the serial number and the date of issuance.
In the cases mentioned in the preceding two paragraphs, when convertible shares have been issued, the register of shareholders shall also contain the particulars mentioned in Article 222-(4).
The following one Article shall be added next to Article 224:
Article 224-(2). In order to determine the person who exercises the vote, receives dividends or exercises other rights as a shareholder or a pledgee, the company may provide by the Articles of Incorporation to the effect that it shall not alter any entry in the register of shareholders for a specified period or that any shareholder or pledgee whose name appears in the register of shareholders on a specified date shall be deemed to be the shareholder or the pledgee who is entitled to exercise the rights.
The period mentioned in the preceding paragraph shall not exceed sixty days.
The date mentioned in paragraph 1 shall be determined within sixty days prior to the date on which the person may exercise the rights as a shareholder or a pledgee.
The company shall give public notice of the period or date mentioned in paragraph 1 thirty days before, but this shall not apply in cases where such period or date has been designated by the Articles of Incorporation.
In Article 225, items 3 to 6 inclusive shall be amended as follows:
3. The total number of shares to be issued by the company;
4. The amount of each share, if they are shares having par value;
5. In respect to shares which have been issued after the coming into existence of the company, the date of issuance;
6. The particulars as to each class of shares, in cases where there are two or more classes of shares;
7. The particulars mentioned in Article 222-(4), if they are convertible shares.
In Article 226 paragraph 1, "after the company has come into existence" shall be amended as "after the company has come into existence or after the date of payment on new shares" and the following one paragraph shall be added as paragraph 1 of the same Article:
The company shall without delay issue share certificates after it has come into existence or after the date of payment on new shares.
Article 229 shall be amended as follows:
Article 229. The provisions of Article 21 of the Law on Checks shall apply with the necessary modifications in cases where a share certificate is a share certificate to bearer or a share certificate is a non-bearer share certificate and the holder thereof established his right in accordance with the provisions of Article 205 paragraph 2 or 3.
In Section 3 Sub-Section 1, the following one Article shall be added before Article 231:
Article 230-(2). The resolution shall be adopted by a general meeting as to only the matters provided for by this Code or the Articles of Incorporation.
Article 231 shall be amended as follows:
Article 231. The convening of a general meeting of shareholders shall be determined by the board of directors except as otherwise provided for by this Code.
Article 235 paragraph 2 shall be deleted.
Article 236 shall be amended as follows:
In Article 237 paragraph 1, "representing not less than one-tenth of the capital" shall be amended as "who shall hold shares representing not less than three-hundredths of the total number of the issued shares continuously for the last six months," in paragraph 2 of the same Article, "if the directors do not proceed to convene the meeting" shall be amended as "if the notice of convening of the meeting has not been despatched," and paragraph 3 of the same Article shall be amended as follows:
At a general meeting held in accordance with the provisions of the preceding two paragraphs, inspectors may be specially appointed to investigate the affairs of the company and the state of its property.
In Article 239 paragraph 1, "of the shareholders present" shall be amended as "of the shareholders present who shall hold shares representing more than one-half of the total number of the issued shares" and the following one paragraph shall be added next to paragraph 3 of the same Article:
The conferment of the power of representation mentioned in the preceding paragraph shall be made for each general meeting.
Article 240 shall be amended as follows:
Article 240. In respect of all resolutions of a general meeting, the number of shares owned by shareholders who are not entitled to vote shall not be computed in the total number of the issued shares.
In respect of all resolutions of a general meeting, the number of votes which cannot be exercised in accordance with the provisions of paragraph 5 of the preceding Article shall not be computed in the number of the votes of the shareholders present.
The proviso to Article 241 paragraph 1 shall be deleted.
Article 242 shall be amended as follows:
Article 242. In cases where a company issues two or more classes of shares, it may be provided for by the Articles of Incorporation that with respect to shares of preferred class regarding the distribution of profits a shareholder shall not be entitled to vote, but such sharholder shall be entied to vote from the time when the resolution to the effect that he shall not receive the preferred distribution provided for by the Articles of Incorporation has been adopted to the time when the resolution to the effect that he shall receive such distribution has been adopted.
The total number of the shares mentioned in the preceding paragraph shall not exceed onefourth of the total number of the issued shares.
In Article 244 paragraph 2, "and the auditors" shall be deleted.
In Article 245 paragraph 1 item 1 "in part" shall be amended as "of an important part," item 4 of the same paragraph shall be deleted and paragraph 2 of the same Article shall be amended as follows:
The substance of the acts mentioned in the preceding paragraph shall be stated in notices and public notices provided in Article 232.
The following three Articles shall be added next to Article 245:
Article 245-(2). Any shareholder who shall have notified the company in writing, prior to the general meeting of shareholders at which a resolution mentioned in paragraph 1 of the preceding Article is to be made, of his intention to be against any of the acts mentioned in the same paragraph and have been against it at the general meeting may make demand of the company for the payment of the fair value or his shares at which the shares would have been valued but for such resolution. But the same shall not apply in cases where a resolution for dissolution has been adopted simultaneously with the resolution as to the act mentioned in item 1 of paragraph 1 of the same Article.
Article 245-(3). Such demand mentioned in the preceding Article shall, within 20 days after the date on which the resolution was adopted, be made in writing stating whether the shares are those having par value or those without par value, the class and the number.
If the value of such shares is agreed upon between the dissenting shareholder and the company, the company shall make payment of the agreed value within 90 days after the date of such resolution.
If within a period of 60 days after the date on which the resolution was adopted the shareholder and the company do not so agree, then the dissenting shareholder may, within 30 days after the expiration of the 60-day period, file a petition with any Court of competent jurisdiction asking for a finding and determination of the fair value of such shares.
The company shall also make payment of legal interest on such value as determined by the Court after the expiration of the period mentioned in paragraph 2.
The payment of the price of shares shall be made in exchange for share certificates, the transfer of shares become effective upon the payment of the price.
Article 245-(4). The demand of a dissenting shareholder as provided for in Article 245-(2) shall be ineffective when the company has abandoned the act mentioned in Article 245 paragraph 1. The same shall also apply in cases where a dissenting shareholder has failed to make the demand mentioned in the same paragraph within the period mentioned in paragraph 3 of the preceding Article.
In Article 246, "the preceding Article" shall be amended as "Article 245."
In Article 247, "the shareholders, directors or auditors" shall be amended as "the shareholders or directors."
In Article 248 paragraph 1, "within one month" shall be amended as "within three months."
Article 249 shall be amended as follows:
Article 251 shall be amended as follows:
In Article 252, "Article 249" shall be deleted.
In Article 253 paragraph 1, "paragraph 4" shall be amended as "paragraph 5," and in paragraph 2 of the same Article, "and Articles 248 to 250" shall be amended as "Articles 248 and 250."
"Sub-Section II. Directors" shall be amended as "Sub-Section II. Directors and Board of Directors."
The following one paragraph shall be added next to paragraph 1 of Article 254:
The company cannot, even by the Articles of Incorporation, provided that the directors shall be shareholders.
The following one Article shall be added next to Article 254:
Article 254-(2). The directors shall be obliged to obey any law or ordinance and the Articles of Incorporation as well as resolutions adopted at a general meeting and to perform their duties faithfully on behalf of the company.
Article 256 shall be amended as follows:
Article 256. The term of office of directors shall not exceed two years.
The term of office of the first directors shall not exceed one year notwithstanding the provisions of the preceding paragraph.
The provisions of the preceding two paragraphs shall not affect that such terms are extended by the Articles of Incorporation to the termination of the ordinary general meeting convened in respect of the last period for the settlement of accounts comprised in his term of office.
The following three Articles shall be added next to Article 256:
Article 256-(2). As to the resolution for appointing directors, the number of shares owned by the shareholders to be present may be governed by the Articles of Incorporation, but it shall not be decreased to less than one-third of total number of the issued shares.
Article 256-(3). Any shareholder may, in writing, demand of the company not less than five days before the time fixed for convening a general meeting for the election of not less than two directors that such election shall be held by the method of cumulative voting.When the demand mentioned in the preceding paragraph has been made, each shareholder shall, as to the resolution of election, have the same votes, concerning a share as the number of directors to be elected. In such case, each shareholder may give one candidate all his votes or distribute them to not less than two candidates.
In the case mentioned in the preceding paragraph, those candidates receiving the largest number of votes shall be deemed to have been elected as directors.
In the case mentioned in paragraph 1, the president of the general meeting must, prior to the resolution, announce that the demand mentioned in the said paragraph has been made.
The document mentioned in paragraph 1 shall be kept at the principal office until the termination of the general meeting for the inspection by shareholders.
Article 256-(4). The company may provide by the Articles of Incorporation that the election of directors shall not be made in accordance with the cumulative voting. Even in this case, any shareholder or shareholders who hold shares representing not less than one-fourth of the total number of the issued shares may make the demand mentioned in paragraph 1 of the preceding Article.
The following three paragraphs shall be added to Article 257:
The resolution mentioned in the preceding paragraph cannot be adopted unless in accordance with the provisions of Article 343.
If the general meeting of shareholders has rejected the removal of a director, notwithstanding that there has been dishonest acts or any grave fact constituting the contravention of any law or ordinance or of the Articles of Incorporation in connection with the performance of his duties, any shareholder who holds not less than three-hundredths of the total number of the issued shares continuously for the last six months may institute an action for his removal in the Court within thrity days.
The provisions of Article 88 shall apply with the necessary modifications to the case mentioned in the preceding paragraph.
In Article 258 paragraph 2, "an auditor or other" shall be deleted.
Article 259 shall be amended as follows:
Article 259. The meeting of the board of directors shall be convened by each director, but this shall not apply in cases where the board of directors has determined the director who is to convene such meeting.
The following two Articles shall be added next to Article 259:
Article 259-(2). In convening the meeting of the board of directors, the notice to that effect shall be given to each director not less than a week before the time fixed for such meeting, but this does not preclude that shch period may be shortened by the Articles of Incorporation.
Article 259-(3). When the consent of all the directors has been obtained, the meeting of the board of directors may be held without conforming to the procedure of convening.
Article 260 shall be amended as follows:
Article 260. The administration of the affairs of the company shall be decided by the board of directors. The same shall also apply to the appointment and removal of a manager.
The following two Articles shall be added next to Article 260:
Article 260-(2). The resolution of the board of directors shall be adopted by a majority of the directors present who shall constitute in number a majority of the directors, but those conditions may be made severer by the Articles of Incorporation.
The provisions of Article 239 paragraph 5 and Article 240 paragraph 2 shall apply with the necessary modifications to the resolution mentioned in the preceding paragraph.
Article 260-(3). Minutes shall be taken of the proceedings of the meeting of the board of directors.
The minutes shall contain the substance of the course of the proceedings of the meeting and the results thereof, and the directors who were present must sign their names thereto.
Article 261 shall be amended as follows:
Article 261. The company shall determine by the resolution of the board of directors, the particular director who shall represent the company.
In the case mentioned in the preceding paragraph, it may be provided for that two or more representing directors shall jointly represent the company.
The provisions of Article 39 paragraph 2 and Articles 78 and 258 shall apply with the necessary modifications to the representing directors.
The following one Article shall be added next to Article 261:
Article 261-(2). In cases where the company institutes an action against the director or the director against the company, the particular person who has been designated by the board of directors shall represent the company in respect of such action.
A general meeting of shareholders may determine the particular person who shall represent the company notwithstanding the provisions of the preceding paragraph.
Articles 263 to 266 inclusive shall be amended as follows:
Article 263. The directors shall keep at the principal office and at each branch office copies of the Articles of Incorporation and of the minutes of the general meeting of shareholders and the minutes of the meetings of the board of directors, and shall keep the register of shareholders and the register of debentures at the principal office. The directors may keep the register of shareholders or register of debentures, or duplicates thereof at the places of business of the transfer agent, if any has been appointed.
Any shareholder or creditor of the company may, at any time during business hours, inspect or make extracts from the documents mentioned in the preceding paragraph.
Article 264. A director who intends to effect such a transaction as comes under the class of business carried on by the company on his own behalf or for a third person shall show all the material facts in connection with the said transaction at a general meeting of the shareholders and obtain its approval.
The approval mentioned in the preceding paragraph shall be made by a majority of twothirds of the total number of the issued shares.
If a director in contravention of the provisions of paragraph 1 has effected a transaction on his own behalf, a general meeting of shareholders may treat such transaction as effected on behalf of the company.
The right mentioned in the preceding paragraph shall lapse where one year has elapsed from the time of the transaction.
Article 265. When a directer intends to acquire the company's products or other properties by transfer or to transfer his own products or other properties to the company or to receive loans from the company or to effect any transaction with the company on his own behalf or on that of a third person, he shall obtain the approval of the board of directors. In such case, the provisions of Article 108 of the Civil Code shall not apply.
Article 266. In the following cases, directors who have done any of acts of the following cases shall be jointly and severally liable in effecting performance or in damages to the company, in the case of item 1, for the amount which has been distributed illegally, in the case of item 2, for the amount of loans until repayment, or in the cases of items 3 to 5 inclusive, for the amount of any damage caused to the company:
1. Where the proposal for the distribution of profits in contravention of the provisions of Article 290 paragraph 1 has been submitted to a general meeting;
2. Where loans of money to other directors have been made;
3. Where any transaction in contravention of the provisions of Article 264 paragraph 1 has been effected;
4. Where any transaction mentioned in the preceding Article has been effected;
5. Where any act which violates any law or ordinance or the Articles of Incorporation has been done.
In cases where any act mentioned in the preceding paragraph has been done in accordance with the resolution of the board of director, the directors who have assented to such resolution shall be deemed to have done such act.
The directors who have participated in the resolution mentioned in the preceding paragraph and who have not expressed their dissent in the minutes shall be presumed to have assented to such resolution.
The liability of directors mentioned in paragraph 1 cannot be released except by the unanimous consent of all the shareholders.
The liability of directors in respect to the transaction mentioned in item 4 of paragraph 1 may be released by a majority of two-thirds of the total number of the issued shares, notwithstanding the provisions of the preceding paragraph. In this case, the directors shall show all material facts as to such transaction at a general meeting of shareholders.
The following two Articles shall be added next to Article 266:
Article 266-(2). The provisions of paragraph 1 of the preceding Article shall, in the case of item 1 of the same paragraph, not preclude the directors who have effected performance in respect to the amount mentioned in the same paragraph from availing themselves of the right to obtain reimbursement from the shareholders in bad faith.
Article 266-(3). If directors have been guilty of wrongful intent or of gross negligence in respect to the assumption of their duties, they shall be jointly and severally liable in damages to third persons also. The same shall also apply in cases where a false statement has been made in respect to any material particulars of any application forms for shares or debentures, prospectus, documents prescribed in Article 281 or of any detailed statement mentioned in Article 293-(5), or where a false book entry or public notice has been made.
The provisions of Article 266 paragraphs 2 and 3 shall apply with the necessary modifications to the cases mentioned in the preceding paragraph.
Articles 267 and 268 shall be amended as follows:
Article 267. Any shareholder who has held a share continuously for last six months may demand, in writing, of the company for instituting an action to enforce the liability of directors.
In case the company has failed to institute such action within 30 days from the date on which the demand mentioned in the preceding paragraph was made, the shareholder mentioned in the preceding paragraph may institute such action on behalf of the company.
In case irreparable damage may be caused to the company by the expiration of the period provided in the preceding paragraph, the shareholder mentioned in paragraph 1 may immediately institute the action mentioned in the preceding paragraph, notwithstanding the provisions of the preceding two paragraphs.
Article 268. The action to enforce the liability of directors shall be under the exclusive jurisdiction of the district court at the seat of the principal office.
Shareholders or the company may intervene in the action mentioned in the preceding paragraph, but this shall not apply in cases where such intervention would unduly delay the case or be unduly burden on the court facilities.
The shareholders instituting an action mentioned in paragraph 2 of the preceding Article, shall, after having brought an action, notify the case to the company without delay.
The following two Articles shall be added next to Article 268:
Article 268-(2). If, in cases where shareholders who have brought an action mentioned in Article 267 paragraph 2 have won the case, they are to pay the remuneration to lawyers, they may demand of the company for the payment of the reasonable amount within the scope of the amount of such remuneration.
In case the shareholders have lost the case, the shall not be liable in damages to the company, unless they have been guilty of wrongful intent.
The provisions of the preceding two paragraphs shall apply with the necessary modifications to the shareholders who have intervened in the action in accordance with the provisions of paragraph 2 of the preceding Article.
Article 268-(3). If, in cases where an action mentioned in Article 268 paragraph 1 has been brought, the plaintiff and defendant have caused judgement to be rendered by their collusion for the purpose of prejudicing the right of the company which is the subjectmatter of the case, the company or shareholders may lodge protest against the final and binding judgment in compliance with petition for renewal or procedure.
The provisions of the preceding Article shall apply with the necessary modifications to the action mentioned in the preceding paragraph.
In Article 270 paragraph 1, "or rescinding a resolution by which a director has been appointed" shall be amended as "rescinding a resolution by which a director has been appointed, or for removing a director."
Article 272 shall be amended as follows:
Article 272. In case a director does an act which is not within the scope of the objects of the company, or an act against any law or ordinance or the Articles of Incorporation, and thereby there is any fear of doing irreparable damage to the company, the shareholder who has held a share continuously for the last six months may demand of a director for the stoppage of such act on behalf of the company.
In Article 273, "two years" shall be amended as "one year."
Article 274 shall be amended as follows:
Article 274. An auditor may at any time inspect or make extracts from the books, records and documents of accounts, or may call on the directors for a report of accounts.
An auditor may, when it is especially necessary for the purpose of assuming his duties, investigate the affairs of the company and the state of its property.
In Article 275, "any documents" shall be amended as "documents of accounts."
In Article 276 paragraph 1, "a manager" shall be amended as "a manager or any other employees" , and the proviso to the same paragraph of the same Article and paragraphs 2 and 3 of the same Article shall be deleted.
Article 277 shall be amended as follows:
Article 277. If auditors have neglected any of their duties, such auditors shall be jointly and severally liable in damages to the company.
Articles 279 and 280 shall be amended as follows:
Article 280. The provisions of Article 254, Article 256 paragraph 3, Article 257, Article 258, Article 266 paragraph 4, Article 266-(3) and Articles 267 to 270 inclusive shall apply with the necessary modifications to auditors.
The following one Section shall be added next to Article 280:
Section 3-(2) Issuance of New Shares
Article 280-(2). In the case of issuing shares after the incorporation of the company, the following matters except those as provided for by the Articles of Incorporation shall be determined by the boord of directors, unless otherwise provided for by this Code, or unless it is provided for in the Articles of Incorporation that such matters shall be determined by a genenral meeting of shareholders:
1. Whether new shares are those having par value or those without par value, the class and the number;
2. The issue-price of new shares and the date fixed for the payment thereon;
3. The full names of the persons whose contributions are in the form of property other than money, the property forming the subject-matter of such contributions, the value of such property, whether shares to be given therefor are those having par value or those without par value, the class and the number;
4. The amount not credited to the stated capital out of the issue-price of the shares without par value.
Article 280-(3). The price and other terms and conditions of the issuance of shares distributed at any one issuanse shall be uniform as to all shares then being issued, but this shall not apply to an issuance to persons having the preemptive right upon more favourable terms than issued to the general public.
Article 280-(4). The term "pre-emptive rights" shall mean the right of each shareholder holding shares entitled to vote to acquire new shares in the same proportion as he then owns.
Article 280-(5). If there is any person who has a pre-emptive right, such person shall be notified whether the shares on which he has the pre-emptive right are those having par value or those without par value, the class and the number, and to the effect that his rights shall be forfeited, if he fails to subscribe for shares on or before the fixed date.
In cases where the company has issued share certificates to bearer, it shall give public notice of the particulars mentioned in the preceding paragraph.
The notice or public notice mentioned in the preceding two paragraphs shall be given at least 30 days prior to the date mentioned in paragraph 1.
If any person who has the pre-emptive right fails to subscribe for shares on or before the date notwithstanding that the company has given the notice or public notice, he shall forfeit such right.
Article 280-(6). The application form shall be prepared by the directors, and shall contain the following matters:
1. The particulares mentioned in Article 166 paragraph 1 items (2) and (3);
2. The total number of the issued shares, whether they are those having par value or those without par value, the class and the number;and the amount of the stated capital;
3. The particulars mentioned in Article 280-(2);
4. The amount of each share, if new shares are those having par value;
5. The particulars mentioned in Article 175 paragraph 2 items (4) to (6) inclusive, (10) and (12);
6. The particulars as to the existence, restriction, or exclusion of the pre-emptive rights of shareholders, or extension thereof to third persons, applicable with respect to the new shares to be issued.
Article 280-(7). Any person who has subscribed for new shares shall pay the full amount of the issue-price of each share on or before the date fixed for the payment thereon.
Article 280-(8). In case there is any person who makes contributions in the form of property other than money, the directors shall apply to the Court for the appointment of an inspector whose duty it shall be to make investigations regarding the particulars mentioned in Article 280-(2) item (3). But this shall not apply in cases where the number of shares to be given for such person does not exceed one-twentieth of the total number of the issued shares.
In case the Court has recognized the particulars mentioned in the preceding paragraph to be improper after hearing the report from the inspector, it may give necessary alteration to them and inform the directors and persons contributing property other than money of that effect.
In case persons contributing property other than money have objection to the alteration mentioned in the preceding paragraph, they may cancel their subscription for shares.
In case the cancellation mentioned in the preceding paragraph is not made within two weeks after the information, the particulars mentioned in paragraph 1 shall be deemed to have been altered in accordance with such information.
Article 280-(9). Persons having subscribed for new shares, who have made the payment or the delivery of the property other than money, shall become shareholders from the date of such payment or delivery.
In case persons having subscribed for new shares have not made the payment or the delivery of the property other than money on or before the date mentioned in the preceding paragraph, their rights shall be forfeited.
The provisions of the preceding paragraph shall not affect any claim for damages against persons who have subscribed for new shares.
Article 280-(10). If the company issue shares either in contravention of any law or ordinance or of the Articles of Incorporation or in a grossly unfair manner or at a grossly unfair price and there is any fear of shareholders suffering pecuniary disadvantage thereby, such shareholders may demand of the company for the suspension of such issuance.
Article 280-(11). Any person who is in collusion with any director has subscribed for shares at a grossly unfair price shall be liable to pay to the company an amount equivalent to the difference between a fair issue-price and such unfair issue-price.
The provisions of Articles 267 to 268-(3) inclusive shall apply with the necessary modifications to the action for the payment mentioned in the preceding paragraph.
Article 280-(12). After one year has elapsed from the date of the registration of alteration due to the issuance of new shares, no person who has subscribed for new shares may assert the nullity of his subscription by reason of mistake or non-compliance with any of the requirements as to the application form for shares, nor may rescind his subscription on the ground of fraud or coercion. The same shall also apply in cases where he has exercised his right in respect to such shares.
Article 280-(13). In cases where there are shares which have not yet been subscribed for notwithstanding that the registration of alteration due to the issuance of new shares has been made, the directors shall be deemed to have jointly subscribed for such shares. The same shall also apply in cases where the subscription for shares has been rescinded.
The provisions of the preceding paragraph shall not affect any claim for damages against the directors.
Article 280-(14). The provisions of Article 175 paragraphs 1, 3 and 4, Article 176, Article 177 paragraphs 2 and 3, Article 178, Article 189 and Article 190 shall apply with the necessary modifications to the case of the issuance of new shares.
Article 280-(15). The nullity of the issuance of new shares may be asserted only by means of an action within six months from the day of the issuance of new shares.
The action mentioned in the preceding paragraph may be brought only by shareholders or directors.
Article 280-(16). The provisions of Articles 88, Article 105 paragraphs 2 to 4 inclusive, Article 109 and Article 137 shall apply with the necessary modifications to the action mentioned in the preceding Article.
Article 280-(17). When a judgment declaring the nullity of the issuance of new shares has become finally binding, such shares shall be deprived of validity for the future.
In the case mentioned in the preceding paragraph, the company shall without delay give public notice to that effect and to the effect that the share certificates must be surrendered to the company within a fixed period, and shall separately notify to such effect to each of the shareholders and of the pledgees who are entered in the register of shareholders;such period, however, shall not be less than three months.
Article 280-(18). In the case mentioned in paragraph 1 of the preceding Article, the company shall refund to each shareholder of new shares the amount paid by him.
If the amount mentioned in the preceding paragraph is substantially unreasonable in view of the state of the property of the company at the time when the judgment mentioned in paragraph 1 of the preceding Article has become finally binding, the Court may order, on the application of the company or of such shareholder mentioned in the preceding paragraph, the increase or decrease of the amount mentioned in the preceding paragraph.
The provisions of Article 208 and Article 209 paragraphs 1 and 2 shall apply with the necessary modifications to the case mentioned in paragraph 1.
The following one Article shall be added next to Article 284:
Article 284-(2). Except as otherwise provided for by this Code, the stated capital of a company, shall be eqaul to the total amount of the face value of all the issued shares having par value and the total amount of the issue-prices of all the issued shares without par value.
As to the share without par value, an amount not exceeding one-fourth of the issue-price thereof may not be credited to the stated capital;the same shall also apply to an amount which exceeds the minimum issue-price and does not exceed onefourth of the issue-price when shares without par value are to be issued at the time of incorporation.
The following one Article shall be added next to Article 286:
Article 286-(2). If new shares are issued the amount of expenses necessary for such issuance may be entered on the assets side of the balance sheet. In such case, amortization at least equivalent to the amounts so expended shall be effected at each period for the settlement of accounts within three years after the company has issued the new shares.
In Article 288 paragraph 1, "a reserve fund" shall be amended as "an earned surplus," and paragraph 2 of the same Article shall be deleted.
The following one Article shall be added next to Article 288:
Article 288-(2). The amounts mentioned in the following shall be set aside as the capital surplus:
1. When the shares having par value have been issued above their face value, the amount exceeding the face value;
2. Of the issue-price of the shares without par value, the amount not credited to the stated capital;
3. The amount made by deducting the depreciation in value due to revaluation from the appreciation in value due to revaluation of the property in a fiscal period;
4. When the reduced portion of the capital by reduction exceeds the amount needed for the amortization or refundment of the shares and the amount used for making good deficiencies, such amount in excess;
5. When the value of property to succeeded to from a company or companies which ceased to exist in consequence of amalgamation exceeds the amount of the obligations succeded to from such company or companies and the amount refunded to the shareholders of such company or companies, plus the amount of the increased capital of the company which continues to exist after the amalgamation or plus the amount of the stated capital of the company formed by amalgamation, the amount in excess.
Article 289 shall be amended as follows:
Article 289. The reserve fund mentioned in the preceding two Articles shall not be used except for making good deficiencies of the stated capital. But the same shall not apply to the case prescribed in Article 293-(3) paragraph 1.
A capital surplus shall not be used for making good deficiences of the stated capital unless such deficiencies are not wholly made good with an earned surplus.
In Article 290 paragraph 1, "prescribed in Article 288 paragraph 1" shall be deleted.
In Article 291 paragraph 1, "in the Articles of Incorporation that" shall be amended as "in the Articles of Incorporation that in respect to specified shares" and the proviso shall be deleted, in paragraph 2 of the same Article, "the provisions of the Articles of Incorporation" shall be amended as "the provisions of the Articles of Incorporation and their alteration," in paragraph 3 of the same Article, "six per cent" shall be amended as "six per cent of the total amount of the stated capital per annum," and the following one paragraph shall be added next to paragraph 2 of the same Article:
Of shares to be issued within the period mentioned in paragraph 1, the issue-price of those for which interest is to be distributed, shall not be less than twenty times as much as the annual sum of the interest as provided for in the said paragraph.
Article 292 shall be amended as follows:
The following six Articles shall be added next to Article 293:
Article 293-(2). The company may, through the resolution provided for in Article 343, make the whole or a part of distribution of profits with shares to be issued newly.
The distribution mentioned in the preceding paragraph shall be made at the face value, if such distribution is to be made with shares having par value, and at the issue-price to be determined by the resolution mentioned in the same paragraph, if with shares without pay value.
If the amount of profits to be distributed has a fraction less than the face value or the issue-price, the provisions of paragraph 1 shall not apply to that portion.
The provisions of Article 284-(2) paragraph 2 shall not apply to the shares to be issued in accordance with the provisions of paragraph 1.
A shareholder who has been distributed the dividend in the shape of shares shall be the shareholder of new shares from the day when the general meeting of shareholders at which the resolution mentioned in paragraph 1 has been adopted was terminated.
When the resolution mentioned in paragraph 1 has been adopted, the directors shall without delay notify to the shareholder and the pledgee whose name has been entered in the register of shareholders to receive the distribution mentioned in the same paragraph, whether the shares to be distributed to him are those having par value or those without par value and their classes and number, and in cases where share certificates to bearer have been issued, public notice of the contents of the resolution mentioned in the same paragraph shall be given.
Article 293-(3). The company may credit the whole or a part of the reserve fund to the stated capital by a resolution of the board of directors.
In the case mentioned in the preceding paragraph, the company may issue new shares to a shareholder in proportion to the number of the shares owned by him;in this case a shareholder shall be the shareholder of new shares from the day when the resolution mentioned in paragraph 1 was adopted.
The provisions of paragraph 6 of the preceeding Article shall apply with the necessary modifications to the case mentioned in the preceding paragraph.
Article 293-(4). The company may split up the shares by a resolution of the board of directors.
The provisions of Articles 377,378 and Articles 379 paragraph 3 shall apply with the necessary modifications in cases where it is necessary to surrender share certificates in the case of the shares being split up.
Article 293-(5). The directors shall cause a detailed statement of the documents mentioned in Article 281 to be made within four months from each period for the settlement of accounts and to be kept at the principal office and at each branch office.
The statement mentioned in the preceding paragraph shall state the operation of the company and the state of its property for the previous period for the settlement of accounts, in reasonable detail, specifying the increase or decrease of the stated capital and the reserve fund, all transactions with the directors, auditors and shareholders, the mortgage, the loans of money made if the company is nonfinancial, the acquisition of shares of any company, and the disposition of any fixed assets.
Any shareholder may, at any time during business hours, inspect or make extracts from the statement mentioned in paragraph 1, and may demand delivery of a copy or an abstract copy of such statement, paying such costs as fixed by the company.
Article 293-(6). Any shareholder or shareholders who hold shares representing not less than onetenth of the total number of the issued shares may inspect or make extracts from the books, records and documents of account.
The demand mentioned in the preceding paragraph shall be made in witing with reasons.
Article 293-(7). In cases where the demand under the provisions of the preceding Article has been made, the directors must not refuse the demand of a shareholder unless they establish that there exist proper reasons that the demand is deemed to fall under any of the following cases:
1. Where the inspection or extraction was sought otherwise than to inform the applicant regarding its affairs in connection with the protection or exercise of his statutory rights or was sought in order to harass the management of the business of the company or injure the common interests of the shareholders;
2. Where the applicant is a business competitor, is a member, a shareholder or a director in a business competitor, or is a holder of shares in the company for or on behalf of a business competitor;
3. Where the applicant has the aim of offering for profit to others information obtained through the inspection or extraction of the books, records and other documents or where he has offered for profit to others information obtained through the inspection or extraction of the books, records and other documents of the company or any other company within the previous two years from the day of the demand;
4. Where an unreasonable time was fixed by the shareholders for the inspection or extraction sought.
In Article 294 paragraph 1, "the capital continously for the last three months" shall be amended as "the total number of the issued shares," and in paragraph 3 of the same Article, "auditor" amended as "representing directors" .
Article 296 shall be amended as follows:
Article 296. The company may invite subscriptions for debentures by a resolution of the board of directors.
Article 297 paragraphs 1 and 2 shall be amended as follows:
Subscriptions for debentures shall not be invited more than the total amount of the stated capital and the reserve fund.
If the net amount of the existing property of the company as shown by the last balance sheet is less than the total amount of the stated capital and the reserve fund, subscriptions for debentures shall not be invited more than the net amount of such property.
In Article 301 paragraph 2 item (10), "capital" shall be amended as "stated capital and the reserve fund," and the following one item shall be added to the same paragraph:
16. The full name, permanent residence and place of business of the transfer agent, if any such has been determined.
In Article 305 paragraph 2 item (1), "and 14" shall be amended as "14 and 16."
The following one paragraph shall be added to Article 307:
The provisions of Article 206 paragraph 2 shall apply with the necessary modifications to the transfer of a non-bearer debenture.
In Article 324 paragraph 1, "Article.343 paragraphs 1 to 3 and Article 344 paragraphs 2 and 3" shall be amended as "Article 343."
Article 326 paragraph 2 shall be deleted.
Article 337 paragraph 2 shall be deleted.
In Article 339 paragraph 1, "paragraphs 3 and 4" shall be amended as "paragraphs 3 to 5 inclusive."
The following one Sub-Section shall be added next to Article 341:
Sub-Section 3 Convertible Debentures
Article 341-(2). The company may issue convertible debentures.
In the case mentioned in the preceding paragraph, the conditions of conversion, the particulars as to the share to be issued by the conversion and the period within which a demand for conversion may be made shall be determined by the Articles of Incorporation or by the resolution mentioned in Article 343.
The provisions of Article 222-(2) paragraph 2 shall apply with the necessary modifications to the case mentioned in paragraph 1.
Article 341-(3). With regard to convertible debentures, the following particulars shall be stated in the application form for debentures, the debenture certificates and the register of debentures:
1. That the debenture may be converted into a share or shares;
2. The conditions of conversion;
3. The particulars as to shares to be issued by conversion;
4. The period within which a demand for conversion may be made.
As regards the registration of debentures, the particulars mentioned in the preceding paragraph shall be registered.
Article 341-(4). A person who demands conversion shall present to the company two copies of a written application together with the debenture certificates.
The written application mentioned in the preceding paragraph shall designate the debentures to be converted and state the date of application and shall be duly signed.
Article 341-(5). The provisions of Articles 208,222-(3), Article 222-(5) paragraph 3, Articles 222-(6) and 222-(7) shall apply with the necessary modifications to the case of the conversion of debentures.
Articles 343 and 344 shall be amended as follows:
Article 343. The resolution mentioned in paragraph 1 of the preceding Article shall be adopted by more than two-thirds of the votes of the shareholders present who hold shares representing more than one-half of the total number of the issued shares.
Article 345 paragraph 2 shall be amended as follows:
The resolution of a general meeting of the holders of certain classes of shares shall be adopted by more than two-thirds of the votes of the shareholders present who hold shares representing more than one-half of the total number of the issued shares covering such particular class of shareholders.
In Article 346, "in cases where any resolution mentioned in Article 222 paragraph 2 is adopted and" shall be amended as "in cases where special provisions are to be made in respect of each class of shares in accordance with the provisions of Article 222 paragraph 3."
Articles 347 to 374 inclusive shall be amended as follows:
Article 347. The company shall not increase the total number of its shares so as to exceed four times of the total number of the issued shares.
In cases where the company increases the total capitalization and number of shares to be issued by the company, the existence, restriction, or exclusion of the pre-emptive rights of shareholders with respect to the shares to be issued by such increase or the extension thereof to third persons shall be provided by the Articles of Incorporation.
In respect of the registration of alteration due to the increase of the total number of shares to be issued by the company, the matters mentioned in the preceding paragraph shall be registered.
Articles 348 to 374 inclusive. Deleted.
"Section 6-(2). Reduction of Stated Capital" shall be added next to Article 374 as a section name.
Article 375 shall be amended as follows:
Article 375. The reduction of a stated capital shall be effected by a resolution as provided in Article 343.
The substance of the proposal relating to the reduction of a stated capital shall be stated in notices and public notices provided for in Article 232.
In Article 380 paragraph 1, "the reduction of the capital" shall be amended as "the alteration due to the reduction of the stated capital," in paragraph 2 of the same Article, "an auditor" shall be deleted, and in paragraph 3 of the same Article, "Articles 106,107,109,137 and 249" shall be amended as "Articles 109 and 137" .
In Articles 381 paragraph 1, "an auditor" shall be deleted, "one-tenth of the total amount of the capital of the company continuously for the last three months" shall be amended as "three-hundredths of the total number of the issued shares continuously for the last six months," and paragraph 3 of the same Article shall be deleted.
Article 382 shall be amended as follows:
Article 382. When an order for the institution of a re-organization has been made, the registration of the institution of the reorganization shall forthwith be effected in the Registries which have jurisdiction over the seat of the principal office and of each branch office.
In Article 387 paragraph 1, "the Court has effected" shall be deleted, and "has been effected" shall be added next to "11 of paragraph 1 of the preceding Article," and "it must forthwith commission" shall be amended as "the registration thereof shall forthwith be effected in" and "to effect registration thereof" shall be deleted, and in paragraph 2 of the same Article, "the Court shall forthwith commission the competent authorities to effect its registration" shall be amended as "the registration shall forthwith be effected thereof."
In Article 389 item (2), "Article 193,266,280 or 356" shall be amended as "Article 193 paragraph 1, Article 266,277 or 280-(13)."
In Article 390 paragraph 2, "a bailiff (shittatsuri) or of a police officer" shall be amended as "a bailiff (shikkori), police personnel (keisatsukan) or police personnel (keisatsuriin)."
In Article 398 paragraph 2, "Article 371" shall be amended as "Article 280-(15)."
Article 404 item (3) shall be deleted.
The following one Article shall be added next to Article 406:
Article 406-(2). If, in cases mentioned in the following, there exist unavoidable reasons, any shareholder or shareholders who have owned shares representing not less than one-tenth of the total number of the issued shares may demand the dissolution of the company of the Court:
1. That the company is deadlocked in the management of the corporate affairs, and that irreparable injury to the company is being suffered or is threatened;
2. That the managing or disposing of the company's property is grossly improper and the existence of the company is being in danger thereby.
The provisions of Article 112 paragraph 2 shall apply with the necessary modifications to the case mentioned in the preceding paragraph.
The following one Article shall be added next to Article 408:
Article 408-(2). Any shareholder of the company which is a party to a merger or consolidation who shall have notified in writing to such company, prior to the general meeting of shareholders mentioned in paragraph 1 of the preceding Article, of his intention to be against the agreement of merger or consolidation and have been against approval of such agreement at the general meeting, may make demand of the old company for the payment of the fair value of his shares at which the shares would have been valued but for such resolution of the approval.
The provisions of Article 245-(3) and 245-(4) shall apply with the necessary modifications to the case mentioned in the preceding paragraph.
Article 409 items (1) to (5) inclusive shall be amended as follows:
1. If the company which is to continue to exist increases the total number of shares to be issued by such company due to the amalgamation, the total number of shares to be increased, the class and the number;
2. In respect of new shares to be issued as the result of amalgamation by the company which is to continue to exist, the total number, whether they are shares having par value or shares without par value, the class and the number as well as any other particulars relating to the allotment of the new shares to be given for the shareholders of the company which ceases to exist;
3. The amount of the stated capital and the reserve fund to be increased by the company which is to continue to exist;
4. If any provision has been made as to the amount payable to the shareholders of the company which ceases to exist due to the amalgamation, such provision;
5. The date of the general meeting of shareholders to be held respectively by each company at which the resolution mentioned in Article 408 paragraph 1 is to be adopted;
6. If any provision has been made as to the date on which the amalgamation is to be effected, such provision.
Article 410 items (1) to (4) inclusive shall be amended as follows:
1. In respect of the company to be formed by amalgamation, the matters mentioned in Article 166 paragraph 1 items (1) to (4) inclusive, the class, the number as well as the seat of the principal office, if two or more classes of shares are to be issued;
2. In respect of shares to be issued at the time of amalgamation by the company to be formed by amalgamation, the total number, whether they are shares having par value or shares without par value, the class and the number, and also any other particulars relating to the allotment of shares to be issued to the shareholders of each company;
3. The amount of the stated capital and the reserve fund of the company to be formed by amalgamation;
4. If any provision has been made as to the amount payable to the shareholders of each company, such provision;
5. The particulars mentioned in items (5) and (6) of the preceding Article.
Article 412 paragraph 2 shall be amended as follows:
Any shareholders of the old company who have taken shares to be issued as the result of amalgamation shall have the same right as the shareholders at the general meeting of shareholders mentioned in the preceding paragraph.
In Article 415, "auditor" shall be deleted.
In Article 416 paragraph 1, "and Articles 105 to 111" shall be amended as "Articles 105 and Articles 108 to 111 inclusive."
In Art.425, "in proportion to" shall be amended as "according to."
In Article 426 paragraph 2, "an auditor or of any shareholder who has been holding shares representing not less than one-tenth of the total amount of the capital continuously for the last three months" shall be amended as "any shareholder holding shares representing not less than three-hundredths of the total number of the issued shares continuously for the last six months."
In Article 428 paragraph 2, "director or auditor" shall be amended as "or director."
In Article 430 paragraph 1, "Article 128" shall be deleted and the second paragraph of the same Article shall be amended as follows:
The provisions of Articles 231,237,238, Article 244 paragraph 2, Article 247, Article 254 paragraph 3, Articles 254-(2),258 to 261-(2),263,265 to 272,274 to 276,278,282 to 284 and 293-(5) to 293-(7) shall apply with the necessary modifications to a liquidator.
In Article 431 paragraph 1, "auditor" shall be deleted and in the paragraph 3 of the same Article, "and paragraph 3" shall be deleted.
In Article 442 paragraph 1, "Article 239 paragraph 3" shall be amended as "Article 239 paragraphs 3 and 4."
In Article 452 paragraph 1, "auditor" shall be deleted and "who has been holding shares representing not less than one-tenth of the total amount of the capital continuously for the last three months" shall be amended as "holding shares representing not less than three-hundredths of the total number of the issued shares continuously for the last six months."
In Article 453 item (1), "Articles 193,266,280,356" shall be amended as "Article 193 paragraph 1, Articles 266,277,280-(31)" .
Book II Chapter V shall be amended as follows:
CHAPTER V Deleted
Articles 457 to 478 inclusive. Deleted.
Article 479 shall be amended as follows:
Article 479. If a foreign company intends to engage in commercial transactions as a continuing business in Japan, it shall appoint a representative in Japan and establish an office of business at the residence of such representative or at any other place designated by him.
In the case mentioned in the preceding paragraph, such foreign company shall, in respect to its office of business, make a registration and give a public notice. Such registration and public notice shall be governed by the provisions as to the same registration and the same public notice as a branch office of a company formed in Japan either of the same nature or of the kind which it most closely resembles.
A foreign company shall make due registration of the name of the country of political subdivision thereof, under the laws of which it is organized, the full name and permanent residence of its representative in Japan simultaneously with the registration mentioned in the preceding paragraph.
The provisions of Article 78 shall apply with the necessary modifications to such representative of a foreign company.
In Article 480, "paragraphs 1 and 2 of the preceding Article" shall be amended as "paragraphs 2 and 3 of the preceding Article" .
Article 481 shall be amended as follows:
Article 481. A foreign company shall not engage in commercial transactions as a continuing business in Japan until it has made the registration mentioned in Article 479.
Any preson who has engaged in commercial transactions in contravention of the provisions of the preceding paragraph shall jointly and severally be liable with the company for any commercial transactions handled by him.
In Article 483, "Article 308 and Article 370 paragraph 3" and "branch office" shall respectively be amended as "and Article 308" and "office of business."
Article 484 shall be amended as follows:
Article 484. The Court may order an office of business of a foreign company to be closed on the application of the Attorney-General, a shareholder, a creditor or of any other party interested in the following cases:
1. If the establishment of such office of business was made with any illegal object;
2. If such office of business has failed, without just cause, to commence business within one year of the registration provided for in Article 479, has discontinued business for a period of not less than one year or has, without just cause, suspended payment;
3. If the representative of such foreign company or any other person administering the affairs thereof has continued or repeated any act to exceed or abuse the authority conferred upon it by laws and ordinances or any act to violate any article or articles of the criminal laws or ordinances after a written demand to discontinue the same has been delivered by the Attorney-General to such representative or such person.
The provisions of Article 58 paragraph 2 shall apply with necessary modifications to the case mentioned in the preceding paragraph.
In Article 485 paragraph 1, "or second paragraph" shall be deleted and in paragraph 3 of the same Article, "branch office" shall be amended as "office of business."
The following one Article shall be added next to Article 485:
Article 485-(2). A foreign company shall be deemed to be a company formed in Japan either of the same nature or of the kind which it most closely resembles, insofar as the application of other laws is concerned, but this shall not apply in cases where it is otherwise provided in laws.
In Article 486, "members with unlimited liability administering the affairs of a kabushiki-goshi-kaisha," "or of a kabushiki-goshi-kaisha" and "Article 272 paragraph 1" shall be deleted and "ten thousand yen" shall be amended as "five hundred thousand yen" .
In Article 487, "five thousand yen" shall be amended as "three hundred thousand yen" .
In Article 489, "five thousand yen" shall be amended as "three hundred thousand yen" and in item (1) of the same Article, "all the shares" and "items (4) to (7) or in Article 348 items (2) and (3)" shall respectively be amended as "all the shares to be issued" and "or in Article 280-(2) item (3)" and "or of an increase of capital" and "on shares" shall be deleted.
In Article 490 paragraph 1, "five thousand yen" shall be amended as "three hundred thousand yen" .
In Article 491, "on shares" shall be deleted and "five thousand yen" shall be amended as "three hundred thousand yen" .
The following one Article shall be added next to Article 492:
Article 492-(2). In cases where promoters or directors or acting directors of a kabushikikaisha contemplated in Article 258 paragraph 2 or Article 270 paragraph 1 have issued shares in excess of the total number of the shares to be issued by the company, they shall be liable to imprisonment with hard labor for a term not exceeding five years or to a fine not exceeding three hundred thousand yen.
In Article 493 paragraph 1, "three thousand yen" shall be amended as "two hundred thousand yen" .
In Article 494 paragraph 1, "one thousand yen" shall be amended as "fifty thousand yen" , in item (2) of the same paragraph, "and Chapter V" shall be deleted, "intervention in an action provided for in Article 268 paragraph 2 and Article 280-(11) paragraph 2" shall be added next to "bringing an action" and "one-tenth of the capital" shall be amended as "three-hundredths or one-tenth of the total number of the issued shares" , and in item (3) of the same paragraph, "Article 381 paragraph 1" shall be amended as Articles 272,280-(10) and Article 381 paragraph 1."
In Article 497, "on shares" shall be deleted and "one thousand yen" shall be amended as "fifty thousand yen" .
In Article 498, "transfer agents" shall be added next to "members of committees of inspection," "five thousand yen" shall be amended as "three hundred thousand yen" and "or of a kabushiki-goshi-kaisha" and "Article 272 paragraph 1" shall be deleted, in item (3) of the same Article, "inspection" shall be amended as "inspection or making extracts," in item (9) of the same Article, "Article 301 paragraph 2, Article 350, Article 360 paragraph 1, Article 366 paragraph 1 or Article 460 paragraph 2" shall be amended as "Article 280-(6), Article 222-(4) Article 301 paragraph 2 or Article 341-(3) paragraph 1," item (10) of the same Article shall be amended as "10. Deleted" , in item (15) of the sams Article, "Article 226 paragraph 1, Article 370 paragraph 3" shall be amended as "Article 226 paragraph 2" , in item (19) of the same Article, "or the duplicate thereof" shall be added next to "the register of shareholder" , "or the duplicate thereof" shall be added next to "the register of debentures" and "the list of shareholders" shall be deleted, in the same item, "a detailed statement mentioned in Article 293-(5) paragraph 1" shall be added next to "the books mentioned in Article 32 paragraph 1" , in item (20) of the same Article, "Article 293-(5) paragraph 1" shall be added next to "Article 282 paragraph 1" , in item (21) of the same Article, "Article 288-(2)" shall be added next to "Article 288" , in item (29) of the same Article, "or paragraph 2" shall be deleted, and the following one paragraph shall be added to the same Article:
The provisions of the preceding paragraph shall also apply where a promoter or a director has trasnferred any right arising from the taking of shares.
The following two Articles shall be added next to Article 498:
Article 498-(2). Any person who has engaged in commercial transactions in the name of a company before it comes into existence shall be liable to an administrative penalty of the same sum as that of the registration tax to be imposed at the time of formation of a company.
Article 498-(3). The provisions of the preceding Article shall apply with the necessary modifications to the person who has done acts in contravention of the provisions of Article 481 paragraph 1.
In Article 702 paragraph 2, "or a kabushikigoshi-kaisha" shall be deleted.