(Purpose)
Article 1. The purpose of this Law is to provide for the necessary matters as regards joint stock companies for crediting the revaluation reserves to the stated capital as prescribed in the provisions of Article 109 of the Assets Revaluation Law (Law No.110 of 1950).
(Resolution of General Meeting as for Crediting to the Stated Capital)
Article 2. A joint stock company (hereinafter referred to as "company" ) shall, in order to credit the revaluation reserves (meaning the revaluation reserves prescribed in Article 102 of the Assets Revaluation Law;hereinafter the same) to the stated capital, adopt the resolution prescribed in Article 343 of the Commercial Code (Law No.48 of 1899).
(Issuance of New Shares in Case of Crediting to the Stated Capital)
Article 3. In case a company has credited the revaluation reserves to the stated capital, it may issue new shares to the shareholders in proportion to the number of shares owned by them through the resolution under the preceding Article or through the separate resolution prescribed in Article 343 of the Commercial Code. In this case, the total amount of the issue-price of new shares (or, in cases the amount to be paid in by the shareholder out of the issue-price of the new share is determined in accordance with the provision of Article 4 paragraph 1, the amount deducted by the said amount) shall not exceed such amount credited to the stated capital.
2 In the case under the preceding paragraph, matters prescribed in the following items shall be determined by the resolution under the same paragraph:
(1) Whether new shares are those having parvalue or without par-value, the class and the number;
(2) The issue-price of new shares.
3 The provisions of Article 280-(2) of the Commercial Code shall not apply to the case of the issuance of the shares under the provision of paragraph 1.
4 In the case under paragraph 1, a company shall not issue new shares exceeding the total number of shares authorized to be issued by the company.
5 In case of the allotment of the new shares to be issued in accordance with the provision of paragraph 1 to a shareholder, if the number of shares to be allotted has a fraction less than one (1) share, such fraction shall be discarded unless otherwise provided for by the resolution under paragraph 1.
(Amount to be Paid in of New Share)
Article 4. In case of the issuance of the shares under the provision of paragraph 1 of the preceding Article, a company may have the shareholder paid a part of the issue-price of the new share. In this case, the amount is to be paid in (hereinafter referred to as "the amount to be paid in" ) and the date for payment shall be fixed by the resolution of the same paragraph.
2 The amount to be paid in under the preceding paragraph shall not exceed the face value of the share having par-value, if the shares having par-value have been issued by the said company.
(Time of Becoming Shareholder, Etc. in Case There is No Amount to be Paid in for New Share)
Article 5. In cases where the resolution of the issuance of new shares under the provision of Article 3 paragraph 1 has been made, shareholders shall become the shareholders of the new shares from the day of the said resolution with the exception of the case where the amount to be paid in of the new share has been determined in accordance with the provision of paragraph 1 of the preceding Article.
2 The provisions of Article 208 (Validity of Pledge) and Article 209 paragraph 4 (Right of the Registered Pledgee) of the Commercial Code shall apply mutatis mutandis to the share or share certificate which is to be received by the shareholder in accordance with the provision of the preceding paragraph, and the provision of Article 293-(2) paragraph 6 (Notice of Share Dividend, Etc.) of the same Law shall apply mutatis mutandis to the case under the preceding paragraph. In this case, "dividend" mentioned in Article 293-(2) paragraph 6 of the Commercial Code shall read "new shares under Article 5 paragraph 1 of the Law concerning Crediting Revaluation Reserves to the Stated Capital" .
(Notice of the Allotment of New Shares)
Article 6. In cases where the amount to be paid in of new share has been determined in accordance with the provision of Article 4 paragraph 1, the company shall notify the shareholders whether the shares on which they have the right to the allotment are those having par-value or those without par-value, the class and the number, the amount to be paid in and the date for payment as well as the fact that they will lose the right to the allotment unless they subscribe for shares on or before the fixed date.
2 The amount to be paid in for new shares, other than matters prescribed in Article 280-(6) of the Commercial Code, shall be written on the application from of shares in case of subscription for shares prescribed in the preceding paragraph.
3 The provisions of Article 280-(5) paragraphs 2 to 4 inclusive (Notice and Public Notice of the Right to the Allotment of New Shares, Etc.) of the Commercial Code shall apply mutatis mutandis to the case under paragraph 1.
(Paying-in of New Shares)
Article 7. Persons who have subscribed for the shares on or before the fixed date prescribed in paragraph 1 of the preceding Article shall pay the full amount to be paid in of each share on or before the date fixed for the payment thereon.
2 The provisions of Article 280-(9)(Time of Becoming Shareholders, Etc.) of the Commercial Code shall apply mutatis mutandis to the underwriters of new shares who are required to make payment in accordance with the provision of the preceding paragraph.
(Public Offering of New Shares)
Article 8. In cases where the total number of new shares for which subscription has been made on or before the fixed date prescribed in Article 6 paragraph 1 is less than the total number of new shares allotted to the shareholders, the company shall again invite subscription for the shares of the numbed corresponding to such deficiency.
2 A company may invite subscription for new shares of the number corresponding to the total number of the fraction which is discarded in accordance with the provision of Article 3 paragraph 5.
3 In the cases under the preceding two paragraphs, the issue-price of new share shall be determined by the board of directors.
(Transfer of the Right to the Allotment of New Shares)
Article 9. In cases where the amount to be paid in of new shares has been determined in accordance with the provision of Article 4 paragraph 1, the right to the allotment of new shares may be transferred to others.
2 The transfer of the right to the allotment of new shares under the preceding paragraph, without the consent of the company with instrument, may not be set up against the company and third persons other than the company.
(Claim for Distribution of Money by the Shareholders Who Do not Underwrite New Shares)
Article 10. Shareholders who have lost the rights to the allotment of new shares, in accordance with the provision of Article 280-(5) paragraph 4 of the Commercial Code which applies mutatis mutandis in Article 6 paragraph 3, may request the company to distribute the money equivalent to the total amount of the issue-price of new shares which have been invited in accordance with the provision of Article 8 paragraph 1 minus the amount to be paid in, in proportion to the number of new shares allotted;provided, however, that the same shall not apply to the shareholders who have transferred the right to the allotment of such new shares to others in accordance with the provisions of the preceding Article.
(Exception to the Amount of the Stated Capital and for Setting Aside of Capital Surplus)
Article 11. In cases where the amount to be paid in of new shares has been determined in accordance with the provision of Article 4 paragraph 1, as for the said new shares, the amount equivalent to such amount to be paid in out of the issue-price shall be credited to the stated capital.
2 In the case under the preceding paragraph, if the said new shares are those for which invitation of subscription has been made under the provision of Article 8 paragraph 1, the amount not credited to the stated capital out of the issue-price of the new shares shall not be required to be set aside as the capital surplus, notwithstanding the provisions of Article 288-(2) of the Commercial Code.
3 In the case under paragraph 1, if the said shares are those for which invitation of subscription has been made under the provision of Article 8 paragraph 2, the amount not credited to the stated capital out of the issueprice of the new shares shall be set aside as the capital surplus.
4 In cases where the amount to be paid in of new shares has not been determined, if the said new shares are those for which invitation of subscription has been made under the provision of Article 8 paragraph 2, as for such new shares, the full amount of the issue-price shall not be credited to the stated capital. In this case, such amount not credited to the stated capital shall be set aside as the capital surplus.
(Exception to the Computation of Income)
Article 12. The amount not to be credited to the stated capital out of the issue-price of the new shares as prescribed in paragraphs 2 to 4 inclusive of the preceding Article shall not be counted in the gross income in computing the income in each accounting period under the provisions of the Corporation Tax Law (Law No.28 of 1947) or the Local Tax Law (Law No.226 of 1950).
2 In the case of distribution of money to the shareholders who have requested the distribution of money under the provision of Article 10, the amount distributed to them shall not be counted in the business expense in computing the income in each accounting period under the provisions of the Corporation Tax Law or the Local Tax Law.
(Penal Provisions)
Article 13. Directors of a company shall be punished with an administrative five not exceeding three hundred thousand yen (\300,000) in the case coming under any of the following items:
(1) In case they have neglected to give any of the notice or the public notice under the provision of Article 293-(2) paragraph 6 of the Commercial Code which applies mutatis mutandis in Article 5 paragraph 2, or neglected to give any of the notice under the provision of Article 6 paragraph 1 or the public notice under the provision of Article 280-(5) paragraph 2 of the Commercial Code which applies mutatis mutandis in Article 6 paragraph 3 or have given dishonest public or other notice in giving these public or other notices;
(2) In case they have failed to set aside as a capital surplus in contravention of the provision of Article 11 paragraph 3 or 4.