CASE
What is "deemed dissolution"?
2014.7 名前なし
A Kabushiki Kaisha is dissolved by a resolution of the general meeting of shareholders. Dissolution is “the company’s decision, with the consent of its shareholders, to cease doing business,” If 12 years have passed since the date of the last registration concerning the company, the company is considered dormant, and the company may be dissolved before the company knows it, even though the company is actually still operating and surviving. This is called “deemed dissolution.
In such “deemed dissolution,” the Minister of Justice first notifies the dormant company in the official gazette that it should notify that it has not discontinued its business within two months, and then the Legal Affairs Bureau notifies the company that the notification has been made. If no notification is received by the company after two months, the company is deemed to have been dissolved and the dissolution is registered ex officio by the registrar.
Purpose of "deemed dissolution" system
The purpose of commercial registration is to make transactions safe and smooth by disclosing important information about the company (company name, location of head office, directors, purpose of business, etc.). In order to maintain this purpose, the representative of the company is obliged to apply for registration. Despite this obligation, a company that has not registered at all for 12 years is considered not to be conducting business. To prevent such a company from being misused in the commercial register or the company itself, and to prevent the safety of transactions from being compromised, a company that has lost its substance is liquidated in the register.
Twelve years passes so fast.
Why is it set for 12 years? The maximum term of office for directors of a Kabushiki Kaisha is 10 years, and upon expiration of the term of office, the company must register another appointment of directors. Therefore, it must be registered at least once every 10 years at the most, and if it has not been registered for 12 years, it means that the registration has been neglected for at least 2 years.
In addition, the aforementioned notification from the Legal Affairs Bureau is made to the location of the head office in the registry, so if the head office is moved or the residential address is changed but the company is not registered, the company cannot receive the notification. Be careful not to overlook companies with many subsidiaries and affiliates.
A company that has been deemed to be dissolved can continue as a Kabushiki Kaisha by special resolution of the shareholders’ meeting only for up to three years thereafter, but complicated registration procedures and fines for failure to register await. Please check the registration status of your company once again and consult us.
