CASE
What you need to be aware of after establishing a Kabushiki Kaisha in Japan:
2024.12 Sakurai
We are receiving an increasing number of inquiries from foreigners who have established companies in Japan receiving a notice of a fine for failure to register. To avoid these situations, please be sure to register when any of the following changes occur.
Cases need to register
■Regarding Officers
・Changes in officers (appointment, reappointment (need to register even the same person is reappointed after the term of office expires), resignation, death, etc.)
・Change of name or address of officers
■Changes to Corporation
・Company name
・Purpose of business
・Location of head office or branch offices
・Method of public notice
Other changes, such as when shares are issued or redeemed, when the number or description of shares issued by the company is changed, when the amount of capital is changed, etc.
Registration must be applied within two weeks after the respective change occurs, and violations of this requirement may result in a fine toward the representative as individual. The amount of the fine is stipulated to be no more than 1 million yen, but there is no clear standard and the court will decide it on a case-by-case basis. In cases where a director fails to register for one year after the expiration of his/her term of office, the cost is regularly several tens of thousands of yen.
If the company is not a public company (in principle, a company whose own shares are subject to transfer restrictions), Its term of office of officers can be extended until the conclusion of the ordinary general meeting of shareholders relating to the last fiscal year ending within 10 years after their election at the maximum by its articles of incorporation. However, if you make an officer resign in the middle of his/her term of office, justifiable reason is needed. Officers who are asked to resign without justifiable reason has the right to claim compensation for the remainder of his/her term of office. The term of office should be determined with this risk in mind.
For Kabushiki Kaisha that have been unregistered for 12 years since their last registration, the Legal Affairs Bureau will send a notice inquiring about the status of the company. If the notification that the business has not been discontinued is not made within the time period, the deemed dissolution will be registered ex officio. Even after registration of deemed dissolution, a company may be continued by a special resolution of the shareholders’ meeting only for a period of three years after the registration of deemed resolution. However, it requires a complicated registration procedure and might be subject to a fine for failure to register or failure to appoint.
