How to hold Shareholders Meeting and Board Meeting in Japan

What is Kabunushi Soukai (Shareholders Meeting)

According to laws, Kabushiki Kaisha(Stock Company) is belong to shareholders, not directors, officers or employees. So important decisions have to be made by Shareholders Meeting (Kabunushi Soukai).

Every Kabushiki Kaisha has to hold Shareholders Meeting at least once a year within two or three months from the end of each fiscal year.

In addition, companies hold shareholders meetings if they needs to make a decision which requires resolution by shareholders meeting but they cannot wait until the next annual meeting.

How to hold shareholders meeting

To hold shareholders meeting, board of directors (or directors in case of companies without board of directors) need to decide (i) the date, (ii) place, (iii) matters to be resolved and (iv) other items.

Then, companies are required to issue invitation to each shareholder by 1 week (in case of non public company) or 2 weeks(in case of public company) prior to the meeting.

In order to make a valid resolution, the quorum and approval rate required by Japanese Companies Act have to be satisfied. The quorum and approval rate varies depending on the matters to be resolved.

For instance, ordinary resolution such as approval of financial statements shall be made by a majority of the votes of the shareholders present at the meeting where the shareholders holding a majority of the votes of shareholders who are entitled to excise their vote are present.

Whereas, Special Resolution such as change of articles of incorporation shall be made by a majority of two thirds or more of the votes of the shareholders present at the meeting where the shareholders holding a majority of the votes of the shareholders entitled to exercise their votes at such shareholders meeting are present.

After shareholders meeting, companies have to make the minutes and keep them for 10 years

What is Torishimariyaku kai (Board Meeting)

Companies with board of directors are required to hold Board Meeting (Torisimariyaku Kai) at least once every three months and the representative director(代表取締役) has to report the performance of its duty in the meeting.

Board meeting can decide almost anything related to the business operation except for the matters which need to be decided by shareholders meeting according to Japanese Companies Act.

Board Meeting in Japan

How to hold Board Meeting

A company has to issue invitation to directors and auditors by 1 week before the board meeting. This one week period can be shortened by writing so in the articles of incorporation.

The resolution of a board of directors meeting shall be made by a majority of the directors present at the meeting where the majority of the directors entitled to participate in the vote are present(*).

*Directors who has special personal interest to the matters to be resolved cannot participate the resolution.

As with the minutes of shareholder meeting, Companies are required to make the minutes of board meeting and keep it for 10 years.