JAPAN Law and Practice Contributed by: Akira Matsushita and Hideki Ben, Mori Hamada
preceding six months or more – at least 1% of the voting rights of all shareholders in the company or at least 300 votes in the company, may, by submitting a demand to the directors no later than eight weeks prior to the day of a general shareholders’ meeting: • demand that directors of the company present pro- posals submitted by the shareholder as an agenda at the general shareholders’ meeting (Article 303 of the Companies Act); and • demand that the directors describe the summary of the proposals in convocation notices of the general shareholders’ meeting (Article 305 of the Compa- nies Act). The requirement of a holding period does not apply to shareholders of a private company. Under the amend- ed Companies Act implemented in 2022, the number of proposals that each shareholder can demand the directors to provide summaries of in the convocation notice of the shareholders’ meeting is limited to ten. In addition, shareholders attending a general share- holders’ meeting may submit proposals at the general shareholders’ meeting with respect to the matters that are within the purpose of that general shareholders’ meeting (Article 304 of the Companies Act). 2.11 Challenging a Resolution A shareholder may challenge a resolution of a gen- eral shareholders’ meeting by filing an action with the court within three months from the date of that resolu- tion, in the event of any of the following (Article 831 of the Companies Act): • where the calling procedures or the methods of a resolution at the general shareholders’ meeting violate laws and regulations or the articles of incor- poration, or are conducted in a grossly improper manner; • where the contents of the resolution at the general shareholders’ meeting violate the articles of incor- poration; or • where a grossly improper resolution is passed as a result of a person with a special interest in the resolution at the general shareholders’ meeting exercising a voting right.
Even if the calling procedures or the method of resolu- tion of the general shareholders’ meeting are in vio- lation of the applicable laws and regulations or the articles of incorporation, the court may dismiss the claim if it finds that the violations are not serious and will not affect the resolution. 2.12 Institutional Shareholder Groups In Japan, over 300 institutional investors have adopt- ed the Stewardship Code of Japan, which requires institutional investors adopting this code to have con- structive dialogues with their investee companies in order to enhance the corporate value of their inves- tee companies. As a result, institutional investors are becoming more active in having meetings with the listed companies in which they invest, and in discuss- ing their concerns and issues regarding those listed companies. Listed companies learn about such con- cerns and issues from such meetings and may take those into account in their management of the com- panies’ business and operations. Many institutional investors set and disclose their voting policies; such policies may also influence the actions of the listed companies. The shareholding ratio of foreign institu- tional investors in listed companies in Japan has been growing during the last 20 years, and it is now more difficult for such listed companies to ignore the opin- As a general rule, if a person holds shares in listed companies through nominees, the companies must treat those nominees as shareholders. Therefore, that person does not directly have information rights or voting rights, and may have to cause its nominees to exercise such information rights or voting rights. In general, that shareholder also does not have the right to attend shareholders’ meetings of such listed com- panies. However, the National Association of Share- holder Affairs ( Zenkokukabushikikonwakai ), an associ- ation composed of Japanese practitioners, published the “Guideline on Attendance at the General Share- holders’ Meetings of Japanese Listed Companies by Global Institutional Investors”, which explains issues and procedures for allowing those persons to attend such shareholders’ meetings; some listed companies permit those persons to attend them in accordance with the guideline. ions or demands of their investors. 2.13 Holding Through a Nominee
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