JAPAN Law and Practice Contributed by: Akira Matsushita and Hideki Ben, Mori Hamada
shareholding ratio shall be calculated by aggregating shares held by the shareholder with any other share - holders with whom the shareholder has agreed to acquire or transfer shares in the company jointly or to exercise the voting or other rights jointly as sharehold- ers of the company. A shareholder that has a special relationship with another shareholder of the company, such as a shareholding relationship, is deemed to be a joint holder with that shareholder. If the shareholding ratio increases or decreases by 1% or more after filing the large-scale shareholding report, the shareholder must file an amendment to the report within five business days from the date of the increase or decrease. However, certain financial institutions are only required to file the large-scale shareholding report twice a month, even if their shareholding ratios and changes in shareholding ratios meet the forego- ing criteria, if they satisfy certain requirements under the FIEA – such as not having the intention to take actions to materially influence the business activities of the company (each such action being a “material proposal”). The rules on large-scale shareholding reports under the FIEA will be amended on 1 May 2026. The amend- ment includes revisions to the scope of what consti- tutes joint holders and the scope of what constitutes a material proposal. For listed companies, shareholders who own shares through custodians do not appear in the shareholder registries of these companies as such custodians are registered in the shareholder registries. A company cannot require its shareholders to disclose their ben- eficial owners of the shares. As discussed in 1.6 Minimum Number of Sharehold- ers , a foreign investor may be required to file a prior notification or post-acquisition notification with the Minister of Finance and the competent minister in accordance with the FEFTA, if they acquire a certain amount of shares of a company in Japan. Under the Antimonopoly Act, if a company with annual domestic sales (aggregated with domestic sales of its group companies) of more than JPY20 billion intends to acquire shares in a target company with annual
domestic sales (aggregated with domestic sales of its subsidiaries) of more than JPY5 billion, and if such acquisition would result in the acquiring company holding more than 20% or 50% of the voting rights in the target company, the acquiring company must file prior notification of the plan of acquisition with the Japan Fair Trade Commission (JFTC) at least 30 days prior to the closing of such acquisition (the wait- ing period may be shortened if the permission of the JFTC is obtained). In addition, certain laws regulating specific business sectors require investors to file a notification with the regulatory authority if they acquire certain amounts of shares in regulated companies. For instance, the Banking Act provides that a shareholder of a bank must file a notification with the Financial Services Agency (FSA) within five business days of the share- holder having a voting rights ratio in the bank exceed 5%; if the voting rights ratio increases or decreases by 1% or more thereafter, such shareholder must file an amendment to the notification. Also, a shareholder that plans to become a shareholder holding 20% or more of the voting rights of the bank must obtain per- mission from the FSA in advance. 4. Cancellation and Buybacks of Shares 4.1 Cancellation Companies can cancel their treasury shares by a reso- lution of their board of directors. 4.2 Buybacks A company can buy back its shares through the mar- ket (including ToSTNeT-3, which is the off-floor trading system of the Tokyo Stock Exchange) or a tender offer by a board resolution, if permitted by the articles of incorporation of the company. Also, a company can buy back its shares from a specific shareholder based on an agreement between the shareholder and the company by an extraordinary resolution at a general shareholders’ meeting. The buyback of shares by the company is restricted to the distributable amount of the company. A buyback of shares that violates such restriction is void, and the
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