JAPAN Law and Practice Contributed by: Hiroshi Mitoma, Tomohiko Iwasaki, Kosuke Hamaguchi and Akira Komatsu, Nagashima Ohno & Tsunematsu
enhanced regulation was introduced in April 2025 for a going private transaction by way of management buyout (MBO) or acquisition by a controlling share - holder, under which a listed company contemplating such going private transaction needs to (i) obtain from the special committee the opinion to the effect that the transaction is fair for general shareholders and (ii) make robust information disclosure about the fairness of the transaction.
ry members must be outside directors. The main role of the audit and supervisory committee is to audit and supervise the execution of the duties of the directors. Nominating and Other Committees Nominating and other committees means a set of a nominating committee, an audit committee and a compensation committee. Each committee consists of three or more directors, and a majority of each com - mittee’s members must be outside directors. The main roles of a nominating committee, an audit committee and a compensation committee are, respectively, to determine the candidates for directors, to audit and supervise the execution of the duties of the manage - ment, and to determine the compensation of each management member. In a company with nominating and other committees, an executive officer is supposed to have the broader authority to decide the execution of the company’s operation as compared to other types of companies. A representative executive officer appointed from among the executive officers by a board of directors represents the company. Amendment to the Companies Act to modify the authorities of each committee is now being discussed. Accounting Auditor In addition, a large-sized company must have an accounting auditor who is expected to audit the accuracy of the company’s financial statements. An accounting auditor must be appointed from among external accounting firms or licensed accountants. A company with an audit and supervisory committee or nominating and other committees is also required to The roles of a shareholder meeting and directors may differ depending on whether or not a company has a board of directors. In the case of a company without a board of directors, a shareholder meeting may adopt any action on behalf of the company, and a director has the broad authority to decide and execute the company’s operation. have an accounting auditor. 2.2 Types of Decisions
2. Corporate Management 2.1 Principal Bodies or Functions
Shareholder Meeting/Directors/Board of Directors All joint stock companies are required to have a shareholder meeting and directors. If a company has a board of directors, it must appoint three or more directors. A listed company is required to have a board of directors. A company may have one of the follow - ing bodies: • a statutory auditor and, as the case may be, a board of statutory auditors; • an audit and supervisory committee; and • nominating and other committees. If a company has any of a board of statutory audi - tors, an audit and supervisory committee or nominat - ing and other committees, it must also have a board of directors. A listed company that is a large-sized company ( daigaisha ), ie, a company that has record - ed on its audited and approved balance sheet for its most recent fiscal year either JPY500 million or more in stated capital, or JPY20 billion or more in liabilities, is required to have one of these bodies. Statutory Auditors The main role of a statutory auditor is to audit the exe - cution of the duties of the directors. A listed company with statutory auditors is required to have a board of statutory auditors. Audit and Supervisory Committee An audit and supervisory committee consists of three or more audit and supervisory members, who are also directors of the company elected as such by its share - holder meeting. A majority of the audit and superviso -
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