JAPAN Law and Practice Contributed by: Hiroshi Mitoma, Tomohiko Iwasaki, Kosuke Hamaguchi and Akira Komatsu, Nagashima Ohno & Tsunematsu
Accordingly, in principle, the risk assumed by share - holders is limited to the equity amount invested in the company. However, in limited circumstances, a doc - trine to pierce the corporate veil exists pursuant to court precedent where the benefit of the corporate form is abused or the existence of the corporate form becomes a mere facade. While there is no publicly available record of the share - holders of a company, a shareholder or a creditor of a company can request inspection of the shareholders register that the company is required to keep under the Companies Act. 4.2 Role of Shareholders Shareholders are not directly involved in the man - agement of a company. Rather, shareholders, in their capacity as members of a shareholder meeting, vote on agenda items presented at the shareholder meet - ing and make resolutions on such proposed matters. In the case of a company with a board of directors, the shareholder meeting only has the power to make resolutions on the matters stipulated by law or stipu - lated in the articles of incorporation. Accordingly, it is not expected that a shareholder meeting will make resolutions regarding the day-to-day management of the company. Once a resolution is passed by a shareholder meet - ing, the directors of the company owe a duty to act in accordance with such a resolution. In the case that a director or a company is to take certain actions that are likely to adversely affect share - holders or the company, under limited circumstances satisfying the criteria stipulated in the Companies Act, a shareholder may demand that the company or director refrain from taking such actions. Additionally, a shareholder may bring a claim against the company or directors as explained in 4.4 Shareholder Claims . For the purpose of monitoring the company’s man - agement, when satisfying the requirements provided under the Companies Act: • a shareholder holding 3% or more of the voting rights may request the court to appoint an inspec - tor for the company’s business;
• a shareholder holding 3% or more of the voting rights may request the disclosure of the accounting books and related documents of the company; and • a shareholder may request, with the court’s permis - sion, the disclosure of the minutes of meetings of the board of directors. A company is required to have an annual shareholder meeting once every fiscal year. At an annual share - holder meeting, the financial statements/business reports are approved or reported and annual divi - dends may be declared. The appointment of directors or statutory auditors may also take place. 4.3 Shareholder Meetings Types of Shareholder Meetings The articles of incorporation usually set forth that the shareholders as of the end of the relevant fiscal year will have voting rights at the annual shareholder meet - ing, and, in such case, this annual shareholder meet - ing is required to be held within three months after the end of the relevant fiscal year. An extraordinary shareholder meeting may be con - vened from time to time. For a company whose shares may be transferred without restriction (including listed companies), the company must set a record date by giving public notice in order to identify the sharehold - ers who may exercise their voting rights at the relevant shareholder meeting. Some listed companies are holding a virtual or semi- virtual shareholder meeting by using web conference systems. Convocation Procedure The convocation of a shareholder meeting by the company is required to be made by a resolution of the board of directors and, in general, a convocation notice is required to be sent out to the shareholders at least two weeks prior to the scheduled date of the shareholder meeting. In the case of a listed company, the required content of the proxy statements for a shareholder meeting is stipulated in the relevant regulations. A listed company is required to provide the proxy statements via elec - tronic means at least three weeks prior to the sched -
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