JAPAN Law and Practice Contributed by: Junichi Ueda, Etsuko Hara, Nobuto Shirane, Takahiro Hayase, Yutaka Shimoo and Miki Goto, Anderson Mori & Tomotsune
2.2 Procedure and Sanctions in the Event of Non-Compliance If an investor is required to provide prior notifi - cation, the notification should be made from six months to 30 days prior to the intended com - mencement of the investment. The authorities will examine the investment from the perspective of national security and the potential effect of the investment on the domes - tic economy. The authorities may recommend a modification or cancellation of the investment. The investor will still have the discretion to accept or reject the recommendation. However, should the investor reject the recommendation, the authorities can issue a legally binding order for the investment to be modified or suspended. If an investor is required to provide prior notifica - tion but fails to do so, that investor is generally liable to a sentence of imprisonment of up to three years and/or a fine that will be calculat - ed based on the total value of the investment. However, where the investor is a corporation, a sentence of imprisonment is not applied. The authorities also have the power to order the investor to perform all acts necessary to undo an illegal investment, including disposing of any capital the investor acquired as a result of the illegal investment. 2.3 Commitments Required From Foreign Investors There are no typical conditions. However, as pre - viously mentioned in 2.2 Procedure and Sanc- tions in the Event of Non-Compliance , if an investor is required to provide prior notification, the authorities may recommend a modification or cancellation of the investment and – should the investor reject the recommendation – the authorities can issue a legally binding order for the investment to be modified or suspended.
2.4 Right to Appeal An affected investor can challenge a decision of the authority that negatively affects or sus - pends the investment to the higher authorities or in court. The challenge to the higher authorities can be made within three months of the date on which the investor becomes aware of the deci - sion of the authorities and within one year of the date on which the decision of the authorities is made. The challenge in the court can be made to the district court within six months of the date on which the investor becomes aware of the deci - sion of the authorities and within one year of the date on which the decision of the authorities is made. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The most common types of corporate vehicles in Japan are the stock company ( kabushiki kai- sha ) and the membership company ( mochibun kaisha ). A stock company is the vehicle that is typically used. In a stock company, the liability of shareholders is limited to the value of their shares and there is generally no assumption of additional liability by the shareholders to credi - tors of the stock company. In order to establish a stock company, there is no specified minimum amount of share capital or a minimum number of shareholders. There is also generally no limitation on the purposes for which a stock company can be established to the extent it is commercial, and a stock company can be established for more than one purpose. As for membership companies, there are three types in Japan:
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