Article 2. Definitions
(Compare Articles 53, 211-2, 260 & 280-19 of the former Commercial Code)
In this Law, the meaning of the terminology listed in the items hereunder shall be as provided for in each of the said items:
1. gCorporationsh shall mean kabushiki kaisha (gkkh stock corporation), gomei kaisha (partnership companies) , goshi kaisha (limited partnerships) or godo kaisha (gLLCh limited liability corporations)
2. gForeign corporationsh shall mean shall mean juridical persons established based on the laws and regulations of foreign countries or otherwise are organizations of foreign countries which are the same as corporations or similar to corporations.
3. gSubsidiariesh shall mean a juridical person which is a kabushiki kaisha in which a corporation holds a majority of the voting rights of all the shareholders or otherwise controls the management of a corporation, as provided by the ordinance of the Ministry of Justice (ARTICLE 3. SUBSIDIARIES AND PARENT COMPANIES).
5. gPublic corporationh shall mean a kabushiki kaisha with articles of incorporation that do NOT provide to the effect that the approval of the kabushiki kaisha is required concerning the acquisition of shares acquired based on the transfer of all or part of the issued shares.
6. gLarge corporationsh shall mean kabushiki kaisha which satisfy any of the following requirements:
(a) In the most recent business year having paid up capital of 500 million yen or more in the balance sheet (in the situations provided for in the provisions of the first part of Article 439, meaning the balance sheet reported to the regular annual shareholders meeting based on the provisions of the same Article, meaning the balance sheet of Article 435, paragraph 1 in those situations in the period up to the first regular annual shareholders meeting after the establishment of the corporation.
(b) In the most recent business year, having total liabilities entered in the balances sheet of 20 billion yen or more.
7. gCorporation with Board of Directorsh shall mean a kabushiki kaisha with a board of directors or a kabushiki kaisha in which the establishment of the board of directors is required based on the provisions of this Law.
8. gCorporation with Accounting Refereeh shall mean a corporation in which is established an accounting referee.
9. gCorporation with Statutory Auditorh shall mean a kabushiki kaisha which has a statutory auditor (excluding those with articles of incorporation which purport to restrict the scope of the audit of the statutory auditor to the accounting) or a kabushiki kaisha in which the establishment of a statutory auditor is required based on the provisions of this Law.
10. gCorporation with a Board of Auditorsh shall mean a kabushiki kaisha which has established a Board of Auditors or a kabushiki kaisha in which the establishment of a Board of Auditors is required based on the provisions of this Law.
11. gCorporation with an Accounting Auditorh shall mean a kabushiki kaisha which has an Accounting Auditors or a kabushiki kaisha in which the establishment of an Accounting Auditors is required based on the provisions of this Law.
12. gCorporation with Committeesh shall mean a kabushiki kaisha which has established a nomination committee, an audit committee and a compensation committee (hereinafter gthe committeesh)
13. gCorporation Issuing Classes of Sharesh shall mean a kabushiki kaisha which issues two or more classes of shares which differ as to distribution of surpluses or such other matters as listed in any of the items of Article 108, Paragraph 1.
14. gGeneral Meeting of Holders of Classes of Sharesh shall mean a meeting by classes of shareholders (meaning shareholders who hold the classes of shares in a Corporation Issuing Classes of Shares. Hereinafter the same.)
15. gOutside Directorh shall mean a director of a kabushiki kaisha who is not a director managing the business of the said kabushiki kaisha or the subsidiaries thereof (meaning a kabushiki kaishafs director falling under any of the items of Article 363, paragraph 1 or any other director managing the business of the said kabushiki kaisha. Hereinafter the same) nor an executive, manager or employee, nor a party who in the past has served as a director managing the business of the said kabushiki kaisha or of its subsidiaries, or as an executive, manager or employee thereof.
16. gOutside Statutory Auditorh shall mean a statutory auditor of a corporation that has not served in the past as a director, accounting referee (when the accounting referee is a juridical person, an employee who performed such duties), executive, manager or employee of the said kabushiki kaisha or its subsidiaries,
17. gTransfer Restricted Sharesh shall mean shares for which restrictions have been established with respect to their own transfer, requiring the approval of the kabushiki kaisha for the acquisition thereof, for all or a part of the shares issued by the said kabushiki kaisha.
18. gShares with Redemption Rightsh shall mean shares, constituting all or part of the shares issued by kabushiki kaisha, established with provisions to the effect that the holders thereof can demand the buy back thereof from the said kabushiki kaisha
19. gMandatory Share Purchase Restricted Sharesh shall mean shares, constituting all or part of the shares issued by a kabushiki kaisha, established with provisions to the effect that the said shares can be acquired by the said kabushiki kaisha upon the occurrence of certain fixed events.
20. gUnit Shares Numberh shall mean, in those situations where a kabushiki kaisha has provided in its articles of incorporation to the effect that, with respect to the shares issued by the kabushiki kaisha, a fixed number of shares which can exercise one vote at the shareholders meeting or at the general meeting of holders of classes of shares shall be a unit of shares, then that fixed number.
21. gShare Optionsh shall mean rights against a kabushiki kaisha to receive shares of the said kabushiki kaisha based on the issuance thereof.
22. gBonds with Share Optionsh shall mean corporate bonds with share options.
23. gCorporate Bondsh shall mean monetary rights arising based an allotment made by the corporation based on the provisions of this Law, with the said corporation as an obligor thereto, and which are to be redeemed in accordance with the determinations of the matters listed in the items of Article 676.
24. gMost Recent Business Yearh shall mean the most recent of the business years from among the business years which have received the approval of Article 438, Paragraph 2 (for those situations provided for in the first part of Article 439, the approval of Article 436, paragraph 3) with respect to the accounting documents provided for in Article 435, Paragraph 2, in relation to each business year.
25. gDividend Assetsh shall mean the assets to be distributed in those situations where a kabushiki kaisha is to distribute surpluses.
26. gOrganizational Changesh shall, where a corporation in falls in a or b below, makes changes in its organization making it a corporation of a or b.
a. Kabushiki kaisha, gomei kaisha, goshi kaisha, or godo kaisha (LLC)
b. Gomei kaisha, goshi kaisha, godo kaisha (LLC).
27. gAcquisition Mergerh shall mean a corporation merging with another corporation and all of the rights and obligations of the corporation disappearing based on the merger succeeded to by the corporation continuing in existence after the merger.
28. gNew Establishment Mergerh shall mean two or more corporations merging and the new corporation established by the merger succeeding to all the rights and obligations of the corporations disappearing based on the merger.
29. gAbsorption Type De-mergerh shall mean having all or a part of the rights and obligations of a kabushiki kaisha or godo kaisha (LLC) held in relation to their business, succeeded to by another corporation after de-merger.
30. gCorporate Establishment by Corporate De-mergerh shall mean establishing a corporation based on one or two or more kabushiki kaisha or godo kaisha (LLC) splitting off all or part of the rights and obligations held in relation to their business and the new corporation succeeding thereto.
31. gExchange of Sharesh shall mean having all of the issued and outstanding shares (meaning the shares issued by the kabushiki kaisha. Hereinafter the same) issued by a kabushiki kaisha acquired by another kabushiki kaisha or godo kaisha (LLC)
32. gShare Transferh shall mean having all of the issued and outstanding shares of a one or two or more kabushiki kaisha acquired by a newly established kabushiki kaisha.
33. gMethod of Public Announcementh shall mean the method of public announcement of corporations (including foreign corporations) (excluding those which must be made in the KANPO (Official Gazette) based on the provisions of this Law or other laws).
34. gElectronic Public Announcementh shall mean, from the among the methods of public announcement, electromagnetic methods (methods the electronic data processing organization utilizes or such other methods using data transmission technologies as provided for by Ministry of Justice Ordinance) that are methods provided for in Ministry of Justice Ordinance (ARTICLE 222. ELECTROMAGNETIC METHODS, ARTICLE 223. ELECTROMAGNETIC METHODS FOR MAKING ELECTRONIC PUBLIC ANNOUNCEMENTS)that are measures in a condition such that information the substance of which unspecified and many parties should be notified, can be received.
Disclaimer: This translation is for general reference purposes only and is provided on an gas ish basis with no warranties made whatsoever. Attorney Roderick H. Seeman (licensed in the USA) shall not be responsible for any consequences resulting from the use of this translation. Reliance must be placed on the original Japanese text of the laws. In the text of the translation article headings are added in parenthesis are not in the Japanese language original and are added only for the purposes of enhanced comprehension.
Click here to see a copy of Attorney Seemanfs Japanese stockbrokerfs license that he passed on the first attempt in Japanese (becoming the first qualifying Westerner). The exam is now available in English due to claims that it was too difficult in Japanese.