1. Introduction
Many Japanese companies have their fiscal year ending in March; hence, their annual general meetings (AGM) are convened at the end of June. However, due to the COVID-19 pandemic and the government’s declaration of a state of emergency, most companies are requesting shareholders to refrain from attendance in notices or extending such meetings.
In this News, we will mention the considerations for AGMs amid COVID-19.
2. Annual general meetings of shareholders (AGM)
In Japan, Kabushiki-Kaisha (KK) is required to set a gathering of shareholders. At an AGM, companies can resolve the matters stipulated under the Companies Act or any other issues related to their businesses.
Most people may think that an AGM should be convened within three months after the company’s fiscal year-end. However, the current law stipulates that an AGM should be held in a certain period after the company’s fiscal year-end (Article 296 ①, the Companies Act), which does not necessarily require to be held by the end of June. Hence, under the circumstances of the current coronavirus outbreak, companies can defer the timing the meetings and delay reporting financial statements in the following two ways.
1. The company changes the record date and reports financial statements at the deferred AGM.2. The company holds the AGM as scheduled, resolves “continuance” based on Article 317 of the Companies Act, and reports financial statements at the continued meeting.
3. Online shareholders meetings
Article 298 ①-1 of the Companies Act stipulates that companies must fix the “venue” of the AGM. Therefore, under the current law and regulations, an online meeting is feasible as long as companies hold a meeting at a physical location.
4. Conclusion
In this News, we mentioned the considerations for AGMs amid COVID-19. Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
(References)
• Ministry of Economy, Trade and Industry (METI)：Annual General Meeting（Online Meetings）、Considerations for Year-end Closing of Accounts and Auditing (Japanese)（Accessed on June 29, 2020）
• Ministry of Justice：About Convening an AGM（Released on February 28, 2020）
• METI：Q＆A related to Management of an AGM（April 28, 2020, the latest update）
• METI：Guidelines on Approaches to Hybrid Virtual Shareholder Meetings Formulated, released on February 26, 2020）
Query on the phone+81-3-6821-9455