Shareholders Meeting ③: Notice of Covenant

Notice of Covenant for General Meeting of Shareholders

A Covenant process for general meeting of shareholders must be done carefully, since an error made in the procedure may lead the resolution at the meeting to be rescinded, in the worst case. Therefore, it is recommended to keep following points in mind, and to make a schedule of holding a meeting with plenty of time to spare.【 Skip to the conclusion 】

Sender of convocation letter

• Director: In the name of the Representative Director
• Shareholders: If a shareholder is authorized by the court to call the meeting. Please refer to here for details.

Recipient of convocation letter

• In Principle: Shareholders listed in the shareholder registry.
  Please refer to here for details.

• Exception No.1: Shareholders who cannot exercise their voting rights. 

  Ex.)The company itself: Although the company owns its one’s shares, it cannot exercise voting rights at their general meeting.
  Shareholders holding class shares with restricted voting rights

• Exception #2: Shareholders who are unable to give notice; Those for whom notice has not been received for more than 5 years.

Deadline of Notification

• Public companies: 2 or more weeks prior to the date of the meeting
• Private companies: 

  Companies with a board of directors: 1 or more week prior to the date of the meeting.

  Companies without a board of directors: it can be further shortened by stipulating in the articles of incorporation.

  *In the case of adopting voting in writing or by electromagnetic method, 2 or more weeks prior to the date of the meeting.

Method of Notification

• Companies with a Board of Directors: In writing or by electromagnetic method. e.g.) mail or e-mail, etc.
• Companies without a Board of Directors: No regulation. e.g.) e-mail, phone, etc.
• In the case of adopting voting in writing or electromagnetic method: In writing or by electromagnetic method. e.g.) mail or e-mail, etc.

  *In case of using electromagnetic method, prior approval of shareholders is required. i.e.) Whether he/she can receive the email, etc.

Contents of notice

• Companies with a Board of Directors & In the case of adopting voting in writing or electromagnetic method: please refer to here for detail.
• Companies without a Board of Directors No regulation

Conclusion（◔ω◔ * ）

The following is an example of a simplified version of the above provisions.
*Without adopting the method of written or electronic voting method

Private company with Board of Directors

1. Sending covenant notice of Board of Directors meeting
   (In principle: 1 week prior to the date of the meeting)
2. Board of Directors Meeting, deciding on matters to be resolved at the General Meeting, etc.
3. Sending covenant notification which includes date, time, venue and the matters to be resolved at the meeting, etc. by e-mail.
   (Set 1 week later as the date of the meeting)
4. Holding the General Meeting of Shareholders

   *If a shareholder wishes to request an items of agendas (e.g. Election of 1 director) to be added or to be notified of the summary of proposal to other shareholders, such request must be submitted to the directors at least 8 weeks prior to the meeting date.

   * Proposals for items (e.g. “To elect Mr. A as a director of the Company”) can be made on the day of the meeting.

Private companies without Board of Directors

1. Meeting of Directors, deciding on matters to be resolved at the General Meeting, etc. No covenant notice of the meeting is required.
2. Sending covenant notification by email (Set 1 week later as the date of the meeting)
3. Holding the General Meeting of Shareholders

   *Additional items of agenda or proposal can be added on the day of the meeting

MK@ 04/17/2022