Shareholders Meeting④ Chairperson and Minutes

Qualifications and Powers of the Chairperson

There aren’t special qualifications required to be a Chairperson at a shareholders’ meeting. (i.e., A shareholder or employee of the Company may act as a Chairman.)

However, it is usually stipulated in the Articles of Incorporation that the representative director present at the meeting (or, if the representative director is unable to attend the meeting, a director previously appointed by the directors) shall act as a Chairperson.

If there isn’t such provision in Articles of Incorporation, a Chairman must be appointed at the beginning of each general shareholders’ meeting.

Role of the Chairperson

Roles of Chairperson is to maintain order in the meeting and to organize the business of the meeting. To be specific, the Chairperson states the next item on the agenda, receives questions from shareholders, designates speakers, urge reports from the officers (directors, auditor, etc.), and, when the sufficient explanations have been exhausted, he/ she put the item to the vote.

The Chairman has an authority to dismiss anyone who disrupts the order of the shareholders’ meeting. On the other hand, he or she cannot arbitrarily exercise such authority (e.g., Preventing a particular shareholder from speaking at the meeting).

Accountability of Directors, etc.

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A director, an accounting advisor, a company auditor or an executive officer are obliged to provide necessary explanations when requested by the shareholders to provide explanations on certain matters at a general meeting of shareholders. However, they are not required to answer questions on matters such as following:

Matters that are unrelated to the agenda
Matters that have already been explained at the meeting
Matters that require a considerable amount of time for research (except when those questions have been submitted in advance by the shareholder or can be easily investigated)
Matters that might be harmful to the common interests of shareholders (e.g., matters related to confidential corporate or personal information)

Those explanation must be sufficient enough for shareholders to make a reasonable judgment on the agenda; hence, it is not necessarily to convince any particular shareholder or all shareholders.

Nevertheless, if directors, etc. fails to provide a sufficient explanation, he or she is legally penalized to civil fine of not more than one million yen and is liable to a fine of up to one million yen. In addition, if a resolution is passed at a shareholders’ meeting without sufficient explanation, there is a possibility that a shareholder will file a lawsuit against the Company to rescind the resolution.

Therefore it is always advisable to be prepared for any questions that shareholders may have.

Obligation to Prepare Minutes of a General Meetings of Shareholders and Matters to be Included

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The obligation to prepare minutes of shareholders’ meetings and the matters to be recorded are stipulated by law (Companies Act, Article 318, Paragraph 1; Article 72 of the Regulations).

Method of preparation

Document or electromagnetic record (PDF, etc.)

Preparer of the minutes

A director (in practice, a representative director)

Matters to be stated

In the case of holding a meeting

Date, start and end time, and venue of the meeting
If any attendees participate via Videoconference system (e.g., Zoom, Teams, etc.), the method of their attendance and statement of confirming the voices of the attendees were immediately transmitted to other attendees and that the attendees are able to express their opinions in a timely and accurate manner as if they were physically gathering together.
Proceedings of the meeting
a. The fact that the Chairperson stated that the general meeting of shareholders was legitimately approved because was attended by a quorum of shareholders.
b. Contents of matters to be reported
c. Contents of matters to be resolved

Results of the proceedings
Number of affirmative votes + Approval or rejection of the resolution
(e.g., “such proposal was unanimously approved and adopted”)
Contents of opinions or statements (e.g., The summary of remarks made during the Q&A session.)
Names of attendees (Directors, Corporate Auditors Executive Officers, Accounting Counsel, Accounting Auditor)
Name of the Chairperson
Name of the director who prepared the minutes

In the case of a resolution in writing (by writing consent of all shareholders)

The details of the matters deemed to have been resolved at (or reported to) the general meeting of shareholders
Name of the person who proposed the above matters
The date on which the resolution (or report) is deemed to have been passed at the general meeting of shareholders
Name of the director who prepared the minutes

Period of Retention:

Retention at the head office: 10 years from the date of the general meeting of shareholders

Retention at branch offices: 5 years from the date of the general meeting of shareholders. (Except when the electromagnetic record of the minutes can be accessed from the branch office)

**Conclusion (*ﾟ▽ﾟ)ﾉ**

Roles of Chairperson is to maintain order in the meeting and to organize the business of the meeting.
Directors and other officers are obliged to provide necessary explanations when requested by the shareholders to provide explanations at a general meeting of shareholders
The Company is obliged to prepare minutes of each general meetings of shareholders (either as paper or PDF) and to shortage the minutes for 10 years at the head office.

MK@ 04/28/2022