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conflicting interest transaction of Japan

conflicting interest transaction of Japan

Today, I have made a minutes for a client.
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Then, now she wants to incorporate a new company B and become a director.
In this case, she needs to obtain of approval for shareholders meeting of company A.
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Because, she has business know-how relating to foreign trade.
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.When she incorporates a new company, there is a possibility that her new company will inflict interest of company A.
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So, she needs to obtain approval of shareholders of company A.
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Called ” Aproval of director’s conflicting interest transaction “
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Please refer to Article 356 of companies act ( Kaisha ho = 会社法 ) of Japan.

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(Restrictions on Competition and Conflicting Interest Transactions)

Article 356 (1) In the following cases, a director shall disclose the material facts on the relevant transactions at a shareholders meeting and obtain approval of the shareholders meeting:

(i) If a directors intends to carry out, for himself/herself or for a third party, any transactions in the line of business of the Stock Company

(ii) If the director intends to carry out any transactions with the Stock Company for himself/herself or for a third party; or

(iii) If a Stock Company intends to guarantee debts of a director or otherwise to carry out any transactions with a person other than the director that results in a conflict of interests between the Stock Company and such director.
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It applies to case where you ( representative director of company A. You are 100% shareholder of company A ) purchases real estate from company A.
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In the case you file registration of ownership transfer from company A to you, you need to prepare minutes of shareholder’s meeting.
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If the company is a company with statutory board of directors, you need to acquire approval of board of directors.
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