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MJS Tax Economy Institute's Response to Corporate Law Revisions

Recently, MJS Tax Economy Institute's Commercial Law Research Group, affiliated with Miroku Information Service Inc. (MJS), submitted an opinion letter regarding the interim proposal for the revision of corporate laws related to stocks and shareholder meetings to the Ministry of Justice’s Civil Affairs Bureau. This submission comes as part of public comment solicitation from stakeholders.

Background of the Submission

The interim proposal, compiled by the Legal Affairs Council's Corporate Law Division, focuses on several key areas: enhancing flexibility in corporate capital policy, advancing digitalization of shareholder meetings, and revitalizing shareholder relations. Given its wide-ranging impact on various stakeholders—particularly in practical aspects such as how shareholder meetings are conducted—the release of this interim proposal and the subsequent call for public comments were recognized as essential. The Commercial Law Research Group used its expertise in corporate law studies relevant to business practice to develop recommendations, leading to the submission of this opinion letter.

Summary of the Opinion Letter

This opinion letter was developed with the aim of balancing corporate agility, shareholder interests, and the responsiveness to social digitalization and M&A activity. The letter expresses both support and dissent for various proposals outlined in the interim suggestion, along with specialized observations:

Part 1: Stock Issuance

The report supports proposals for the expansion of stock granting systems and free stock distribution to employees while ensuring appropriate procedures for creditor protection and involvement of shareholder meetings, thus facilitating M&A activities and improving practical convenience.

Part 2: Shareholder Meetings

The introduction of fully virtual shareholder meetings, without a physical venue, is endorsed, contingent upon ensuring transparency to prevent arbitrary managerial manipulation. Additionally, the promotion of electronic documents and electronic voting is supported to reduce administrative burdens and enhance shareholder convenience. The letter also deliberates on the prerequisites for shareholder proposals from both misuse prevention and rights protection perspectives.

Part 3: Corporate Governance

Positive opinions are expressed regarding the expansion of limited liability contracts for executive directors to encourage appropriate risk-taking, as well as the rationalization of disclosures in business reports and securities reports.

Link to the Full Opinion Letter

For more details, the complete opinion letter can be accessed here: View the Full Opinion Letter

Comments from MJS Tax Economy Institute

In the opinion letter, MJS Tax Economy Institute emphasizes the necessity of enhancing efficiency and expediency in corporate decision-making while safeguarding existing shareholder interests—taking a cautious approach to overly lax regulatory proposals in pursuit of a balance between these two objectives. As stated by Nobuo Nakamura, Professor at Waseda University and advisor of the Commercial Law Research Group, “We focused on expediting corporate activities and decision-making while ensuring that protections for existing shareholders do not diminish.”

About MJS Tax Economy Institute

Founded in 1999, MJS Tax Economy Institute provides timely information and services in relation to tax reforms, corporate law amendments, and accounting system changes to MJS’s clients. As a think tank of MJS, it conducts research in the areas of taxation, commercial law, accounting, and management, engaging practical experts and academic scholars as advisors and guest researchers.

Commercial Law Research Group

Chaired by Takuya Ishiyama, a lawyer and Dean of O’Hara Graduate School of Accountancy, this group investigates corporate legal affairs, including corporate law, management, and labor relations. In light of continuous amendments to civil, corporate, and labor laws, their findings are systematically organized and publicly released to address ongoing business needs, providing timely information and raising legal awareness among clients, particularly accounting firms and mid-sized enterprises.

About Miroku Information Service (MJS)

Serving approximately 8,400 accounting firms and various mid-sized and small businesses across Japan, MJS offers business systems and knowledge management services centered around financial and tax matters. Currently, about 18,000 mid-sized firms utilize MJS’s ERP systems in addition to around 100,000 business clients benefiting from diverse solution services aimed at management reform and operational improvement.

Contact Information

For inquiries related to this release, please contact:
Miroku Information Service Inc.
President’s Office
Corporate Planning Department
Public Relations & IR Group, Miyagi Ando
Tel: 03-5361-6309
Fax: 03-5360-3430
E-mail: [email protected]