April 24, 2020
- As the current serious situation caused by the novel coronavirus disease (COVID-19) is expected to continue for some time, significant delays are highly likely to occur in account settlements and audits of companies whose business year ends in March, with the possibility that some of them may postpone the announcement of financial results.
- It is necessary to give due consideration to the health and safety of the personnel who engage in the account settlement works and the operation of shareholder meetings. Now is the time that top management must make business decisions with medium- to long-term company growth in mind. Companies should avoid making hasty decisions that could result in adverse effects on business operations as a whole.
- Companies should adopt schedules and methods different from those in the past for shareholder meetings, which are an annual general meeting of shareholders (AGM) to be held at the end of June, including the postponement and the holding of the “following meeting”.
- Shareholders and investors should understand the circumstances where an AGM will be held by schedules and methods different from those in the past as a result of companies' efforts to secure proper accounting work and employees' safety.
- The Ministry of Economy, Trade and Industry will offer utmost support regarding the abovementioned circumstances and company efforts.
*Notes on Japanese Companies Act and company practices
Japanese Companies Act Article 296 provides that annual shareholders meetings must be called within a defined period of time after the end of each business year, but does not specify a specific deadline. Article 124 provides that a stock company may prescribe a Record Date and prescribe shareholders that may exercise their rights within three months. It is common for Japanese companies to set their record date as the date of account closing, which is typically March 31st. Therefore, many companies plan to hold their annual shareholders meetings by the end of June.
Divisions in Charge
Corporate Accounting, Disclosure and CSR Policy Office, Economic and Industrial Policy Bureau