Buying a company in Japan involves selling & purchasing its business by concluding a deal between sellers & buyers. Acquiring companies’ shares in Japan is a transaction in which only a portion of a company’s business is sold.
Typically, purchasing a company in Japan looks like this:
- an NDA is signed;
- DD of a target company, business or assets is carried out;
- an MOU is concluded (optional);
- a final agreement is negotiated & signed.
The timing of the acquisition of a Japanese company may vary & depend on its size, complexity, or structure; however, it usually takes from three to six months for the transfer of shares in large companies to be completed. When a transfer involves a share exchange, business transfer or corporate divestiture, completing the process may require one or two months more.
Japan: Regulation of M&A Deals
The main piece of legislation governing acquisition of companies in Japan is the Companies Law. There’s other acts & regulations that potential purchasers must comply with, of which the three most important ones include
Agreements & other acquisition-related documentation must comply with applicable requirements & be governed by Japanese law. Purchasing shares & concluding business transfer agreements in Japan may be governed by the laws of any jurisdiction; however, more often than not, these agreements are governed by Japanese law.
Japan: Acquiring Ownership
Normally, buyers acquire full ownership of companies shares or assets. If a company issues certificates of shares, then its shares are transferred by issuing share certificates.
The shares of a company that doesn’t issue share certificates are transferred by concluding an agreement between sellers and buyers. Acquiring a company or its assets in Japan is also done by signing an agreement between sellers & buyers; however, the transfer of contracts & obligations requires getting counterparties or creditors’ consent.
Japan: Purchasing Companies’ Shares
Purchasing companies’ shares requires getting shareholders’ consent. Should minority shareholders refuse to sell their stakes, majority stakeholders are legally allowed to force out minority shareholders by repurchasing all their shares. Doing so requires getting the BoD’s approval & notifying minority stakeholders. All in all, the process of forcing out minority stakeholders in Japan can take no more than twenty days.
Should you require any help with any of the procedures referred to in our article, please do not hesitate to contact IQ Decision UK. Our team of qualified experts is always ready to provide advice on acquiring business or shares of Japanese companies. They can also assist you with concluding M&A transactions of any complexity in Japan.