Outline of
COMPANY LAW

Status of former YK
 

Change to KK
from YK
 
Merit of
TOKUREI YK
 
Establisment of
New KK
 

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 Current Status of YK
1.TOKUREI YK, or Eceptional YAK
The YK Law was abolished when the new Company Law was put into force, Then, what is happening on the currently existing YKs ? The answer is “Nothing is happening.” It is true that the YK Law was abolished, but a new regulation called “Adjustment Law” or “SEIBI Law” was enforced simultaneously, and the new regulation allows current existing YKs to remain as YKs. (They are called “TOKUREI YK”, or the Exceptional YK hereafter.)  However, even the name of YK are remained on their name, they are all deemed as KK legally under the new Company Law, and they are all incorporated into the KK. Therefore, the words which used to be peculiar to YK are all to be deemed as those of KK now. For example, “Corporate Article of YK” shall be read as “Corporate Article of KK”, “Shain” as “Kabunushi” (meaning shareholders), “Mochibun” as ”Kabushiki” (stock) and “Shusshi one nuit” as “One stock”.
 The YK owners, therefore, do not have to change the current YK Corporate Article or TEIKAN immediately since the Law is automatically deeming and interpreting the old YK terms as new KK ones. (I, however, don’t recommend you to leave the Corporate Article unattended for ever. I recommend to change it to new in the first Annual General Shareholders Meeting after the New Law’s enforcement date so that the legally enforced interpretation above will be no more required.Then, what kind of actions can the owners of YK take now? The owners of YK are having two options. One is to continue as an Exceptional YK keeping the name of YK on his company’s name, and the other choice is to shift to KK by changing the company’s name to KK. The latter choice is a BIG GOOD NEWS for those YK owners who were wishing to change their YK to KK, but could not do it because of the annoying procedures such as an increase of equity, etc. 　The typical YK, like “one director, 3Mil.yen capital and Net Asset less than 10Mil.yen”, now can legally shift to a KK only by conducting the procedure of Change of Company Name. (As a formality, a registration of YK dissolution and a registration of KK establishment are required. But the shift is defined legally as a Change of Company Name under the regulation affiliated to the New Company Law.
 
2. Can YK call itself KK now ?.

The answer is “No”.　They can not call themselves KK immediately after the New Law’s enforcement. Rather, they have to use the name of YK in their company’s name as they were.
Legally, they are deemed as KK, but they are still TOKUREI YK or Exceptional YK.
If you use the KK in your trade name, you will be subject to a legal penalty. (1 Mil. yen or less)
 
3.Is there any change on the office term of Directors?
There is no legally specified office term as it used to be. Directors of YK can remain on the position for good.
When it comes to KK, however, the legal office term of Director is two (2) years, and Auditor is four (4) years basically. Although the KK with a Restriction of Stock Ownership Transfer (Closed Company) can extend the terms to 10 years by stimulating it on the Corporate Article under the New Company Law, they can not make it limitless or without office term.