Justice Minister Keisuke Suzuki said Tuesday he will seek advice from the Legislative Council on the idea of revising the companies law to fully allow businesses to hold online-only shareholders' meetings.
For better convenience of both companies and shareholders, the government plans to fully legalize online-only shareholders' meetings, which are currently permitted only in exceptional cases under the industrial competitiveness enhancement law based on a decision made during the COVID-19 pandemic.
The companies law stipulates that the venue of a general meeting of shareholders be determined before it is convened. The law does not allow it to be held only online.
The envisioned amendment will also include rules on measures to reduce the risk of canceling a resolution in the event of a communications failure.
The Legislative Council will also discuss a proposed system to allow companies to check information on beneficial shareholders who can effectively exercise voting rights at shareholders' meetings although they are not on the list of shareholders because they typically own shares indirectly.
By enabling companies to inquire about institutional investors behind nominal shareholders, such as trust banks, the government aims to promote dialogue between companies and beneficial shareholders. This is expected to help companies better prepare for unsolicited takeover bids and activist investors.
"In light of changes in the social and economic situations in recent years, it is necessary to consider reviewing the companies law regarding share issuance, shareholders' meetings and corporate governance," the minister said.
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