Filing a shareholder proposal in Japan

This country factsheet provides an overview of the key legal and technical processes related to filing a shareholder proposal in Japan. Seven additional country factsheets are available, covering Australia,, Canada, France, Germany, South Africa, the UK and the US.

For more information on how to use shareholder proposals to effect positive change at investee companies, read our guide to filing impactful shareholder proposals.

The information on regulatory requirements in this guidance is correct as of 2022.

Overview of key legal and technical processes in Japan
Key legislation	Companies Act (2005) 303(2) and 295(2)
Right to file Can a shareholder propose an issue to be included and voted upon at a general meeting?	Yes. However, limited to issues listed on the Companies Act.
Resolution ‘ask’ What power do shareholders have to request a company to take a certain action?	In a Japanese joint stock company with a board of directors, a shareholder proposal can be filed only with respect to the matters that shareholders are entitled to vote on and resolve at a shareholders’ meeting under either the Japanese Companies Act or the company’s articles of incorporation. Any votes in Japan can be categorised into two types: ordinary and special resolutions. Shareholder proposals seeking to amend the articles of incorporation of a joint stock company must take the form of a special resolution.
Threshold requirements What level of shareholding is required to file?	Not less than 1/100th of the voting capital, or not less than 300 voting right units (where in many cases 1 unit = 100 shares), unless the articles of incorporation determine a lesser amount. A stock company in Japan can issue shares of different classes that vary the rights of shareholders including voting rights at shareholder meetings. However, it is still rare for Japanese companies to issues classified shares.
Ownership period Are there any rules around how long shares must have been held for?	Shares must be held for a continuous period of at least six months from the record date, unless the articles of incorporation determine a shorter holding period.
Demonstrating ownership What paperwork must proponents provide to demonstrate their holding?	A shareholder must submit a unique form to the broker to get a verification of holding of the company’s shares – form link: annai_kobetu.pdf (jasdec.com)
Filing packet What formal documents are required to submit a proposal and in what form should they be sent?	Draft resolution (less than 400 Japanese characters) and proof of ownership. Documents are typically accepted in written paper form, sent via registered post.
Key filing dates When must the resolution be received by?	Must be submitted no later than eight weeks prior to the day of the AGM, unless a shorter period is prescribed in the articles of incorporation.
Right to reject or appeal? Can companies reject the proposal and is there a formal appeals process?	A company must put a resolution on the ballot if filed in accordance with the company’s articles of incorporation and the legal requirements. A company may only refuse to include a shareholder’s resolution if: it would be ineffective (e.g., because it is inconsistent with the law or the company’s articles of incorporation); or it has been resubmitted within three years of a vote receiving less than 10%. A change to the Companies Act that came into effect on 1 March 2021 means no more than 10 items can be put on the AGM agenda; however, this is unlikely to impact an investor’s ability to have a proposal tabled.
Resubmission Are there are restrictions on resubmitting the proposal in subsequent years if it fails to gather enough support?	Three years if votes were less than 10%.
Withdrawal Can a shareholder withdraw a resolution after it is filed?	Yes.
Representation Is the filer of a shareholder resolution proposal required to attend the AGM?	Recommended. A special resolution can only be passed (when the voting threshold is met) if more than 50% of the voting shareholder base is present.^[1] This can be altered by the articles of incorporation but must be no less than one third.
Voting thresholds What is the voting threshold required for the resolution to pass?	Special resolutions are passed with two-thirds majority vote of the shareholders present at the meeting – or the articles of incorporation may increase this threshold.
After the vote	If a resolution is passed amending the articles, directors have an obligation to comply with Article 355 of the Companies Act (2005) otherwise they face personal liability.
Useful reference documents	ClientEarth (2021), Shareholder climate proposals in Japan Commonwealth Climate and Law Institute (2021), Directors’ Duties Regarding Climate Change in Japan Japan Sustainable Investment Forum (2020), White Paper on Sustainable Investment in Japan

Overview of key legal and technical processes in Japan

Key legislation

Companies Act (2005) 303(2) and 295(2)

Right to file

Can a shareholder propose an issue to be included and voted upon at a general meeting?

Yes. However, limited to issues listed on the Companies Act.

Resolution ‘ask’

What power do shareholders have to request a company to take a certain action?

In a Japanese joint stock company with a board of directors, a shareholder proposal can be filed only with respect to the matters that shareholders are entitled to vote on and resolve at a shareholders’ meeting under either the Japanese Companies Act or the company’s articles of incorporation.

Any votes in Japan can be categorised into two types: ordinary and special resolutions.

Shareholder proposals seeking to amend the articles of incorporation of a joint stock company must take the form of a special resolution.

Threshold requirements

What level of shareholding is required to file?

Not less than 1/100th of the voting capital, or not less than 300 voting right units (where in many cases 1 unit = 100 shares), unless the articles of incorporation determine a lesser amount.

A stock company in Japan can issue shares of different classes that vary the rights of shareholders including voting rights at shareholder meetings. However, it is still rare for Japanese companies to issues classified shares.

Ownership period

Are there any rules around how long shares must have been held for?

Shares must be held for a continuous period of at least six months from the record date, unless the articles of incorporation determine a shorter holding period.

Demonstrating ownership

What paperwork must proponents provide to demonstrate their holding?

A shareholder must submit a unique form to the broker to get a verification of holding of the company’s shares – form link: annai_kobetu.pdf (jasdec.com)

Filing packet

What formal documents are required to submit a proposal and in what form should they be sent?

Draft resolution (less than 400 Japanese characters) and proof of ownership.

Documents are typically accepted in written paper form, sent via registered post.

Key filing dates

When must the resolution be received by?

Must be submitted no later than eight weeks prior to the day of the AGM, unless a shorter period is prescribed in the articles of incorporation.

Right to reject or appeal?

Can companies reject the proposal and is there a formal appeals process?

A company must put a resolution on the ballot if filed in accordance with the company’s articles of incorporation and the legal requirements.

A company may only refuse to include a shareholder’s resolution if:

it would be ineffective (e.g., because it is inconsistent with the law or the company’s articles of incorporation); or
it has been resubmitted within three years of a vote receiving less than 10%.

A change to the Companies Act that came into effect on 1 March 2021 means no more than 10 items can be put on the AGM agenda; however, this is unlikely to impact an investor’s ability to have a proposal tabled.

Resubmission

Are there are restrictions on resubmitting the proposal in subsequent years if it fails to gather enough support?

Three years if votes were less than 10%.

Withdrawal

Can a shareholder withdraw a resolution after it is filed?

Yes.

Representation

Is the filer of a shareholder resolution proposal required to attend the AGM?

Recommended.

A special resolution can only be passed (when the voting threshold is met) if more than 50% of the voting shareholder base is present.^[1] This can be altered by the articles of incorporation but must be no less than one third.

Voting thresholds

What is the voting threshold required for the resolution to pass?

Special resolutions are passed with two-thirds majority vote of the shareholders present at the meeting – or the articles of incorporation may increase this threshold.

After the vote

If a resolution is passed amending the articles, directors have an obligation to comply with Article 355 of the Companies Act (2005) otherwise they face personal liability.

Useful reference documents

ClientEarth (2021), Shareholder climate proposals in Japan

Commonwealth Climate and Law Institute (2021), Directors’ Duties Regarding Climate Change in Japan

Japan Sustainable Investment Forum (2020), White Paper on Sustainable Investment in Japan