Many Japanese laws have been amended or created over the past few years to allow the use of electromagnetic data. For instance, Japanese laws providing for the authentication of electromagnetic data as well as electromagnetic signatures are now in place. The Securities and Exchange Law of Japan allows disclosure of certain corporate information in electric form. The electromagnetic information amendments to the Commercial Code of Japan, which will take effect on and from April 1 2002, will allow most corporate documents that must be prepared under the Commercial Code to be made and stored in electromagnetic form. Correspondence that is to be sent between a company and its shareholders may also be sent in electromagnetic form.
Under the amendments, most corporate documents may be prepared and stored in electromagnetic form, such as articles of incorporation, various registers, various minutes and accounting documents. If they are prepared electromagnetically, they must be signed electromagnetically and stored at the main office. If an eligible person so requests, the electromagnetic records must be made available and paper copies of the electromagnetic records must be provided. Since it is possible to prepare corporate documents more efficiently using electromagnetic technology, the electromagnetic methods are expected to be adopted relatively quickly.
The amendments also allow most correspondence between a company and its shareholders to be sent using electromagnetic technology. Such correspondence includes various notices from the company to its shareholders, and, from the shareholders to the company, such things as share option execution requests, share conversion requests, representative action requests, share purchase requests and proposal rights in shareholders meetings. Even voting rights in shareholders meetings may be exercised electromagnetically. However, the consent of the counterparty must be obtained in order for any correspondence to be sent electromagnetically. Therefore, on a practical level, a company will likely prepare its correspondence both in electromagnetic and paper form. Due to the likely convenience of the electromagnetic form to both a company and its shareholders, use of electromagnetic correspondence is expected to increase. If electromagnetic correspondence becomes standard practice, then corporate correspondence costs will fall dramatically.
The amendments are also expected to authorize public notice of certain corporate accounting documents, such as the balance sheet, to be given by presenting them on the company website.