Financial Instruments and Exchange Act
unlisted companies are able to procure fund from general investors in accordance with provisions of the Financial Instruments and Exchange Act
a. fund procurement by issuance of new shares
Regulations of the Financial Instruments and Exchange Act provide provisions depending on the number of invited investors or the invested amount.
The purpose of such provisions is to protect investors and disclose financial status of the fund procuring companies by issuance of shares. For example, in case direct issuance of its own company, there are cases that security notices, security registration statement etc. are necessary to be submitted. Also, in order to operate, there are cases that security reports and half-yearly reports etc. are necessary to be submitted. Depending on the number of invited parties and amounts, there are cases that not required these disclosures, required only summary disclosures or ordinary disclosures.
We will advise and provide services on these procedures under the Financial Instruments and Exchange Act.
b. fund procurement by bond issue
Procedures of bond issue are also regulated by the Financial Instruments and Exchange Act.
c. fund procurement by composition of fund
There is a method to invest to shares of companies procuring fund upon composing funds.
* It should be aware that “valuable securities” means following as well other than share certificates (including the cases that share certificates are not issued);-debenture stock, equity warrant, mortgage certificate, shares of foreign companies, securities displaying options, trust rights, Specified Electronically Registered Monetary Claims, membership rights of limited liability company, rights of partnership agreement under the Civil Law, rights of partnership agreement under the Commercial Law, rights under contracts of association of company with limited liability of investment business, rights under limited liability business contracts, membership rights of incorporated association (there are more to be as “valuable securities.” )
consultations on listings, registrations of over-the-counter company at AIM of London, OTC of U.S.A., Singapore and Korea etc. and such proceedings
We can assist you for listing in markets overseas.
consultations on proceedings of takeover bids and measures to prevent acquisitions including purchase of shell companies, such proceedings, and documentations of large shareholding report
In the modern society, acquisitions between international corporations as well as domestic corporations are conducted. We can provide sound legal services against these issues both to companies making a tender offer and companies taking measures against acquisitions.
advices on and proceedings of registration of financial instruments business
We will provide advices on and do procedures of registration of financial instruments business.
consultations and advices on securities trading that main shareholders should obey
Shareholders are the owners of the companies, therefore there are various regulations. We will consult and give advices thereon.
advices on and proceedings of composition/ operation of fund using special business of qualified institutional investors
In certain cases, financial instruments business can be operated without registration if reports or other requisites are satisfied. It is also possible to procure fund by composing fund by in this system.
consultations and advices on financial instruments and financial trading
We will consult other general matters as well.
We will provide advices on legal issues, law regulations and disputes on, overseas expansion of Japanese corporations, expansion to Japan of overseas corporations, imports/exports, operations of trading, letter of credit transaction, foreign exchange and laws of foreign trading, bill of lading, and others.
- Consultations on disputes on letter of credit (L/C) transactions
- Consultations on uniform customs of L/C
- Consultations on standby credit
- Disputes and other consultations on bill of lading (B/L)
- Documentations and advices on notices, licenses and reports under the foreign exchange law
- Legal consultations, contracting and other legal documentations, negotiations on contributions and investments of Japanese corporations to overseas.
There are a lot of things to be careful and keep in mind in negotiation on contracts with foreign parties due to differences in circumstances behind business transactions such as languages, customs, ways of thinking in business, etc. It is general to document detailed contracts on the assumption of every possibility in case arises disputes.
What is the letter of credit (L/C)?
In transactions, there are two kinds of L/C, one is a documentary L/C (commercial L/C) and the other is a standby credit. Both are written notices indicating that banks will pay a certain amount of money to third parties upon the issuing party’s request once a certain conditions (L/C basis) are satisfied in relation to debts of the issuing party to third parties. The bank’s debts under the L/C is independent from the issuing party’s debts to third parties and the bank is not be able to be asserted against third parties by the issuing party’s defense toward third parties. Therefore, third parties are able to promptly be paid.
The issuing party of a documentary L/C is a purchasing party under an international sale/purchase contract and such of a standby credit is a debtor of contracts other than a lease agreement/service contract etc., and a sale/purchase contract. A “Uniform Customs of L/C” (Uniform Customs and Practice for Documentary Credits), that is a common law in the world of commercial L/C, exists and is actively used in international transactions.
What is the bill of lading (B/L)?
B/L is valuable securities that witnesses truth that marine carriers receive and ship cargoes and commits to deliver the cargoes in exchange of B/L at the designated port. Once B/L is issued, executions and transfers of rights of claim of delivery of cargoes should be present/issued. In case of advance payment of freight charge under the carrier contracts, it is custom to execute and transfer B/L at the time of payment of freight charge. The Commercial Code is applied to B/L of domestic carrier and the Act for International Carriage of Commodities by Sea based on uniform convention of B/L applied to international carrier.
Conditions of cargoes recognized from outside are described in B/L based on Mate’s Receipt (M/R) and Dock Receipt (D/R), and B/L describing defective goods shall not be received under the Uniform Customs. The descriptions of B/L have, unless proven otherwise, probative force that the marine carriers receive cargoes and even in case it is possible to prove that such description is not true, the marine carriers cannot duly assert against the holders of B/L in good faith. In these conditions, circulation of B/L is protected.
What is Inward Direct Investment?
Inward direct investment is conducted by foreign investors.
- to obtain domestic listing shares and its obtaining ratio is more than 10%.
- to obtain domestic non-listing shares/equity from other than foreign investors.
- foreign investors holding one-third of vote rights agree to practically change the purpose of business of domestic corporations.
- loan to domestic corporations and satisfying a certain requirements
- to obtain private note issued by domestic corporations and satisfying a certain requirements. in relation to a certain inward direct investment, notifications under the foreign exchange law are required.
In the past, the amount of investment is extremely low compared with other advanced countries, however it is drastically increasing in recent years along with the active acquisition of share of the Western companies. Direct investment has two aspects; one is “transfer of capital” which means capital flows from wealth countries to deficient countries. And the other is “transfer of superior management resources” meaning not only simply providing capitals but participating in business and taking risks.
Advices on international financial trading, financial trading such as syndicate loan etc. and advices on disputes.
- Documentation of syndicate loan agreements and consultation thereon
- Documentation of cross boarder loan agreements and consultation thereon
- Documentation of finance lease and other lease loan agreements and consultation thereon
- Legal consultations relating to international financing