Director Changes in Japan: Legal Compliance Made Simple

In Japan, a director change is not a simple administrative task—it’s a legally defined process under the Companies Act that shapes the foundation of corporate governance. Every appointment, resignation, or removal must follow strict procedural rules to ensure accuracy, transparency, and continuity. When handled correctly, the process not only meets compliance standards but also reinforces shareholder trust and corporate stability.

Understanding the Legal Framework

Before making any change, companies must determine the type of directors they need and the structure of their board. Many appoint a representative director (daihyo-torishimari-yaku) to oversee daily management and legal affairs. Others include outside directors (shagai-torishimari-yaku) to enhance independence and oversight. By law, outside directors cannot hold executive positions or be affiliated with the company or its subsidiaries. Private Kabushiki Kaisha (KK) companies can operate without a board, but if they establish one, it must include at least three directors. Public companies, on the other hand, are required to maintain a board and are encouraged to appoint independent outside directors in line with Japan’s Corporate Governance Code.

Timing and Terms of Appointment

Every director change must have a clearly defined effective date. If the resolution specifies one, the change takes effect accordingly; if not, it becomes effective on the day the resolution is passed. Directors in public companies generally serve two-year terms, while those in private companies can serve up to ten years. To prevent governance gaps, reappointments must be completed before the current term expires.

Making the Decision Official

The process starts with the shareholders’ meeting, where members vote on director appointments, removals, or reappointments. The outcome must be documented in detailed meeting minutes, prepared in line with the Articles of Incorporation (teikan). For companies with a board, directors typically meet quarterly to make major decisions. When all directors agree, and if the Articles permit it, a written resolution may replace an in-person meeting. Every decision should be clear, signed, and stored within the company’s official records.

Filing and Documentation

Once approved, the company must file the change with the Legal Affairs Bureau within two weeks of the resolution date. This filing confirms the director’s appointment or resignation in the commercial register. Delays can result in administrative fines of up to JPY 1,000,000, so prompt filing is essential. To complete the registration, several documents are required, including the Resignation Letter (signed in wet ink), the Acceptance Letter from the incoming director, and copies of shareholder and board resolutions. Companies must also provide proof of identification, address, and a specimen signature for each new director. Wet-ink signatures remain mandatory, as electronic filing for director changes has not yet been adopted.

Adjusting the Company’s Bylaws

Sometimes a director change also requires updates to the Articles of Incorporation. For example, if the new appointment increases the total number of directors beyond the limit in the Articles, the company must amend its bylaws. Similarly, when a new representative director assumes responsibility, the Articles should be updated to reflect this change.

Foreign Nationals and Eligibility

Foreign nationals can serve as directors of Japanese companies even if they do not live in Japan. Residency and citizenship are not required unless the director intends to relocate. However, foreign directors carry the same legal duties, fiduciary responsibilities, and liabilities as their Japanese counterparts.

Responsibilities of Incoming and Outgoing Directors

When a new director takes office, they assume legal authority to represent the company and ensure that governance, reporting, and compliance standards are met. Outgoing directors must finalise all pending matters, return company property, and transfer responsibilities properly. They remain liable for any breaches of duty that occurred during their term.

Deadlines, Penalties, and Practical Implications

The company must complete the registration within two weeks of the decision. Although small delays might occasionally be tolerated, repeated or extended non-compliance risks financial penalties and reputational harm. Timely registration ensures that the company’s public records accurately reflect its management structure and avoids regulatory scrutiny.

What’s Next for Klea

Managing a director change in Japan requires legal precision, prompt filing, and reliable documentation. For more jurisdictional insights, explore our article Dutch AGM Requirements: Deadlines, Rules, and Risks.

Klea transforms entity management by offering centralised governance, automated compliance, and secure collaboration tools. For this reason, businesses seeking efficient global governance can take the following actions:

• Request a Demo – See Klea’s director change management in action.
• Start a Trial – Experience how automation simplifies filings and reduces administrative risk.
• Talk to Our Experts – Get expert advice tailored to your company’s legal structure in Japan.

Company secretarial software solutions are crucial for organisations aiming to maintain structured governance, consistent compliance, and accurate records. With Klea, companies can ensure that every director change is executed efficiently, transparently, and risk-free.

Legal Disclaimer

The information provided on Klea’s website is made available “as is” for informational purposes only. Klea does not provide legal, tax, or financial advice and is not responsible for any actions taken or not taken based on the content found on this website. In no event shall Klea be liable for any loss or damages arising from reliance on the information contained herein.

For specific legal or compliance support tailored to your business needs, please contact Klea directly. Our team provides personalised guidance and expert solutions. Any reliance on general content without direct consultation does not establish any legal responsibility or liability on Klea’s part.