Japan announces new measures for partial redaction of director information

On 16 April 2024, Japan’s Ministry of Justice released an amendment to the Commercial Registration Regulations, taking effect as of 1 October 2024, which will allow certain Kabushiki Kaisha directors to have their residential addresses partially redacted on the corporate registry.

Key Takeaways

• The changes only apply to Kabushiki Kaisha companies and take effect from 1 October 2024
• Applications for partial redaction must accompany an application to update the corporate registry
• The system applies prospectively, so historical residential addresses will continue to be publicly displayed.

Background

The existing legal framework

The Ministry of Justice administers the Commercial Registration Regulations under Article 148 of the Commercial Registrations Act. The Act and Regulations provide for the collection, registration, and display of various information on all forms of corporate entities in Japan, and it is open to any individual to inspect the register.

Currently, any person who is appointed to one of the following corporate positions must register their residential address on this public corporate registry:

Concerns about publishing residential addresses

Fundamentally, the Companies Act, Commercial Registrations Act, and other relevant legislation attempt to strike a balance between the need for commercial and economic transparency, and the interests of individual businesspeople. Yet, as the registry grows more quickly and easily accessible to the public at large, and as Japan focuses more efforts on start-ups and small businesses, there have been increasing concerns about the potential risks in publishing individuals’ residential addresses.

The most common of these concerns focuses on individual rights to privacy. If a representative director’s residential address is publicly available, then it would be open to anyone to (e.g.) attend that individual’s home, send them mail, or otherwise harass them and their family.

This is most typically a concern for representative directors of large public corporations, who are subjected to intense shareholder, media and political scrutiny, or at the fore of other controversy in the public zeitgeist. However, it is also a particular concern for start-ups, small businesses, and satellite offices of foreign companies wishing to establish themselves in the Japanese market, where the line between a business address and a residential address often tends to be more blurred. The new changes are therefore intended to provide support for the establishment of new businesses.

Outline of the new changes

The new measures will take effect on 1 October 2024 and allow for partial redaction of residential addresses on both corporate registry extracts (both current and historical) and the registration information displayed on the “Toukibo” online registry service.

However, partial redaction is only available upon application to representative directors, representative executive officers, and representative liquidators/administrators of a Kabushiki Kaisha company.

Once redacted, the registry will only display the relevant prefecture and administrative ward, as the following example illustrates:

How to apply for a partial redaction

A Kabushiki Kaisha, through its authorized representative, can only apply to the registrar for partial redaction in tandem with a related update to the registry. This could take the form of (e.g.):

• An application to incorporate (i.e. applying for partial redaction at the outset of a company’s creation);
• Appointment of the representative director; or
• A change to the representative director’s residential address.

The requisite documentation will depend upon whether the company is publicly-listed. Publicly listed companies will need to provide documentation evidencing the fact that they are publicly listed. All other companies must provide the following:

1. Documentation evidencing that a contents-certified letter has been addressed to the Company and successfully delivered to its registered address for its company headquarters;
2. A certificate from a relevant government authority verifying the relevant officer’s name and address, such as a residency certificate (Ju-min-hyou); and
3. Particulars of the company’s beneficial ownership (unless the company has already enrolled in the Commercial Registry Office’s “Beneficial Ownership of Legal Persons List”).

Notably, the application process is easier once a company has already successfully implemented a partial redaction. In such circumstances, publicly listed companies will not need to submit any additional documentation, and all other companies need only submit the certificate in Item (2) above.

In contrast, the process for cancelling a partial redaction is a standalone form that can be submitted at any time, and the Registrar may otherwise choose to cancel a partial redaction if satisfied that the company is no longer located at its registered headquarters.

Considerations before applying for redaction

It is important to note that these new partial redactions will only be available prospectively. That is to say, the corporate registry will still display historical information on corporate officers, including past residential addresses, and it will not be possible for a company to seek partial redaction in respect of this.

Finally, companies should also keep in mind that redacting information from the corporate registry could make it more cumbersome to engage in transactions which require proof of the representative director’s identity, address, and connection to the company. In practice, this is likely to primarily impact applications for financing or credit with financial institutions, and certain forms of real estate transactions.