Shareholder Protection in Close Corporations and the Curious Case of Japan


Shareholder Protection in Close Corporations and the Curious Case of Japan

Room 628, Level 6
Melbourne Law School


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Oppressed, outvoted, and outgunned, minority shareholders have an obvious solution for their woes: vote with their feet, sell their shares, and leave the company. But this ‘Wall Street walk’ is only available to shareholders in public, listed corporations; shareholders in close corporations – privately-owned business entities from which shareholder exit might not be possible – have no market for their shares. Legal solutions which enable the shareholder to voluntarily exit a company with their capital such as the oppression or unfair prejudice remedies in US and Anglo-Commonwealth corporate law – which the speaker defines as ‘withdrawal remedies’ – are therefore vital in close corporations.

However, until relatively recently, shareholders in Japan’s close corporations had no access to withdrawal under the law, as neither of Japan’s then-dominant close corporation forms offered it. By revealing how shareholders in Japan responded to the absence of withdrawal, the speaker shows how Japan’s experience powerfully demonstrates the importance of withdrawal remedies in practice. Withdrawal remedies at law for close corporations became available in Japan for the first time with the watershed Companies Act of 2005, which introduced a new close corporation form, the Gōdō Kaisha (GK). The speaker discusses the various challenges faced by Japan’s new withdrawal regime, and show how comparative corporate law – armed with the law and experience of withdrawal in United States, United Kingdom, and Germany – offers valuable insights for the development of withdrawal in Japan.

This seminar is co-hosted by the Asian Law Centre and the Centre for Corporate Law.


  • Mr Alan  Koh
    Mr Alan Koh, Research Associate