What is a share certificate?

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While not all companies issued them, share certificates were sometimes created by companies in Japan when issuing stock.  The certificates acted as physical proof of the ownership of the shares and transfer of a share certificate generally was legally recognized as transfer of the equivalent amount of company stock.

Sometimes, share certificates also had prices printed on them.  However, as the price of stock fluctuates over time, the price printed on the share certificate may not match the actual price of the stock.  A 2001 amendment to the Japanese Commercial Code clarified this fact legally.

However, since 2008, Japan has adopted an electronic share certificate system and paper share certificates are generally no longer used.  Using an electronic system has streamlined the process for companies and shareholders as it reduces the risk of loss or destruction of share certificates.

If you have any questions about starting a business in Japan, please contact our office for a legal consultation.