Cash-out Transactions and de Facto Dual Class Share Structure under Japanese Companies Act and the Appropriate Legal Protection of Minority Shareholders

This article examines the current legal framework protecting minority shareholders under the Japanese Companies Act, focusing on cash-out transactions and dual-class share structures that grant disproportionate control to certain minority shareholders. It assesses the effectiveness of these protections and proposes reforms. For cash-out transactions, the article suggests company law reforms to restrict the methods of cashing out minority shareholders and limit the scope of such transactions. Regarding dual-class share structures, it proposes that the Japanese Companies Act should be revised to allow public companies to issue multiple voting rights shares only during IPOs and to include necessary safeguards against the risks associated with these shares.