According to a survey by the National Tax Agency in 2015, 95.7% of companies in Japan are family-owned companies. And in such family companies, the shares are dispersed among the family members due to inheritance and heritage. It is common for disputes to arise over the management rights of a company, and these disputes often end up in litigation. The Civil Affairs Division 8 of the Tokyo District Court is known as the "Commercial Division" and is responsible for corporate and antitrust law-related litigation.
Most of the cases we deal with are internal disputes between family companies. In family companies, since the relatives of family members are often both shareholders and directors of the company, the number of measures that can be taken under the Companies Act is much greater than that of only one of the shareholders and directors.
In addition, such family companies often do not comply with the detailed provisions of the Companies Act. This can also be the cause of a corporate relationship lawsuit being filed. For shareholders on the offensive, this is due to the fact that the courts require compliance with the forms set out in the Companies Act.
We have seen cases where, although there were no problems at first, over time a family relationship deteriorated, resulting in disagreements over management, minority shareholders demanding that the company purchase their shares, and so on, and the conflict intensified due to a combination of economic interests and the emotional entanglements inherent in family members, which eventually led to litigation.
We have handled many family company disputes, so if you are involved in a dispute, we are able to provide you with advice on how to avoid being involved in a dispute or how to disentangle yourself from such a predicament.