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Corporation and Equity Participation

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Date added: 17-09-20


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(a) “Nemawashi” is an agricultural metaphor. The idea is that before a farmer plants a seed, he should prepare the roots and the soil, so that the seed has the best chance of survival. It is a political process by which an unofficial understanding is reached before a final decision is made on a particular matter. “Nemawashi” is Bottom-up style decision making (middle management has the greatest influence on decision making). The Japanese are primarily concerned with harmoniously working out problems without causing interpersonal frictions, such nemawashi is employed as simply informal lobbying to gain consensus before action. A complete consensus is essential and this is achieved by using the process of “ringi”. Everyone stamped his chop on a piece of paper called “ringsho”, a formal meeting can be called to discuss the issue very formally. No one usually says anything negative at this meeting. Why? , this is largely due to the extensive preparation involving a lot of meetings before the final meeting. While vertical US system is top-down decision making, downward communication consists primarily of orders for implementation, and upward communication consist of reports on performance and accomplishment. Top management come up with programmed decisions, employees are to follow through. Nemawashi promotes Democracy for lower levels, encourages greater participation, decisions are met with general acceptance and it reinforces harmony within the company. Because an excessive number of meetings are held, involving an excessive number of people, the process is time consuming and can lead to lost business opportunities. Situation: Company worker identified a potential new client. Process: Important account information and an outline of potential benefit from acquiring the client is composed using a ringsho. This is passed to various departments to determine if the potential client matches each department requirement. For example finance/accounting (for credit worthiness), to distribution (for logical support) and to public relations (for appropriateness of associating with the new client) Situation: A decision concerning financial commitment is needed. Process: A ringisho is composed with various financial alternatives. Based upon the financial requirement, the ringsho is circulated to the appropriate managerial levels. For example Chairman, the president, vice president, senior management group and, to divisional managers. The process permits initiative from lower level managers by giving them responsibility for carrying out action. It gives top management control while providing a method for group participation. Drawback may include inadequate overall knowledge of the company by the lower-level manager to make effective decision. The inability to make spontaneous decision can inhibit long-range planning. The organizational culture may compel individual group member to accept the final decision, even if they disagree. (b) Understanding the difference between the two cultures’ nonverbal communication system is necessary for a successful business transactions. Japanese business meeting etiquette must also be religiously respected. These will go a long way to decrease intercultural communication apprehension on both sides. Several symbols represent words or expressions to the Japanese that must be conveyed verbally in other countries. For Americans or Canadians to be successful with the Japanese, we must learn how to comprehend the significance of important traditions: e. g. Japanese bow, business card exchange, different meaning of eye contact, facial expressions, and typical Japanese body gestures, tactile aspects, and time concepts. Qi Concepts Limited offers cross-cultural communication seminars, one-on one coaching for key executives and business “hotline” services. At the beginning of the meeting, it is expected that foreigners greet fellow Japanese business people with respect and earnestness. Although the customary greeting in Japan is to bow, some Japanese, especially those with international experience will greet fellow business people with a handshake. If one is greeted with a bow however, they should return the bow, preferably as low as the one they received. How low one bows determines the status of the relationship between the two. Between Japanese, subordinates will bow deeply and their superiors will not to the same extent. Before everyone takes a seat, it is an essential part of Japanese business etiquette to exchange business cards. In Japan, business cards are called ‘meishi’. They are considered not only as serious tools for establishing business contacts, but also as identification of the individual and the company he/she represents. Business cards should be printed with one side in Japanese and one side in the language of the individual’s home country. It is in ones best interest to offer their business card with both hands as this denotes reater respect. Unlike many Western countries where it is acceptable to ‘pocket’ a business card upon receipt, it is considered extremely rude and disrespectful in Japan. In comparison it is expected for the recipient to review and memorize the details printed on the card and then carefully place it in a card holder or pocketbook. As Japanese business meetings are conducted formally, it is unacceptable for members to dress casually. Acceptable attire for men includes conservative suits in a dark color. Women are also expected to dress conservatively and should avoid wearing trousers as Japanese men may take it offensively. In addition both men and women should wear slip on shoes as it is probable that they may frequently have to take off their shoes. The seating arrangement in Japanese business meetings tends to be dependant on the status of the participants; the highest ranking member will be expected to take a seat at the head of the table. The succeeding members of rank will then take their seats starting with the seats closest to the highest ranking member and then gradually move round to the end of the table. At the end of the meeting, one must wait until the highest ranking participant stands before they can. Throughout the business meeting, it is mandatory to behave in the accepted manner. For example, pointing or using large hand gestures should be avoided as it is not usual for Japanese people to gesticulate as they talk and so it may be considered a distraction. In addition, blowing your nose in public is perceived as being disruptive and unhygienic. As a participant, it is also important to look interested for the duration of the business meeting. Consequently, taking notes is highly appreciated. For Japanese business persons, social drinking provides an outlet and is greatly encouraged by the business world. Doing business with the Japanese is a skillful art acquired through patience and understanding. One can never hide one’s western culture so attempt to blindly copy Japanese methods are destined to fail. Instead, respect the Japanese system, and business communication is sure to flourish. (c) Representative offices aimed at the collection and provision of information may be freely established without any registration requirements under the Japanese Commercial Code; no notification need be provided to tax offices, as representative offices do not engage in business operations in Japan and hus are not subject to corporate tax. However, representative offices established by foreign banks, insurance companies, securities companies, or other financial institutions are exceptions; prior notification must be provided to the Financial Services Agency for such representative offices (as stipulated in the Banking Law, Securities Exchange Law and other laws). A bank account opened by a representative office will ordinarily be registered jointly in the name of the office and an individual representative, as in "(name of representative), Japan Representative Office, (name of company). The documentation generally required for a representative office to open a bank account is as follows: * Passport of representative * Certificate of alien registration of representative * Company brochure * Leasing agreement * Bank seal Foreign companies generally engage in business operations by establishing a branch office, subsidiary company, or limited liability partnership, and the legal differences between each of these are summarized in the following table. Table 1-1| | Branch office| Subsidiary company| Limited liability partnership (LLP)| | | Kabushiki-Kaisha (joint-stock corporation)| Godo-Kaisha limited liability company (LLC))| | Restrictions on equity participation| Notification must be filed with the Bank of Japan| Notification must be filed with the Bank of Japan| Notification must be filed with the Bank of Japan| Notification need not be filed with the Bank of Japan| Capital| No capital| 1 yen or more(*1)| 1 yen or more(*1)| 2 yen or more (if 2 partners)| Number of investors| -| 1 or more| 1 or more| 2 or more(*3)| Liability of equity participants/parent company toward creditors| Unlimited| Limited to amount of equity participation| Limited to amount of equity participation| Limited to amount of equity participation| Transfer of equity participation share| No equity participation share| May be transferred freely in principle. May be stipulated in articles of incorporation that approval of Board of Directors is needed for transfer of shares. Unanimous approval of equity participants (members) required| Unanimous approval of partners required| Number of executives required| Representative in Japan. 1 or more(*2)| See Tables 1-2, 1-3| No legally stipulated minimum. In principle, all members are executive officers, but a representative member may be appointed(*2). | No legally stipulated minimum. All partners are executive officers(*3). | Legally stipulated term of office for executives| No legally stipulated term| See Tables 1-2, 1-3| No legally stipulated term| No legally stipulated term| Regular general meeting of shareholders (members)| Not required| In principle, must be held every year| Not required| Not required| Possibility of public offer of stock (equity participation share)| No equity participation share| Possible| Not possible| Not possible| Possibility of reorganization into joint-stock corporation| Not possible. Need to separately close branch office and establish joint-stock corporation(*4)| -| Possible| Not possible. Need to separately dissolve partnership and establish joint-stock corporation(*5)| Distribution of profits and losses| -| Allocated according to equity participation ratio| May be allocated at a different rate from equity participation rate if specified in articles of association| May be freely allocated with the unanimous approval of partners| Taxation of profits| Income arising within Japan is in principle taxed| Taxed according to profits of joint-stock corporation and profits allocated to shareholders| Taxed according to profits of Godo Kaisha and profits allocated to participants| No taxation of partnerships themselves. Taxation of profits allocated to partners| (*1) Although establishment with capital of zero yen is theoretically possible, approval is granted ex post facto, and it is not in practice possible to incorporate a company without paying in capital. (*2) At least one representative must have an address in and be resident in Japan. (*3) One or more partner must be an individual who has an address in and is resident in Japan for more than 1 year, or a Japanese corporation. *4) See 1. 6. 1 "Closure of branch offices". (*5) See 1. 6. 3 "Dissolution and liquidation of limited liability partnerships". "http://internationalbusiness. wikia. com/wiki/Japanese_Business_Meeting_Etiquette" www. jetro. go. jp/en/invest/setting_up/laws/section1/ http://www. allbusiness. com/human-resources/employee-development-problem-solving/393248-1. html www. cognos. com/SPSS www. japanese123. com/ .” www. basis. ie/servlet/blobservlet/japan. pdf
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