Q6 (Post-Incorporation Asset Purchases)

Since in-kind contributions are complicated, would it be a problem to have the company purchase the assets after incorporation?

If, within two years of its incorporation, a company purchases assets for its business that were existing from before its incorporation, at a price that is more than 20% of its net assets, a shareholders’ super-majority resolution (which in Japan is two-third) is required as a so-called post-incorporation establishment. So be careful. However, this is not a contribution in kind, so a third party valuation is not required.

(Posted: January 27, 2012)