Article 52. Liability Where the Value of Invested Assets is Inadequate

(Compare Article 192-2 of the former Commercial Code)

1. When the value of the assets contributed in kind at the time of the incorporation of the kabushiki kaisha is remarkably lower than the amount of the said assets contributed in kind as entered or recorded in the articles of incorporation (when the articles of incorporation have been amended, then the amount after the amendment), then the incorporators and the establishment directors shall be jointly and severally liable to pay the deficiency to the said kabushiki kaisha.

2. Notwithstanding the provisions of the previous paragraph, the incorporators (excluding the party of Article 28. (Other Articles of Incorporation Entries), paragraph 1 who supplied the assets of Article 28, paragraph 1, or the party who transferred the assets of Article 28, item 2. In item 2, the same) and the establishment directors shall not bear the liability of the same paragraph in the situations listed hereunder:

(a) Concerning the matters listed in items 1 or 2 of Article 28, those situations where the examination of the inspector of Article 33. (Appointment of Inspector Concerning Matters Entered or Recorded in the Articles of Incorporation), Paragraph 2 has been passed.

(b) Those situations where incorporators or establishment directors prove they have not been negligent in the performance of their duties.

3. In the situation provided for in paragraph 1, the party making the certification provided for in Article 33, Paragraph 10, item 3 (called the “certifier” hereinafter in this paragraph) shall be jointly and separately liable with the liable parties of paragraph 1, for the obligation of paying the deficiency of the same paragraph. Provided, however, where the said certifier can prove that he has not been negligent, this shall not apply.

Disclaimer: This translation is for general reference purposes only and is provided on an “as is” basis with no warranties made whatsoever. Attorney Roderick H. Seeman (licensed in the USA) shall not be responsible for any consequences resulting from the use of this translation. Reliance must be placed on the original Japanese text of the laws. In the text of the translation article headings are added in parenthesis are not in the Japanese language original and are added only for the purposes of enhanced comprehension.

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