Newsletter
TIMING OF MERGER-RELATED AMENDMENTS TO ARTICLES OF INCORPORATION
The Company Law provides that after compa-nies merge, the surviving company should con-vene a post-merger shareholders' meeting to re-port on the merger, and if necessary to amend the company's Articles of Incorporation (AOI). From this provision it would appear that any necessary amendments to the AOI of the sur-viving company should be made at the post-merger shareholders' meeting. Nonetheless, in current corporate registration practice, when amendments are necessary due to a merger (e.g. to increase the capital, or to change the numbers of directors and supervisors or the business scope of the company), the vast majority of surviving companies amend their AOI at the shareholders' meeting that approves the merger, and very few do so at the post-merger meeting as provided by the Company Law.
Furthermore, companies limited by shares are subject to an authorized capital system, so that if a merger increases a company's total capital to above its currently authorized level, the company will need to amend its AOI before the merger to increase its authorized capital. Therefore, on 5 June 2003 the Ministry of Economic Affairs (MOEA) issued an interpretation that if a com-pany needs to amend its AOI due to a merger, it should not be forced to wait until the post-merger shareholders' meeting, and may make the amendments at a pre-merger shareholders' meeting.
It has also been a matter of doubt whether the person who signs a merger agreement must be specifically empowered by a resolution of the company's board of directors. In the same in-terpretation, the MOEA stated that this is a mat-ter to be decided by companies themselves. When registering a merger, it is therefore not necessary to submit documents showing the company's appointment of a person to sign the merger agreement.