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The Company Act provides that a company limited by shares may not enter into, alter, or terminate a contract for the lease of its entire business, for commissioning the operation of its business to another entity, or for regular joint operation with another entity, unless a special resolution has been adopted by a shareholders' meeting. In an interpretation dated 6 October 2004, the Ministry of Economic Affairs, by referring to the opinions of scholars of company law, explained the terms used in the above pro-vision, as follows:
"Lease of the entire business" means that a company provides the whole of its business operations (including the assets used for the business) to the lessee for use. The lessee carries on the business in its own name and for its own account, while the lessor company merely receives rent.
"Commissioning another entity to operate the business" means that a company gives over the whole of its business operations to a commissioned company for use, but the commissioned company operates the business in the name and for the account of the commissioning company. Operating profits and losses are ascribed to the commissioning company. The commissioning company has the power of direction, may monitor the operation of the business, and is obligated to pay a certain level of consideration to the commissioned company.
"Contract for regular joint operation with an-other entity" means an agreement between multiple companies for jointly sharing of profits and losses, under which the partici-pating companies must also be subject to a unified direction, and strive to act as a single economic unit.
