Curious to know if anyone has experienced this before.
I’m curious to understand any legal implications, as there is conflicting opinions by our Board Members (all others are Japanese) that even if the company is 100% acquired by a large US corporation the company may continue as a subsidiary with a fully functional board.
My opinion is this is entirely up to the entity acquiring us and they are likely not going to consider having 2 boards so this will be dissolved, we will operate as a part of the corporation, and only a few required members may be left to run the business, if they can provide the skills necessary to ease a transition period.
I’ve experienced the above scenario twice in overseas companies but a few older members seem to be convinced I’m wrong and Japanese law allows a greater influence by existing members in the business.
I think they are full of shit but I cannot find any similar examples or legal Japanese that proves either opinion correct or not.
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It really depends. I’ve experienced situations where we had a foreign board to maintain some regulatory independence and provide market strategy. Although the US entity did appoint members from the US to round out the domestic membership.
But ultimately it will be determined on how profitable the Japan entity is. BoD members are expensive.
>My opinion is this is entirely up to the entity acquiring us and they are likely not going to consider having 2 boards so this will be dissolved
I haven’t been the exact same situation. But in my experience foreign subsidiaries almost always have their own boards. The parent board may place some limitations and provide oversight. The two boards may or may not share any directors.
Usually separate boards are required because the legal, tax and business environments will very different between the parent & the subsidiary.
Imagine an enterprise that has subsidiaries in dozens of countries; It would be impossible for the parent board to make informed decisions for all of their foreign subsidiaries.
Um, uh, yeah, welcome to my life.
Is this a publicly traded company? Then it might get fun!
Private? 社長 is going to just sit there until he dies. Really? Do you have nothing better to do with your remaining time? Nope.
Not sure about Japan specifically, but subsidiary companies can have local boards separate or with some overlap with the parent’s global board.
They pay them to leave. Each board member will have their lawyers negotiate terms of separation. It likely already happened before the takeover.
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or they may be lazy and dick the ball down the road. I have seen companies get purchased only to fail because the foreign company never bothered to create a plan for the board members and ego related chaos consumes the company. Kinda like Twatter.