【Implemented in October Reiwa 6 (2024)】Thorough Explanation of the Advantages and Disadvantages of Keeping the Address of the Representative Director Private in Registration

Starting from October 1, Reiwa 6 (2024), the “Japanese Corporate Directors’ Address Non-Disclosure Measures” will be implemented. This will allow the home addresses of corporate directors, such as those of joint-stock companies, to be kept private in the registration information.

At first glance, this may seem like a beneficial system for protecting privacy. However, it presents several disadvantages for overall corporate activities.

This article will clearly explain the advantages and disadvantages of the system for non-disclosure of directors’ addresses.

What is the Measure for Non-Disclosure of Addresses of Corporate Executives?

The measure for non-disclosure of addresses of corporate executives is a provision that allows for the partial non-disclosure of the addresses of corporate representatives and other executives in the certificate of registered matters, the summary of registered matters, and the registration information provision service, under certain requirements.

Reference: General Incorporated Foundation Civil Affairs Legal Affairs Association | Registration Information Provision Service[ja]

This system was established to balance the protection of executives’ privacy with the smooth operation of businesses.

To use this system, the corporate representative or executive themselves must file a request with the Legal Affairs Bureau. Once the request is approved, only the city, ward, town, or village part of the address will be displayed on the certificate of registered matters and other documents. The street number and building name will not be shown.

However, public institutions such as courts and tax offices will still be able to verify the registered address information.

The procedure for filing a request requires submitting the designated documents together with the registration application. For more details, please check the Ministry of Justice website[ja].

The Pros and Cons of Concealing the Address of a Company’s Representative Director

Deciding whether to utilize this system requires careful consideration. It is crucial to understand not only the benefits of concealing the address of the representative director but also the disadvantages, and to consider these in light of your company’s specific situation and risks.

Specifically, the following are the pros and cons.

Disadvantages of Concealing the Address of the Company’s Representative Director

The Ministry of Justice’s website strongly cautions in red about the potential inconveniences that may arise from this measure.

※ Caution ※

If measures to conceal the address of the representative director are taken, it will become impossible to verify the address of the company’s representative through certificates of registered matters. This could lead to difficulties in obtaining loans from financial institutions, and increase the number of required documents (such as the company’s seal registration certificate) for real estate transactions, among other things, potentially causing certain disruptions.

Therefore, before applying for the concealment of the address of the representative director, we kindly ask you to carefully and thoroughly consider the possible impacts of such a measure.

Source: Ministry of Justice | About Measures to Conceal the Address of the Representative Director, etc.[ja]

Difficulty in Obtaining Loans from Financial Institutions

When applying for a loan, the address of the representative director is an important criterion for review. Utilizing the address concealment system may prevent financial institutions from verifying the asset status and creditworthiness of the representative director, potentially making it more difficult to obtain loans.

This could particularly be a significant setback for loans to new ventures or for companies that are in the early stages of establishment.

Damage to Trust with Business Partners

In contracts and negotiations with business partners, the address of the representative director is also crucial information. Utilizing the address concealment system may cause business partners to feel uncertain not being able to “see” the face of the company’s management.

As a result, the trust relationship with business partners may be damaged, making it difficult to acquire new transactions or continue existing ones.

Legal Procedures Become More Complicated

In various legal procedures within a company, there are many instances where a certificate proving the address of the representative director is necessary. Utilizing the address concealment system can complicate these procedures, requiring additional certificates, among other things, potentially increasing time and costs.

Moreover, in transactions with overseas entities, address concealment can be a factor that complicates procedures.

Ambiguity in Social Responsibility

In cases where a company causes a social issue, the address of the representative director is important for clarifying the locus of responsibility. Utilizing the address concealment system may make it difficult to resolve issues or pursue accountability.

In an era where corporate social responsibility is scrutinized, this poses a significant risk.

Summary: Carefully Consider the Application for Non-Disclosure of Directors’ Addresses

At first glance, the system for non-disclosure of directors’ addresses may seem beneficial, but it carries numerous disadvantages for business owners and corporate activities. Before applying, it is crucial to carefully consider and reduce your company’s management risks.

When considering applying for the non-disclosure of directors’ addresses, we recommend consulting with a professional, such as a lawyer.

Introduction to Our Measures

Monolith Law Office is a legal office with high expertise in both IT, particularly the internet, and law. We provide a wide range of legal support, including the drafting and reviewing of contracts, to clients ranging from Tokyo Stock Exchange-listed companies to venture businesses. For more details, please refer to the article below.

Areas of Practice at Monolith Law Office: IT & Venture Corporate Legal Affairs[ja]