Article 3A small and medium-sized enterprise cooperative (hereinafter referred to as "cooperative") is any of the following:

Article 4(1)A cooperative is a juridical person.

(2)The address of a cooperative is at the location of its principal office.

Article 5(1)A cooperative must satisfy the following requirements, except as otherwise provided by this Act:

(2)A cooperative has the purpose to directly serve its partner through its activities, and it must not conduct any activities for the purpose of only benefiting specific partner.

(3)A cooperative must not be utilized for any specific political party.

Article 6(1)A cooperative must use the following words in its name:

(2)No person other than a cooperative established pursuant to this Act or a cooperative or federation established pursuant to other special law may use in its name a word indicating that the person is a business cooperative, small business cooperative, fire mutual aid cooperative, credit cooperative, federation of cooperatives, or joint enterprise cooperative.

(3)With regard to the name of a cooperative, the provisions of Article 8 (Prohibition of Using Name, etc. which is Likely to be Mistaken for a Company) of the Companies Act (Act No. 86 of 2005) apply mutatis mutandis.

Article 7(1)With regard to the application of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947; hereinafter referred to as "Antimonopoly Act"), each of the following cooperatives is deemed to be a cooperative which satisfies the requirement set forth in Article 22, item (i) of that Act:

(2)With respect to a business cooperative or a credit cooperative which has a member who falls outside of the categories of enterprise prescribed in item (i) (a) and (b) of the preceding paragraph, the Fair Trade Board Member has the authority to determine whether or not the cooperative falls under the category of cooperative that satisfies the requirement set forth in Article 22, item (i) of the Act on Prohibition of Private Monopolization.

(3)A cooperative referred to in the preceding paragraph must, where an enterprise outside of the categories of enterprise prescribed in paragraph (1), item (i), (a) or (b) has joined therein or where any of its partner has come to fall outside of the categories of enterprise prescribed in paragraph (1), item (i), (a) or (b), notify the Fair Trade Board Member of this within thirty days.

Article 8(1)A person who is qualified to be a member of a business cooperative is a small sized enterprise or a small business cooperative provided in paragraph (1) or paragraph (2) of the preceding Article who is engaged in commerce, industrial business, mining business, transport business, service business or any other business within the district of the cooperative and who is provided by the articles of corporation.

(2)A person who is qualified to be a member of a small business cooperative is an enterprise that is engaged in commerce, industrial business, mining business, transport business, business providing services or any other business within the district of the cooperative mainly through its own work and whose number of regular hired employees is not more than five or so (in the case of an enterprise whose principal business is commerce or business providing services, two), and who is specified by the articles of corporation.

(3)A person who is qualified to be a member of a fire mutual aid cooperative is any small sized enterprise provided in paragraph (1) or paragraph (2) of the preceding Article that is engaged in commerce, industrial business, mining business, transport business, business providing services or other business provided by an order of the competent ministry within the district of the cooperative (in the case of a cooperative whose district is nationwide, any enterprise that is engaged in a business that belongs to one of the business types provided by the articles of corporation).

(4)A person who is qualified to be a member of a credit cooperative is a small sized enterprise provided in paragraph (1) or paragraph (2) of the preceding Article that is engaged in commerce, industrial business, mining business, transport business, service business or any other business within the district of the cooperative, a person who has their address or residence within the district of the cooperative, a person who is engaged in work within the district of the cooperative, or a person who is provided by a Cabinet Order as a person equivalent thereto, and who is provided by the articles of corporation.

(5)A person who is qualified to be a member of a federation of cooperatives is either of the following persons and one who is specified by the articles of corporation:

(6)a person who is qualified to be a member of a joint enterprise cooperative is any of the following persons and one who is specified by the articles of corporation:

Article 8-2The member set forth in item (ii) or (iii) of paragraph (6) of the preceding Article (hereinafter referred to as "specified member") must not exceed one-quarter of all partner of a joint enterprise cooperative.

Article 9The amount equivalent to the amount of surplus that a cooperative has distributed in accordance with the amount of use of the cooperative's businesses is, pursuant to the provisions of the Corporation Tax Act (Act No. 34 of 1965), to be included in the amount of deductions when calculating the amount of income for each business year or the amount of consolidated income for each consolidated business year under the provisions of that Act with regard to the cooperative.

Article 9-2(1)A business cooperative or a small business cooperative may conduct all or part of the following activities:

(2)In mutual aid contracts concluded pursuant to the provisions of item (iii) of the preceding paragraph for covering damages that may be caused to property by a fire or by any of the mutual aid incidents when collectively deeming a fire and all or part of the accidental incidents specified by order of the competent ministry under Article 9-7-2, paragraph (1), item (i) to be mutual aid incidents, a business cooperative or a small business cooperative must not set the total amount of mutual aid money pertaining to the mutual aid contracts per mutual aid contractor to be in excess of the amount specified by order of the competent ministry.

(3)A business cooperative or a smsll business cooperative may have non-partner utilize its businesses, so long as it does not hinder the use by its partner; provided, however, that the total value of the amount of the use of businesses by non-partner during a single business year must not exceed twenty percent of the total value of the amount of the use by its partner during the business year.

(4)Notwithstanding the provisions of the proviso to the preceding paragraph, a business cooperative or a small business cooperative may have non-partner utilize the businesses prescribed in the following items, only during the periods respectively prescribed in those items, to the extent that the percentage of the total value of the amount of businesses used by non-partner during a single business year to the total value of the volume of the use by its partner during the business year does not exceed the percentage specified by Cabinet Order not exceeding one hundred percent for each of those items:

(5)The provisions of the proviso to paragraph (3) do not apply when a business cooperative or a small business cooperative has the general public utilize a facility for physical exercise or any other facility, among the facilities it owns, that falls into the category of facilities specified by Cabinet Order as those that are appropriate to be provided for the use by the general public in addition to being provided for the use of partner.

(6)A business cooperative or a small business cooperative may, on behalf of its partner, act as an agent in carrying out businesses or processing businesses (limited to insurance sales [meaning insurance sales provided in Article 2, paragraph (26) of the Insurance Business Act (Act No. 105 of 1995); the same applies hereinafter] and businesses that are provided by an order of the competent ministry as those relevant to the business) of an insurance company (meaning an insurance company provided in paragraph (2) of that Article; the same applies hereinafter) or any person provided by order of the competent ministry as the one esquivalent thereto.

(7)A business cooperative or a small business cooperative engaged in mutual aid activities (meaning activities where the cooperative receives a payment for mutual aid premiums from its partners and any other mutual aid contractors, and pay mutual aid money when the mutual aid incidents arise, which are specified by order of the competent ministry as those, in order to protect the partners and any other mutual aid contractors, need to be secured in light of the amount of mutual aid money and other matters; the same applies hereinafter) pursuant to the provisions of paragraph (1), item (iii) whose total number of partners exceeds the standards specified by Cabinet Order, or a business cooperative engaged in the activities of the reinsurance of mutual aid liabilities or the retrocession of reinsurance liabilities borne by member cooperatives in the course of mutual aid activities (hereinafter referred to as "specified mutual aid association") may not engage in activities other than mutual aid activities and activities incidental thereto and the activities prescribed in the preceding paragraph, notwithstanding the provisions of paragraph (1); provided, however, that this does not apply when the cooperative has obtained the approval of an administrative authority pursuant to the provisions of order of the competent ministry.

(8)When a request for approval under the proviso to the preceding paragraph is filed with the administrative authority, it must not approve the request unless it is obvious that the activities pertaining to the request poses no risk of harming the sound and appropriate operations of the specified mutual aid association.

(9)With regard to the application of the provisions of paragraph (3) to a business cooperative in mutual aid activities and activities provided in paragraph (6), the term "partner" in the proviso to that paragraph is deemed to be replaced with "partner, relatives who share the same livelihood with the partner, and small-scale enterprose that directly or indirectly constitute member cooperatives"; and with regard to the application of the provisions of that paragraph to a small business cooperative, the term "partner" in the proviso to that paragraph is deemed to be replaced with "partner and relatives who share the same livelihood with the partner."

(10)A business cooperative or a small business cooperative may guarantee obligations borne by its members to a financial institution prescribed in the articles of incorporation or collect the claim entrusted to the business cooperative by the financial institution.

(11)A business cooperative or a small business cooperative may, pursuant to the provisions of the preceding paragraph and the provisions of the articles of incorporation, guarantee obligations concerning the business of its member that are borne by the member to a person other than a financial institution.

(12)An enterprise (excluding small-scale enterprises) that has a business relationship with a business cooperative or a small business cooperative is to start negotiation with sincerity when the representative person of the business cooperative or small business cooperative (including the representative person of a federation of cooperatives who is a member of these cooperatives) states an intention to start negotiations to conclude a collective agreement on the trade terms and conditions pursuant to the provisions of Cabinet Order.

(13)A collective agreement referred to in paragraph (1), item (vi), which needs to be approved by the general assembly in advance, becomes effective by siging a written document clearly stating that it is a collective agreement referred to in that item.

(14)A collective agreement referred to in paragraph (1), item (vi) becomes effective directly between the business cooperative and partners.

(15)With regard to a contract concluded by a member of which the contents violate the standards prescribed in a collective contract referred to in paragraph (1), item (vi), the part of the contract that violates the standards is deemed to have been concluded according to the relevant standards.

Article 9-2-2(1)Both of or either of the negotiating parties referred to in paragraph (12) of the preceding Article may, when the negotiation cannot be held or when agreement is not reached on the contents of the collective agreement, file a request for mediation or conciliation with an administrative authority.

(2)When a rquest referred to in the preceding paragraph is filed with an administrative agency and if it finds it necessary to secure the fairness of economic transactions, it is to carry out mediation or conciliation promptly.

(3)In the case where an administrative authority carries out a conciliation pursuant to the provisions of the preceding paragraph, it may prepare a conciliation proposal and, by presenting it to the parties concerned, recommends that the parties concerned accept it, and publicize the conciliation proposal together with the reason.

(4)With regard to mediation or conciliation referred to in the preceding two paragraphs, an administrative authority must consult with the Small and Medium Enterprise Policy Making Council or the Prefectural Small and Medium Enterprise Conciliation Council.

Article 9-2-3(1)A business cooperative or a small business cooperative may, when the usage of services by its partners decreases due to the withdrawl of partners or due to other unavoidable circumstances, and administration of services that are provided using its own facility is greatly hit, have non-partners use the services to the extent that the total amount of service usage by non-partners during a business year does not exceed two hundred percent of the total amount of service usage by its partners during the relevant business year, notwithstanding the provisions of the proviso to Article 9-2, paragraph (3), if it has obtained the approval of an administrative authority that it is necessary and appropriate for the cooperative to have non-partners use the services exceeding the limit prescribed in the proviso to that paragraph for a specifed period, so as to maintain proper administration of the services, pursuant to the provisions of order of the competent ministry.

(2)With regard to services pertaining to the approval referred to in the preceding paragraph, when an administrative authority finds that it is no longer necessary and appropriate for the authority to have non-partners use the services exceeding the limit prescribed in the proviso to Article 9-2, paragraph (3) so as to maintain proper administration of the services, it may revoke the approval.

Article 9-3(1)A business cooperative engaged in a storage business may, by obtaining the permission from the Minister of Land, Infrastructure and Transport, issue warehouse receipts for the bailed goods owned by its partners.

(2)A business cooperative which obtains the permission set forth in the preceding paragraph must issue a warehouse receipt for bailed goods, at the request of a bailor who is a member.

(3)With regard to warehouse receipts under paragraph (1), the provisions of Article 627, paragraph (2) (Mutatis Mutandis Application of the Provisions on Deposit Receipts) and Article 628 (Pledge of Warehouse Receipts) of the Commercial Code (Act No. 48 of 1899) apply mutatis mutandis.

(4)With regard to the case referred to in paragraph (1), the provisions of Article 8, paragraph (2), Article 12, Article 22 and Article 27 (Supervision) of the Warehousing Business Act (Act No. 121 of 1956) apply mutatis mutandis.In this case, the term "standards set forth in Article 6, paragraph (1), item (iv)" in Article 12 of that Act is deemed to be replaced with "standards specified by Order of the Ministry of Land, Infrastructure and Transport."

Article 9-4A warehouse receipt prepared by a business cooperative, which obtains permission referred to in paragraph (1) of the preceding Article, must include the Japanese characters for "warehouse receipt" bearing the name of the business cooperative.

Article 9-5(1)The storage period of bailed goods for which a business cooperative issues a warehouse receipt is within six months from the date on wjhich the goods are bailed.

(2)The storage period of bailed goods referred to in the preceding paragraph may be renewed for up to six months; provided, however, that this is limited to the case where the renewal does not hinder the use by partners, if the holder of the receipt on the renewal date is not a member.

Article 9-6With regard to the case where a business cooperative issues a warehouse receipt, the provisions of Articles 616 through 619 and Articles 624 through 626 (Rights of the Bailors or the Holders of Securities and the Responsibilities of the Warehouse Business Operators) of the Commercial Code apply mutatis mutandis.

Article 9-6-2(1)When a business cooperative or a small business cooperative intends to engage in mutual aid activities, it must establish mutual aid rules and obtain the approval of an administrative authority, pursuant to the provisions of order of the competent ministry.

(2)Mutual aid rules must contain particulars on the types of mutual aid activities and other particulars specified by order of the competent ministry concerning the implementation method of the activities, mutual aid contracts, mutual aid premiums, and the calculation method of the amount of policy reserve.

(3)With regard to the application of the provisions of the preceding paragraph in the case where a business cooperative intends to engage in activities of compulsory automobile liability mutual aid (hereinafter referred to as "liability mutual aid") provided in Article 5 (compulsory Conclusion of Contracts for liability mutual aid, etc.) of the Act on Securing Compensation for Automobile Accidents (Act No. 97 of 1955), the reinsurance of mutual aid liabilities borne through a liability mutual aid contract (hereinafter referred to as "liability reinsurance") or the retrocession of reinsurance liabilities borne through a liability reinsurance contract (hereinafter collectively referred to as "liability mutual aid, etc."), the phrase "the types of mutual aid activities and other particulars specified by order of the competent ministry concerning the implementation method of the activities, mutual aid contracts, mutual aid premiums, and the calculation method of the amount of policy reserve" in the preceding paragraph is deemed to be replaced with "particulars specified by order of the competent ministry concerning the implementation method of the activities of liability mutual aid, etc., mutual aid contracts, and mutual aid premiums."

(4)Changes to or the abolition of mutual aid rules do not take effect without the approval of an administrative authority.

Article 9-6-3(1)In the case where the interest insured under a mutual aid contract has been transferred, the transferee may succeed to the rights and obligations under the mutual aid contract which the transferor holds with regard to the interest insured, by gaining the consent of the business cooperative or small business cooperative conducting the mutual aid activities.In this case, if the interest insured is no longer the property of a member as provided in the proviso to Article 9-2, paragraph (3) as applied mutatis mutandis pursuant to the provisions of paragraph (9) of the same Article following the deemed replacement of terms (hereinafter referred to as a "member, etc." in this Article) due to its transfer, the interest insured is deemed to be the property of the member, etc. during the period of the mutual aid contract, and the provisions of Article 9-2, paragraph (1), item (iii), paragraph (3) and paragraph (9) apply.

(2)The provisions of the preceding paragraph apply mutatis mutandis to the case where the interest insured has been succeeded to due to death, a merger or a split.

(3)In the case where a member, etc. has ceased to be a member, etc. (excluding the case prescribed in the preceding paragraph), if any property among the interest insured under the mutual aid contract that has been concluded at that time ceases to be the property of the member, etc. due to the member, etc. ceasing to be a member, etc., the property is deemed to be the property of the member, etc. during the period of the mutual aid contract pertaining to the property, and the provisions of Article 9-2, paragraph (1), item (iii), paragraph (3) and paragraph (9) apply.

Article 9-7(1)A business cooperative may, pursuant to the provisions of laws and regulations, issue gift vouchers for the goods handled by its partner.

(2)When a business cooperative has issued a gift voucher, its partner has an obligation to exchange it with goods they handle.

(3)In the case where a business cooperative has issued a gift voucher, if its partner is unable to exchange the gift voucher or have suspended the exchange, the business cooperative is liable to pay the owner of the gift voucher up to the total face value of the gift voucher.

(4)In the case where a business cooperative that has issued a gift voucher sells its own goods, the term "partner" in the preceding three paragraphs is deemed to be replaced with "the business cooperative and the partner."

Article 9-7-2(1)A fire mutual aid cooperative is to conduct the following activities:

(2)Beyond what is set forth in the items of the preceding paragraph, a fire mutual aid cooperative may act as an agent in carrying out the operations or processing the affairs (limited to insurance sales and affairs that are specified by order of the competent ministry set forth in Article 9-2, paragraph (6) as those relevant to the insurance sales) of an insurance company or any person specified by order of the competent ministry set forth in that paragraph as one equivalent thereto.

(3)With regard to a fire mutual aid cooperative, the provisions of Article 9-2, paragraph (3) and Article 9-6-3 apply mutatis mutandis. In this case, the term "partner" in the proviso to that paragraph is deemed to be replaced with "partner, relatives who share the same livelihood with the partner, and small-sized enterprise provided in Article 8, paragraph (3) that directly or indirectly constitutes member cooperatives"; the phrase "the proviso to Article 9-2, paragraph (3) as applied mutatis mutandis pursuant to the provisions of paragraph (9) of that Article following the deemed replacement of terms" in Article 9-6-3, paragraph (1) is deemed to be replaced with "the proviso to Article 9-2, paragraph (3) as applied mutatis mutandis pursuant to Article 9-7-2, paragraph (3) following the deemed replacement of terms; and the term "Article 9-2, paragraph (1), item (iii), paragraph (3) and paragraph (9)" in the Article 9-6-3, paragraph (1) and the term "Article 9-2, paragraph (1), item (iii), paragraph (3) and paragraph (9)" in Article 9-6-3, paragraph (3) is deemed to be replaced with "Article 9-7-2."

Article 9-7-3Deleted.

Article 9-7-4Deleted.

Article 9-7-5(1)The provisions of Part II, Chapter X, Section 1, Subsection 1 (excluding Article 650, paragraph (1) and Article 664) (General Provisions on Non-life Insurance) of the Commercial Code apply mutatis mutandis to mutual aid contracts concluded by a business cooperative or a small business cooperative engaged in mutual aid activities or a fire mutual aid cooperative (hereinafter referred to as "a cooperative engaged in mutual aid activities" in this Article) whereby mutual aid premiums are received by promising to compensate for damages that may be caused by certain accidental incidents; the provisions of Subsection 2 (Fire Insurance) of that Section apply mutatis mutandis to fire mutual aid contracts concluded by a fire mutual aid cooperative; the provisions of Subsection 3 (Cargo Insurance) of that Section apply mutatis mutandis to mutual aid contracts concluded by a cooperative engaged in mutual aid activities (excluding a fire mutual aid cooperative) whereby mutual aid premiums are received by promising to compensate for damages to cargos that may be caused by certain accidental incidents; and the provisions of Section 2 (excluding the provisions pertaining to Article 664 among the provisions on application mutatis mutandis set forth in Article 683, paragraph (1)) (Life Insurance) of that Chapter apply mutatis mutandis to mutual aid contracts concluded by a cooperative engaged in mutual aid activities (excluding a fire mutual aid cooperative) whereby mutual aid premiums are received by promising to pay a certain amount of money with regard to the survival or death of a person (including a physical condition where the person has been diagnosed by a doctor as having only a certain period of time to live).

(2)The provisions of Article 275, paragraph (1), item (ii) and paragraph (2) (restriction on insurance sales) of the Insurance Business Act apply mutatis mutandis to the solicitation of mutual aid contracts of a cooperative engaged in mutual aid activities; the provisions of Article 283 (Liability for Compensation of the Insurance Company Concerned, etc.) of that Act apply mutatis mutandis to the solicitation of mutual aid contracts of a cooperative engaged in mutual aid activities carried out by officers or employees of the cooperative engaged in mutual aid activities, and by any mutual aid agent (meaning a person who acts as an agent or intermediary in concluding mutual aid contracts for a cooperative under entrustment by the cooperative, and who is not an officer nor an employee of the cooperative; the same applies hereinafter) of the cooperative engaged in mutual aid activities and officers or employees of the mutual aid agent; the provisions of Article 294 (Explanations to Customers) of that Act apply mutatis mutandis to officers and employees of a cooperative engaged in mutual aid activities, any mutual aid agent of the cooperative engaged in mutual aid activities, and officers and employees of the mutual aid agent, carrying out solicitation of mutual aid contracts; the provisions of Article 295 (Prohibition of Self-Contract) of that Act apply mutatis mutandis to a mutual aid agent; the provisions of Article 300 (Prohibited Acts) of that Act apply mutatis mutandis to a cooperative engaged in mutual aid activities and any mutual aid agent thereof (including their officers and employees) carrying out mutual aid activities; the provisions of Article 305 (on-site inspections, etc.), Article 306 (order to improve business operations), and Article 307, paragraph (1), item (iii) (revocation of registration, etc.) of that Act apply mutatis mutandis to a mutual aid agent; the provisions of Article 309 (revocation of applications for insurance contracts, etc.) of that Actapply mutatis mutandis to the revocation or cancellation of an offer for a mutual aid contract by a person who has filed an offer with a cooperative engaged in mutual aid activities or by a mutual aid contractor; and the provisions of Article 311 (carrying and presenting of identification cards by inspection officials) of that Act apply mutatis mutandis to officials who enter, question, and inspect pursuant to the provisions of Article 305 of that Act as applied mutatis mutandis pursuant to the provisions of this paragraph.In this case, the term "Cabinet Order" in Article 275, paragraph (1), item (ii), Article 294, item (iii), Article 295, paragraph (2), Article 300, paragraph (1), item (vii) and item (ix), and Article 309, paragraph (1), item (i), paragraph (2), paragraph (3), paragraph (5) and paragraph (6) of that Act is deemed to be replaced with "order of the competent ministry"; the phrase "a casualty insurance company (including a foreign casualty insurance company, etc.; hereinafter the same applies in this Part)" in Article 275, paragraph (1), item (ii), and paragraph (2) of that Act is deemed to be replaced with "a cooperative engaged in mutual aid activities"; the phrase "a casualty insurance agent registered under the following Article" in these provisions is deemed to be replaced with "a mutual aid agent notified under Article 106-3, item (i) of the Small and Medium-Sized Enterprise Cooperatives Act"; the phrase "which is a casualty insurance agent" in these provisions is deemed to be replaced with "which is a mutual aid agent"; the phrase "by obtaining registration under the following Article or Article 286" in paragraph (2) of that Article is deemed to be replaced with "by giving the notification under Article 106-3, item (i) of the Small and Medium-Sized Enterprise Cooperatives Act"; the phrase "provided insurance contract prescribed in the following Article" in Article 300, paragraph (1) of that Act is deemed to be replaced with "specified mutual aid contract prescribed in Article 9-7-5, paragraph (3) of the Small and Medium-Sized Enterprise Cooperatives Act"; the phrase "person having a specified relationship (meaning any person having a specified relationship as prescribed in Article 103 [including the cases where it is applied mutatis mutandis pursuant to the provisions of Article 272-13, paragraph (2); the same applies in the following Article] or any person having a special relationship as prescribed in Article 194, who is not an insurance holding company or a small-sum, short term insurance holding company (hereinafter referred to as an 'insurance holding company, etc.' in this Article and Article 301-2) for which the insurance company, etc. or foreign insurance company, etc. is a subsidiary company, nor a subsidiary company (excluding an insurance company, etc. or foreign insurance company, etc.) of the insurance holding company, etc., nor a person engaged in insurance business)" in Article 300, paragraph (1), item (viii) of that Act is deemed to be replaced with "subsidiary company, etc. (meaning a subsidiary company, etc. prescribed in Article 61-2, paragraph (2) of the Small and Medium-Sized Enterprise Cooperatives Act)"; the phrase "documents specified in the items of Article 4, paragraph (2), items of Article 187, paragraph (3) or items of Article 272-2, paragraph (2)" in Article 300, paragraph (2) of that Act is deemed to be replaced with "the articles of corporation, or mutual aid rules prescribed in Article 9-6-2, paragraph (1) of the Small and Medium-Sized Enterprise Cooperatives Act, or fire mutual aid rules prescribed in Article 27-2, paragraph (3) of that Act"; the term "Prime Minister" in Article 305 and Article 306 of that Act is deemed to be replaced with "administrative authority"; the term "Prime Minister" in Article 307, paragraph (1) of that Act is deemed to be replaced with "administrative agency"; the phrase "when a specified insurance solicitor or an insurance broker falls under any of the following items, may revoke the registration set forth in Article 276 or Article 286, or may" in these provisions is deemed to be replaced with "when a specified insurance solicitor or an insurance broker falls under item (iii), may"; and the phrase "all or part of the operations" in that provisions is deemed to be replaced with "solicitation of mutual aid contracts."

(3)The provisions of Chapter III, Section 1, Subsection 5 (excluding Article 34-2, paragraphs (6) to (8) and Article 34-3, paragraph (5) and paragraph (6)) (professional investors) and Article 45 (excluding item (iii) and item (iv)) (Miscellaneous Provisions) of the Financial Instruments and Exchange Act (Act No. 25 of 1948) apply mutatis mutandis to the conclusion of a specified mutual aid contract (meaning a mutual aid contract specified by order of the competent ministry as the one which poses the risk of incurring a loss [meaning the risk that the total amount of mutual aid premiums to be paid by the user as a result of the conclusion of the mutual aid contract would exceed the total amount of mutual aid money, etc. prescribed in Article 58, paragraph (6) to be acquired by the user as a result of the conclusion of the mutual aid contract] due to fluctuations in the money rate, value of currencies, quotations on the financial instruments market prescribed in Article 2, paragraph (14) of that Act, and other indicators; hereinafter the same applies in the following paragraph) by a cooperative engaged in mutual aid activities; and the provisions of Section 1, Subsection 1 of that Chapter (excluding Articles 35 to 36-4, Article 37, paragraph (1), item (ii), Article 37-2, Article 37-3, paragraph (1), item (ii) and item (vi) and paragraph (3), Article 37-5, Article 37-6, Article 38, item (i) and item (ii), Article 38-2, the proviso to Article 39, paragraph (3), Article 39, paragraph (5), Article 40-2, and Article 40-3) (General Rules) apply mutatis mutandis to the conclusion of a specified mutual aid contract by a cooperative engaged in mutual aid activities or a mutual aid agent or to acting as an agent or intermediary therefor.In this case, the term "contract for a financial instruments transaction" in these provisions is deemed to be replaced with "specified mutual aid contract"; the term "financial instruments business" in these provisions is deemed to be replaced with "conclusion of a specified mutual aid contract or acting as an agent or intermediary therefor"; the term "Cabinet Order" in these provisions (excluding the provisions of the main clause of Article 39, paragraph (3) of that Act) is deemed to be replaced with "order of the competent ministry"; the term "financial instruments business act" in these provisions (excluding the provisions of Article 34 of that Act) is deemed to be replaced with "conclusion of a specified mutual aid contract"; the phrase "contract to conduct financial instruments business acts (meaning acts prescribed in each item of Article 2, paragraph (8); the same applies hereinafter) with a customer as the other party or on behalf of a customer" in Article 34 of that Act is deemed to be replaced with "specified mutual aid contract prescribed in Article 9-7-5, paragraph (3) of the Small and Medium-Sized Enterprise Cooperatives Act"; the phrase "intends to conclude a contract for a financial instruments transaction" in Article 37-3, paragraph (1) of that Act is deemed to be replaced with "intends to conclude a contract for a financial instruments transaction, or acts as an agent or intermediary for the conclusion"; the term "the following matters" in that paragraph is be deemed to be replaced with "the following matters and other important matters out of the provisions of the mutual aid contract prescribed in Article 300, paragraph (1), item (i) of the Insurance Business Act as applied mutatis mutandis pursuant to Article 9-7-5, paragraph (2) of the Small and Medium-Sized Enterprise Cooperatives Act following the deemed replacement of terms"; the term "financial instruments business operator, etc." in item (i) of that paragraph is deemed to be replaced with "cooperative engaged in mutual aid business (meaning a cooperative engaged in mutual aid activities prescribed in Article 9-7-5, paragraph (1) of the Small and Medium-Sized Enterprise Cooperatives Act; the same applies hereinafter) or the cooperative for which the mutual aid agent (meaning a mutual aid agent prescribed in paragraph (2) of that Article) carries out mutual aid activities under entrustment"; the phrase "sales and purchase or any other transaction of securities (excluding sales and purchase on condition of repurchase for which the repurchase price is set in advance or other transactions designated by Cabinet Order) or transaction of derivatives (hereinafter referred to as 'sales and purchase or transaction of securities, etc.' in this Article)" in Article 39, paragraph (1), item (i) of that Act is deemed to be replaced with "conclusion of a specified mutual aid contract"; the phrase "securities or transaction of derivatives (hereinafter referred to as 'securities, etc.' in this Article)" in that item is deemed to be replaced with "specified mutual aid contract"; the phrase "customer (in the case where a trust company, etc. [meaning a trust company or financial institution that has obtained approval under the provisions of Article 1, paragraph (1) of the Act on Engagemetn in Trust Business Activities by Financial Institutions; the same applies hereinafter] conducts the sales and purchase of securities or transaction of derivatives for the account of the person who sets up a trust under a trust contract, including the person who sets up the trust; hereinafter the same applies in this Article)" in that item is deemed to be replaced with "user"; the term "loss" in that item is deemed to be replaced with "loss (meaning, in the case where the total amount of mutual aid premiums to be paid by the user as a result of the conclusion of the specified mutual aid contract exceeds the total amount of mutual aid money, etc. [meaning mutual aid money, etc. prescribed in Article 58, paragraph (6) of the Small and Medium-Sized Enterprise Cooperatives Act; hereinafter the same applies in this item] to be acquired by the user as a result of the conclusion of the specified mutual aid contract, the amount obtained by deducting the total amount of the mutual aid money, etc. from the total amount of the mutual aid premiums; hereinafter the same applies in this Article)"; the phrase "property benefit will be provided to the customer or the third party in order for the financial instruments business operator, etc. or the third party to compensate or make up for" in that item is deemed to be replaced with "property benefit will be provided to the customer or the third party, separately from the specified mutual aid contract, in order for the financial instruments business operator, etc. or the third party to compensate or make up for"; the term "sales and purchase or transaction of securities, etc." in item (ii) and item (iii) of that paragraph is deemed to be replaced with "conclusion of a specified mutual aid contract"; the term "securities, etc." in these provisions is deemed to be replaced with "specified mutual aid contract"; the phrase "property benefit will be provided to the customer in order for the financial instruments business operator, etc. or the third party to compensate for the whole or part of a loss incurred by the customer from the relevant securities, etc. or make an addition to" in item (ii) of that paragraph is deemed to be replaced with "property benefit will be provided to the customer, separately from the specified mutual aid contract, in order for the financial instruments business operator, etc. or the third party to compensate for the whole or part of a loss incurred by the customer from the relevant securities, etc. or make an addition to"; the phrase "providing property benefit to a customer or a third party or having a third party provide it to a customer, with regard to the sales and purchase or transaction of securities, etc., in order to compensate for the whole or part of a loss incurred by the customer from the relevant securities, etc. or make an addition to" in item (iii) of that paragraph is deemed to be replaced with "providing property benefit to a customer or a third party, separately from the specified mutual aid contract, or having a third party provide it to a customer, with regard to the sales and purchase or transaction of securities, etc., in order to compensate for the whole or part of a loss incurred by the customer from the relevant securities, etc. or make an addition to"; the term "sales and purchase or transaction of securities, etc." in paragraph (2) of that Article is deemed to be replaced with "conclusion of a specified mutual aid contract"; the phrase "that is designated by Cabinet Order as a potential cause" in paragraph (3) of that Article is deemed to be replaced with "that is a potential cause"; the phrase "Articles 37-2 to 37-6, Article 40-2, paragraph (4), and Article 43-4" in Article 45, item (ii) of that Act is deemed to be replaced with "Article 37-3 (limited to the part pertaining to the matters prescrived in the items of paragraph (1), and excluding item (ii) and item (vi) of that paragraph and paragraph (3)) and Article 37-4"; and any other necessary technical replacement of terms is specified by Cabinet Order.

Article 9-8(1)A credit cooperative is to conduct the following businesses:

(2)Other than the businesses set forth in the preceding paragraph, a credit cooperative may concurrently conduct the following activities:

(3)The total amount of deposits and installment savings pertaining to the business set forth in item (iv) of the preceding paragraph of a credit cooperative must not exceed an amount equivalent to twenty percent of the total amount of the deposits and installment savings of the credit cooperative.

(4)A credit cooperative must carry out the business set forth in paragraph (2), item (v) only to the extent that it does not prevent the execution of the business set forth in paragraph (1), item (i) and item (ii), pursuant to the provisions of Cabinet Order.

(5)The business set forth in paragraph (2), item (x) is to include the business performing the acts prescribed in Article 2, paragraph (8), items (i) through (vi) and items (viii) through (x) (Definitions) of the Financial Instruments and Exchange Act for those monetary claims indicated in the form of certificates as prescribed in that item that fall under the category of securities, and the business set forth in item (x)-3 of that paragraph is to include the business for short term company bonds, etc.

(6)In paragraph (2) and the preceding paragraph, the meanings of the terms prescribed in the following items are as prescribed in the relevant items:

(7)In addition to the businesses conducted pursuant to the provisions of paragraph (1) and paragraph (2), a credit cooperative may carry out the business conducting the acts specified in the items of Article 33, paragraph (2) (Prohibition on Engagement in Securities Services by Financial Institutions) of the Financial Instruments and Exchange Act (excluding the business conducted pursuant to the provisions of paragraph (2)) with regard to securities and transactions prescribed in the items of that paragraph, only to the extent not preventing the execution of the business set forth in paragraph (1), items (i) through (iii).

(8)In addition to the business conducted pursuant to the provisions of paragraph (1) and paragraph (2), a credit cooperative may carry out the following businesses, only to the extent not preventing the execution of the business set forth in paragraph (1), items (i) through (iii):

(9)In addition to the business conducted pursuant to the provisions of paragraph (1) and paragraph (2), a credit cooperative may carry out the following businesses for partners, local governments, and other persons specified by Cabinet Order, only to the extent not preventing the execution of the business set forth in paragraph (1), items (i) through (iii).

(10)With regard to the application of the Trust Business Act (Act No. 154 of 2004), the Secured Bond Trust Act and any other laws and ordinances specified by Cabinet Order regarding the business set forth in paragraph (8), item (ii) and the business prescribed in the preceding paragraph, a credit cooperative is deemed as a company or a bank, pursuant to the provisions of Cabinet Order.In this case, the provisions of the proviso to Article 14, paragraph (2) (Trade Name) of the Trust Business Act do not apply.

Article 9-9(1)A federation of cooperatives may conduct a part of the following businesses:

(2)A federation of cooperatives engaged in the business set forth in item (i) of the preceding paragraph may not conduct business other than those set forth in item (i) and item (ii) of that paragraph and business incidental thereto and the business prescribed in paragraph (6), notwithstanding the provisions of the preceding paragraph.

(3)A federation of cooperatives engaged in the business set forth in paragraph (1), item (iii) may not conduct business other than those set forth in item (ii) and item (iii) of that paragraph and the bearing of mutual aid liabilities pertaining to fire mutual aid contracts jointly and severally with fire mutual aid cooperatives, and business incidental thereto, notwithstanding the provisions of that paragraph.

(4)A federation of cooperatives engaged in mutual aid business pursuant to the provisions of paragraph (1), item (v) for which the total number of partner of its member cooperatives exceeds the standard specified by Cabinet Order or which is engaged in the business of the reinsurance of mutual aid liabilities or the retrocession of reinsurance liabilities borne by affiliate cooperatives in the course of mutual aid business (hereinafter referred to as "specified federation of mutual aid associations") may not conduct business other than mutual aid business and the business set forth in item (ii) of that paragraph, and business incidental thereto, and the business prescribed in Article 9-2, paragraph (6) as applied mutatis mutandis pursuant to the provisions of following paragraph, notwithstanding the provisions of paragraph (1); provided, however, that this does not apply when it has obtained the approval of an administrative agency pursuant to the provisions of order of the competent ministry.

(5)With regard to a federation of cooperatives (excluding that engaged in the business set forth in paragraph (1), item (i) or item (iii)), the provisions of Article 9-2, paragraphs (2) through (15) (excluding paragraph (7) and paragraph (9) [limited to the part pertaining to small business cooperatives]), Articles 9-2-2 to 9-7, and Article 9-7-5 apply mutatis mutandis.In this case, the term "partner, relatives who share the same livelihood with partner, and small-sized enterprises that directly or indirectly constitute member cooperatives" in Article 9-2, paragraph (9) is deemed to be replaced with "partner, affiliate small-sized enterprises, and relatives who share the same livelihood with affiliate small-sized enterprises."

(6)A federation of cooperatives engaged in the business set forth in paragraph (1), item (i) may conduct the following businesses.In this case, the business set forth in items (ii) thrugh (v) must be conducted only to the extent not preventing the execution of the business set forth in item (i) and item (ii) of that paragraph.

(7)With regard to a federation of cooperatives engaged in the business set forth in paragraph (1), item (i), the provisions of paragraphs (3) through (6) and paragraph (10) of the preceding Article apply mutatis mutandis.In this case, the phrase "paragraph (1), item (i) and item (ii)" in paragraph (4) of that Article is deemed to be replaced with "paragraph (1), item (ii) of the following Article" and the phrase "the business set forth in paragraph (8), item (ii) and the business prescribed in the preceding paragraph" in paragraph (10) of that Article is deemed to be replaced with "the business set forth in paragraph (6), item (iv) and item (v) of the following Article."

(8)With regard to a federation of cooperatives engaged in the business set forth in paragraph (1), item (iii), the provisions of the first sentence of Article 9-6-3, paragraph (1) and Article 9-7-5 apply mutatis mutandis.

Article 9-10A joint enterprise cooperative is to engage in commerce, industrial business, mining business, transport business, service business or any other business.

Article 9-11(1)Partner (excluding specified partners; the same applies in the following paragraph through paragraph (4)) of or more than one-half of all partners of a joint enterprise cooperative must engage in the business conducted by the joint enterprise cooperative.

(2)More than one-third of the persons engaged in the business conducted by a joint enterprise cooperative must be a partner.

(3)Partner of a joint enterprise cooperative must not carry out transactions in the lines of business as that conducted by the joint enterprise cooperative either for themselves or for third parties, without obtaining the approval of the assembly.

(4)When a member has carried out transactions for the benefit of the member in violation of the provisions set forth in the preceding paragraph, a joint enterprise cooperative may, based on a resolution of the assembly, deem the transactions to have been carried out for the joint enterprise cooperative.

(5)The right prescribed in the preceding paragraph lapses if it remains unexercised for two months from the date when another member learned about the transactions. The same applies when one year has elapsed from the date of the transactions.

(6)Specified partner of a joint enterprise cooperative must not carry out all or part of the transactions in the lines of business as that conducted by the joint enterprise cooperative, without obtaining the approval of the assembly.

Article 10(1)A member must make one or more units of contribution.

(2)The unit amount of contribution must be equal.

(3)The number of units of contribution per member must not exceed twenty-five percent (ten percent in the case of a credit cooperative) of the total number of units of contribution; provided, however, that any of the following partner (excluding partner of a credit cooperative) may offer up to the number of units of contribution equivalent to thirty-five percent of the total number of units of contribution in the cooperative, when the member has gained the approval of the cooperative based on a resolution of the assembly:

(4)The provisions set forth in the preceding paragraph do not apply to the number of units of contribution offered by a member of a cooperative having three partners or less.

(5)The liability of a member is limited to the amount of the contribution.

(6)A member may not duly assert against the cooperative for by offsetting the payment of contribution.

(7)A majority of the total number of units of contribution in a joint enterprise cooperative must be offered by partners (excluding specified partners) engaged in the business conducted by the cooperative.

Article 10-2(1)A cooperative must prepare a member registry and state or record the following particulars with respect to each member:

(2)A cooperative must keep its member registry at its principal office.

(3)Partner and obligees of a cooperative may make the following requests to the cooperative at any time during its business hours.In this case, the cooperative must not refuse the request without reasonable grounds.

Article 11(1)Each member has a single voting right and the right to elect officers or representative members.

(2)A member may, pursuant to the provisions of the articles of incorporation, exercise the voting right thereof or right to elect in writing or by proxy with regard to the particulars that have been notified in advance pursuant to the provisions of Article 49, paragraph (1). In this case, no person other than a relative or an employee of the member or another member may serve as a proxy.

(3)A member may, pursuant to the provisions of the articles of incorporation, exercise the voting right thereof by electronic or magnetic means (meaning a method using an electronic data processing system or any other method using information and communications technology, which is specified by order of the competent ministry; the same applies hereinafter, except in Article 33, paragraph (4), item (iii)), in lieu of the exercise of the voting right in writing under the provisions of the preceding paragraph.

(4)A person exercising a voting right or right to elect pursuant to the provisions of the preceding two paragraphs is deemed to be an attendant.

(5)A proxy may not serve as a proxy for five or more partners.

(6)A proxy must submit a document proving the right to represent to the cooperative.In this case, if the exercise of a voting right by electronic or magnetic means is allowed pursuant to the provisions of the articles of incorporation, the proxy may prove the right to represent by electronic or magnetic means, in lieu of the submission of the document.

Article 12(1)A cooperative (excluding a joint enterprise cooperative) may impose allocated expenses on its partner, pursuant to the provisions of the articles of incorporation.

(2)Notwithstanding the provisions of the preceding paragraph, a cooperative engaged in mutual aid business may not impose allocated expenses on its partner with regard to the mutual aid business (including the business incidental thereto).

(3)A member may not duly assert against the cooperative by offsetting the payment of expenses under paragraph (1).

Article 13A cooperative (excluding a joint enterprise cooperative) may collect usage fees and handling fees pursuant to the provisions of the articles of incorporation.

Article 14When a person qualified to be a member intends to join a cooperative, the cooperative must not, without reasonable grounds, refuse the person to join or impose more difficult requirements on the person on becoming a member than those imposed on present partners when they joined the cooperative.

Article 15A person who intends to join a cooperative becomes a member when the person has, after gaining the consent of the cooperative with regard to becoming a member pursuant to the provisions of the articles of incorporation, completed the payment of the amount corresponding to the number of units of contribution the person offers or, if the cooperative has rules for collecting a membership fee, when the payment of the fee is completged, or succeeded to all or part of the equity interest of a member.

Article 16(1)When the heir of a deceased member who is qualified to be a member has filed an application to join a cooperative within a period specified by the articles of incorportion, the heir is deemed to have become a member at the time of the commencement of succession, notwithstanding the provisions of the preceding Article. In this case, the member who is an heir succeeds to the rights and obligations of the deceased member with regard to the equity interest of the decedent.

(2)When there are several heirs to a deceased member, the provisions set forth in the preceding paragraph apply only to a single heir who has been selected with the consent of the other heirs.

Article 17(1)No member may transfer the equity interest thereof without the approval of the cooperative.

(2)When a non-member intends to acquire an equity interest, the transfer must be governed by the same rules as those for membership.

(3)The transferee of equity interest succeeds to the rights and obligations of the transferor with regard to the equity interest.

(4)No member may jointly own equity interest.

Article 18(1)A member may withdraw at the end of a business year by giving an advance notice at least ninety days before the relevant date.

(2)The period for advance notice set forth in the preceding paragraph may be extended by the articles of incorporation; provided, however, that the period must not exceed one year.

Article 19(1)A member withdraws based on any of the following grounds:

(2)Any of the following partners may be expelled based on a resolution of the assembly. In this case, the cooperative must notify the member to that effect by ten days prior to the day of the assembly and give the member an opportunity to give an explaination at the assembly.

(3)Expulsion may not be duly asserted against the expelled member unless the member has been notified to that effect.

Article 20(1)When a member has withdrawn pursuant to the provisions of Article 18 or paragraph (1), items (i) to (iv) of the preceding Article, the member may claim a refund of all or part of the equity interest, pursuant to the provisions of the articles of incorporation.

(2)The equity interest set forth in the preceding paragraph is decided based on the partnership property at the end of the business year in which the member withdraws.

(3)When calculating the equity interest set forth in the preceding paragraph, if the partnership property is insufficient for paying the obligation in full, the cooperative may request the withdrawn member to pay the amount of loss that the partner is liable to bear, pursuant to the provisions of the articles of incorporation.

Article 21The claim under the provisions of paragraph (1) or paragraph (3) of the preceding Article lapses by prescription if it is not exercised for two years from the date of withdrawal.

Article 22A cooperative may suspend a refund of equity interest until the withdrawn member has completed the obligation to pay in full to the cooperative.

Article 23(1)When a member has suspended the business or discontinued a part of the business, or when it is obvious that the member has unavoidable grounds, the member may reduce the number of units of contribution at the end of the business year, pursuant to the provisions of the articles of incorporation.

(2)With regard to the case set forth in the preceding paragraph, the provisions of Article 20 and Article 21 apply mutatis mutandis.

Article 23-2Out of the income received by a member (excluding a specified member) of a joint enterprise cooperative by engaging in the business conducted by the joint enterprise cooperative, the income received based on the same standards as those for the salaries, wages, reimbursement of expenses, bonuses, and retirement payments and remunerations having the same characteristics thereto paid by the joint enterprise cooperative to non-partner that engages in the business conducted by the joint enterprise cooperative is deemed to be employment income or retirement income with regard to the application of the Income Tax Act (Act No. 33 of 1965).

Article 23-3The government must take special taxation and financial measures for partners of a small business cooperative.

Article 24(1)In order to incorporate a business cooperative, a small business cooperative, a fire mutual aid cooperative, a credit cooperative or a joint enterprise cooperative, four or more persons who intend to become its partner (partner other than specified partner in the case of a joint enterprise cooperative) need to become founders, and in order to incorporate a federation of cooperatives, two or more cooperatives that intend to become its partner need to become founders.

(2)A credit cooperative may only be incorporateed unless it has more three hundred partners.

(3)A fire mutual aid cooperative may only be incorporated unless it has more one thousand partners.

Article 25(1)The total amount of contribution to a specified mutual aid association (excluding one engaged in the business of reinsurance or retrocession), a fire mutual aid cooperative, or a specified federation of mutual aid associations (excluding one engaged in the business of reinsurance or retrocession) must be ten million yen or more.

(2)The total amount of contribution in a specified mutual aid association or a specified federation of mutual aid associations engaged in the business of reinsurance or retrocession must be thirty million yen or more.

(3)The total amount of contribution in a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (iii) must be fifty million yen or more.

Article 26The district of a fire mutual aid cooperative is the entire area of a single or two or more prefectures for one that is qualified for membership for small-sized enterprises set forth in Article 8, paragraph (3), and is nationwide for one that is qualified for membership for small-sized enterprises that are engaged in a business that belongs to one of the business types specified by the articles of incoporation.

Article 26-2(1)The district of a fire mutual aid cooperative covering the area of a prefecture(s) must not overlap with the district of a fire mutual aid cooperative covering the area of another prefecture(s).

(2)A federation of cooperatives engaged in the activities set forth in Article 9-9, paragraph (1), item (iii) consists of fire mutual aid cooperatives and there is only one federation throughout the country.

Article 27(1)Founder must hold an organizational meeting after preparing the articles of incorporation, and notifying them together with the date and place of the meeting to the public.

(2)The public notice set forth in the preceding paragraph must be given by at least two weeks prior to the date of the meeting.

(3)The approval of the articles of incorporation prepared by the founders, establishment of business plan and decisions on any other matters necessary for the formation must be based on decisions made at the organizational meeting.

(4)The articles of incorporation set forth in the preceding paragraph may be amended at the organizational meeting; provided, however, that this does not apply to provisions concerning the district and the qualifications for membership.

(5)A decision at the organizational meeting is made by more two-thirds of the voting rights, with more than half of those who are qualified to be partner and who have given consent to the formation to the founders present, by the date of the meeting.

(6)When there has been a resolution for the postponement or continuation of the organizational meeting, the public notice under the provisions of paragraph (1) is not be required.

(7)Minutes must be taken with regard to the proceedings of the organizational meeting, pursuant to the provisions of order of the competent ministry.

(8)With regard to the organizational meeting, the provisions of Article 11 apply mutatis mutandis; and with regard to an action for declaratory judgment on the nonexistence or invalidity of or an action for rescission of a resolution of the organizational meeting, Article 830, Article 831, Article 834 (limited to the part pertaining to item (xvi) and item (xvii)), Article 835, paragraph (1), Article 836, paragraph (1) and paragraph (3), Article 837, Article 838, and Article 846 (Action for Declaratory Judgment on Nonexistence or Invalidity of or Action for Revocation of a Resolution of a Shareholders Meeting) (excluding the part pertaining to company auditors in the case of a cooperative prescribed in Article 36-3, paragraph (4) of this Act whose articles of incorporation provide that the scope of audits conducted by auditors is limited to those concerning accounting [hereinafter referred to as "cooperative limiting the audit authority"]) of the Companies Act apply mutatis mutandis.

Article 27-2(1)The founders must, without delay after the conclusion of the organizational meeting, submit the articles of incorporation, business plan, and documents stating the names and address of the officers and other necessary matters to an administrative authority, pursuant to the provisions of order of the competent ministry, and obtain approval for the formation.

(2)With regard to the formation of a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i), the founders must submit, in addition to the documents set forth in the preceding paragraph, a document stating the type and method of the operations and the names of the officers that engage in daily business and any other documents specified by order of the competent ministry.

(3)With regard to the formation of a fire mutual aid cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (iii), the founders must submit, in addition to the documents set forth in paragraph (1), a document stating the matters specified by order of the competent ministry concerning the implementation method of the fire mutual aid business, mutual aid contracts, mutual aid premiums, and the calculation method of the amount of liability reserve (hereinafter referred to as "fire mutual aid rules"), a document stating the names of the officers that engage in daily business, and any other documents specified by order of the competent ministry.

(4)With regard to the formation of a cooperative other than the cooperatives prescribed in the preceding two paragraphs, an administrative authority must grant the approval under paragraph (1), except in either of the following cases:

(5)With regard to the formation of a cooperative prescribed in paragraph (2), an administrative authority must grant the approval under paragraph (1), except in any of the following cases:

(6)With regard to the formation of a cooperative prescribed in paragraph (3), an administrative authority must grant the approval under paragraph (1), except in any of the following cases:

Article 28The founders must, without delay after obtaining the approval under paragraph (1) of the preceding Article, hand over the functions of the cooperative to the directors.

Article 29(1)The directors must, without delay after taking over the functions of the cooperative pursuant to the provisions of the preceding Article, have each member make the first payment of the contribution.

(2)The amount of the first payment set forth in the preceding paragraph must not be less than one-fourth of the unit amount of contribution.

(3)A person making a contribution in kind must, on the date of the first payment, provide the whole property to be contributed; provided, however, that this does not preclude the person from completing acts such as registration, establishment or transfer of relevant rights necessary for duly asserting against a third party after the cooperative has been established.

(4)Notwithstanding the provisions of paragraph (1) and paragraph (2), in the case of a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i), the directors must, without delay after taking over the functions of the cooperative pursuant to the provisions of the preceding Article, have each member make a payment of the full amount of the contribution.

Article 30A cooperative is established by completing the registration of formation at the location of its principal office.

Article 31A fire mutual aid cooperative, a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i) or item (iii) must notify an administrative authority of its incorporation within two weeks from the date of incorporation.

Article 32With regard to an action to invalidate the formation of a cooperative, the provisions of Article 828, paragraph (1) (limited to the part pertaining to item (i)) and paragraph (2) (limited to the part pertaining to item (i)), Article 834 (limited to the part pertaining to item (i)), Article 835, paragraph (1), Article 836, paragraph (1) and paragraph (3), Articles 837 to 839, and Article 846 (Action to Invalidate Formation) (excluding the part pertaining to company auditors, in the case of a cooperative limiting the audit authority) of the Companies Act apply mutatis mutandis.

Article 33(1)The articles of incorporation of a cooperative must state or record therein the following particulars (excluding the particulars set forth in item (viii) pertaining to mutual aid business [including the business incidental thereto] in the case of a cooperative engaged in mutual aid business, and excluding the particulars set forth in item (iii) and item (viii) in the case of a joint enterprise cooperative):

(2)In addition to the particulars prescribed in the preceding paragraph, the articles of incorporation of a cooperative engaged in mutual aid business must state or record therein particulars concerning a reduction in the amount of mutual aid money and the additional collection of mutual aid premiums.

(3)In addition to the particulars set forth in the preceding two paragraphs, the articles of incorporation of a cooperative must state or record therein the duration of the cooperative or the grounds for its dissolution if the cooperative has set the duration or grounds, the name of the person making a contribution in kind, the property to be contributed, the value thereof, and the number of units of contribution deemed to be offered by making the contribution in kind if any person is making a contribution in kind to the cooperative, and the property promised to be received by transfer after the incorporation of the cooperative, the value thereof and the name of the transferor if there is any property.

(4)As the method of public notice, a cooperative may, in addition to the method of posting the notice at the office of the cooperative, specify any one of the following methods in its articles of incorporation:

(5)When a cooperative specifies in its articles of incorporation that it specifies the method set forth in item (iii) of the preceding paragraph as its method of public notice, it is sufficient to specify in the articles of incorporation that electronic public notice will be the method of public notice.In this case, either of the methods set forth in item (i) or item (ii) of that paragraph may be specified as the method of public notice in the case where the public notice may not be given by way of electronic public notice due to an accident or any other unavoidable circumstances.

(6)When a cooperative gives public notice by way of electronic public notice, it must give the public notice by way of electronic public notice on a continuous basis until the dates prescribed in the following items for the categories of public notice set forth in the relevant items:

(7)With regard to the case where a cooperative gives public notice under the provisions of this Act or other Acts by way of electronic public notice, the provisions of Article 940, paragraph (3) (Interruption of Electronic Public Notice), Article 941, Article 946, Article 947, Article 951, paragraph (2), Article 953 and Article 955 (Investigation of Electronic Public Notice, etc.) of the Companies Act apply mutatis mutandis.In this case, the phrase "Notwithstanding the provisions of the preceding two paragraphs, during the period in which public notice must be given by way of electronic public notice pursuant to these provisions" in Article 940, paragraph (3) of the Act is deemed to be replaced with "Notwithstanding the provisions of Article 33, paragraph (6) of the Small and Medium-Sized Enterprise Cooperatives Act, during the period in which public notice must be given by way of electronic public notice pursuant to that paragraph" and any other necessary technical replacement of terms is specified by Cabinet Order.

(8)In addition to the particulras prescribed in paragraphs (1) through (3), the articles of incorporation of a cooperative may state or record therein the partiulars that do not come into effect unless prescribed in its articles of incorporation pursuant to the provisions of this Act or any other particulars that do not violate this Act.

Article 34The following particulars, except for those that must be prescribed by the articles of incorporation, may be prescribed by the constitution of the cooperative:

Article 34-2(1)A cooperative must keep the articles of incorporation and the constitution (the articles of incorporation, the constitution and the mutual aid rules or fire mutual aid rules, in the case of a cooperative engaged in mutual aid business) (hereinafter referred to as "articles of incorporation, etc." in this Article) at each office.

(2)Partner and obligees of a cooperative may make the following requests to the cooperative at any time during its business hours.In this case, the cooperative must not refuse the request without reasonable grounds.

(3)With regard to the application of the provisions of paragraph (1) to a cooperative which has taken a measure specified by order of the competent ministry for enabling each office (excluding the principal office) to respond to the request set forth in item (ii) of the preceding paragraph, in the case where the articles of incorporation, etc. have been prepared in the form of an electronic or magnetic record, the term "each office" in that paragraph is deemed to be replaced with "the principal office."

Article 35(1)A cooperative has directors and auditors as its officers.

(2)The fixed number of directors is three or more and the fixed number of auditors is one or more.

(3)Officers are elected at the general assembly, pursuant to the provisions of the articles of incorporation; provided, however, that the officers at the time of formation are elected at the organizational meeting.

(4)At least two-thirds of the fixed number of directors (excluding directors of a joint enterprise cooperative; hereinafter the same applies in this paragraph) must be a partner or an officers of the juridical person that is a partner; provided, however, that at least two-thirds of the fixed number of directors at the time of formation must be persons who intend to become a partner or an officer of juridical persons that intend to become a partner.

(5)Directors of a joint enterprise cooperative must be a partner (excluding specified partner; hereinafter the same applies in this paragraph); provided, however, that the directors at the time of formation must be a person who intend to become a partner.

(6)A cooperative (excluding a credit cooperative and a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1)) whose total number of members (members of the member cooperatives in the case of a federation of cooperatives) exceeds the standard specified by Cabinet Order must have at least one auditor who is not a member of the cooperative nor an officer or employee of a member juridical person of the cooperative, and who has not served as a director or employee of the cooperative nor a director, accounting advisor (when the accounting advisor is a juridical person, a member of the company who is in the position of performing the duties), executive officer or employee of a subsidiary company of the cooperative (meaning a company for which the cooperative owns a majority of voting rights [excluding the voting rights pertaining to the shares whose voting rights may not be exercised for all the matters that are subject to resolution at the shareholders meeting, and including the voting rights pertaining to the shares which is deemed to have the voting rights pursuant to the provisions of Article 879, paragraph (3) of the Companies Act] of all shareholders [including all members of the company]; the same applies hereinafter) during the five years preceding the assumption of the office.

(7)When the positions of more than one-third of the fixed number of directors or auditors have become vacant, the positions must be supplemented within three months.

(8)An officer are elected by way of secret voting.

(9)Voting is carried out with one vote per person.

(10)Notwithstanding the provisions of paragraph (8), the election of an officer may be carried out by recommending nominees if no attendant of the meeting has an objection.

(11)In the case of using nomination method, the assembly (the organizational meeting in the case of electing officers at the time of formation) is consulted as to whether a nominee may be approved as the elected person, and the nominee is elected on gaining the consent of all attendants.

(12)In the case of electing two or more directors or auditors in a single election, the provisions set forth in the preceding paragraph must not be applied by way of dividing the nominees.

(13)Notwithstanding the provisions of paragraph (3), officers may be appointed at the assembly (the organizational meeting in the case of the appointment of officers at the time of formation), pursuant to the provisions of the articles of incorporation.

Article 35-2When changes are made to the name or address of any of its officers, a cooperative must notify an administrative authority of the changes within two weeks from the date of the change.

Article 35-3The relationship between a cooperative and its officers is governed by the provisions on mandate.

Article 35-4(1)The following persons may not become an officer:

(2)In addition to the persons set foth in the items of the preceding paragraph, a person who had been ordered to commence bankruptcy proceedings, and whose rights have not been restored may not become an officer of a cooperative engaged in mutual aid business.

Article 36(1)The term of office of a director is a period specified by the articles of incorporation not exceeding two years.

(2)The term of office of an auditor is a period specified by the articles of incorporation not exceeding four years.

(3)Notwithstanding the provisions of the preceding two paragraphs, the term of office of an officer at the time of formation is a period decided at the organizational meeting; provided, however, that the period must not exceed one year.

(4)The provisions of the preceding three paragraphs do not preclude a cooperative from extending the term of office set forth in any of the preceding three paragraphs until the last day of the general assembly relating to the final accounting period during the term of office, based on the articles of incorporation.

(5)Notwithstanding the provisions of the preceding three paragraphs, in the case where the articles of incorporation have been changed so as to abolish the provisions of the articles of incorporation that had limited the scope of audits conducted by auditors to those concerning accounting, the term of office of auditors expires at the time when the changes to the articles of incorporation become effective.

Article 36-2Where there are no officers in office, or where there is a vacancy which results in a shortfall in the number of officers prescribed in this Act or the association of incorporation, an officer who has retired or resigned from office due to the expiration of the term of office continues to have the rights and obligations of an officer until a newly elected officer assumes the office.

Article 36-3(1)A director must faithully perform the duties for the cooperative, observing laws and regulations, the articles of aincorporation, the constitution and resolutions of the assembly.

(2)An auditor audits the execution of the duties of the directors.In this case, the auditor must prepare an audit report, pursuant to the provisions of order of the competent ministry.

(3)With regard to directors, the provisions of Article 357, paragraph (1) of the Companies Act, Article 360, paragraph (1) of that Act apply mutatis mutandis pursuant to the provisions of paragraph (3) of that Article, and Article 361 of that Act following the deemed replacement of terms; and with regard to auditors, the provisions of Article 343, paragraph (1) and paragraph (2), Article 345, paragraphs (1) through (3), Article 381 (excluding paragraph (1)), Article 382, the main clause of Article 383, paragraph (1), Article 383, paragraph (2) and paragraph (3), and Articles 384 through 388 of that Act apply mutatis mutandis.In this case, the term "accounting advisors" in Article 345, paragraph (1) and paragraph (2) of that Act is deemed to be replaced with "auditors," the term "the directors (or, for a company with board of directors, to the board of directors)" in Article 382 of that Act is deemed to be replaced with "the council," the term "Order of the Ministry of Justice" in Article 384 of that Act is deemed to be replaced with "order of the competent ministry," the terms "company with auditors (including a stock company whose articles of incorporation provide that the scope of the audit by its company auditors is limited to an audit related to accounting)" and "company with auditors" in Article 388 of that Article is deemed to be replaced with "cooperative," and any other necessary technical replacement of terms is specified by Cabinet Order.

(4)A cooperative (excluding a cooperative requiring an audit by an accounting auditor prescribed in Article 40-2) whose total number of partners (partners of the member cooperatives in the case of a federation of cooperatives) does not exceed the standard specified by Cabinet Order under Article 35, paragraph (6) may provide in the articles of incorporation that the scope of audits conducted by its auditors is limited to those concerning accounting, notwithstanding the provisions of paragraph (2).

(5)With regard to a cooperative whose articles of incorporation have the provisions as prescribed in the preceding paragraph, the provisions of Article 353, Article 360, paragraph (1) and Article 364 of the Companies Act apply mutatis mutandis to its directors, and the provisions of Article 389, paragraphs (2) through (7) of that Act apply mutatis mutandis to its auditors.In this case, the term the "Ministry of Justice Order" in Article 389, paragraph (2), paragraph (3) and paragraph (4), item (ii) is deemed to be replaced with "order of the competent ministry" and any other necessary technical replacement of terms is specified by Cabinet Order.

(6)The provisions of the preceding three paragraphs (excluding the part pertaining to the provisions of Article 360, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to the provisions of paragraph (3) of that Act following the replacement of terms, as applied mutatis mutandis pursuant to the provisions of paragraph (3) of that Article) do not apply to a credit cooperative and a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i).

Article 36-4Deleted.

Article 36-5(1)A cooperative must set up a council.

(2)A council is formed by all directors.

(3)Handling of the functions of a cooperative is decided by its council.

Article 36-6(1)A resolution of the council is adopted by a majority (in the case where a higher proportion is prescribed by the articles of incorporation or the constitution, the relevant proportion or more) of the directors present where the majority (in the case where a higher proportion is prescribed by the articles of incorporation or the constitution, the relevant proportion or more) of the directors entitled to participate in the vote are present.

(2)A director with a special interest in the resolution set forth in the preceding paragraph may not participate in the vote.

(3)A cooperative may allow directors to participate in votes of the council in writing or by electronic or magnetic means, pursuant to the provisions of the articles of incorporation.

(4)A cooperative may prescribe in its articles of incorporation that, in the case where a director has made a proposal regarding a matter that is subject to a resolution of the council, if all directors (limited to those who are able to participate in the vote regarding the matter) have manifested their intention to agree with the proposal in writing or by way of an electronic or magnetic record (except when an auditor has objection to the proposal in the case of a cooperative other than a cooperative limiting the audit authority), the council is deemed to have adopted a resolution approving the proposal.

(5)When a director has notified all directors of the partiulars to be reported to the council, the particulars are not required to be reported to the council.

(6)The provisions of Article 366 (Convenor), Article 367 (Request for Calling of Meeting by Shareholders) and Article 368 (Calling Procedures) of the Companies Act apply mutatis mutandis to convocation of the council.In this case, any necessary technical replacement of terms is specified by Cabinet Order.

Article 36-7(1)Minutes are taken with regard to the proceedings of the council meeting, pursuant to the provisions of order of the competent ministry, and if the minutes are prepared in writing, the directors and auditors present at the meeting must affix their seals next to their names.

(2)With regard to the particulars recorded in an electronic or magnetic record in cases where the minutes under the preceding paragraph are prepared in the form of an electronic or magnetic record, a measure in lieu of the signing or affixing seals next to the names that is specified by order of the competent ministry must be taken.

(3)A cooperative must, for a period of ten years from the date of the council meeting (including the date on which the council is deemed to have adopted a resolution pursuant to the provisions of paragraph (4) of the preceding Article; the same applies in the following paragraph), keep the document or electronic or magnetic record stating or recording the minutes under paragraph (1) or the manifestation of intention under paragraph (4) of that Article (hereinafter referred to as the "minutes, etc." in this Article) at its principal office.

(4)A cooperative must, for a period of five years from the date of the council meeting, keep a copy of the minutes, etc. at its secondary offices; provided, however, that this does not apply when the minutes, etc. have been prepared in the form of an electronic or magnetic record and the cooperative has taken a measure specified by order of the competent ministry for enabling secondary offices to respond to the request set forth in item (ii) of the following paragraph.

(5)Partner and obligees of a cooperative may make the following requests to the cooperative at any time during its business hours.In this case, the cooperative must not refuse the request without reasonable grounds.

Article 36-8(1)The council must select a director representing the cooperative (hereinafter referred to as a "representative director") from among the directors.

(2)The representative director has the authority to carry out acts in or out of court concerning the functions of the cooperative.

(3)With regard to the representative director, the provisions of Article 36-2 of this Act, Article 44, paragraph (1), Article 54, and Article 55 of the Civil Code (Act No. 89 of 1896), and Article 354 of the Companies Act apply mutatis mutandis.

Article 37(1)No auditor may concurrently hold the position of a director or an employee of the cooperative.

(2)None of the following persons may become a director of the cooperative:

Article 38(1)In any of the following cases, a director must disclose the significant facts concerning the relevant transaction at the council and obtain its approval:

(2)The provisions of Article 108 of the Civil Code do not apply to a transaction under item (i) of that paragraph that has been approved under the preceding paragraph.

(3)A director who has carried out a transaction under either of items of paragraph (1) must report to the council the significant facts concerning the transaction without delay after the transaction.

Article 38-2(1)When an officer has neglected their duties, the officer is liable to compensate the cooperative for any damages that have been caused.

(2)When an officer neglects the duties set forth in the preceding paragraph based on a resolution of the council, the directors who agreed to the resolution are deemed to have engaged in the relevant conduct.

(3)A director who has participated in the resolution set forth in the preceding paragraph and whose objection is not kept in the minutes is presumed to have agreed to the resolution.

(4)An officer may not be exempted from the liability set forth in paragraph (1) without the consent of all partners.

(5)Notwithstanding the provisions of the preceding paragraph, if an officer performs their duties in good faith and without gross negligence, the officer may be exempted from the liability set forth in paragraph (1), based on a resolution of the assembly, within a limit of the amount obtained by subtracting, from the amount of the liability for damages, an amount obtained by multiplying an amount equivalent to the amount of annual economic benefit that the officer has received or should receive from the cooperative during their office as a consideration for execution of their duties, which has been calculated by the method specified by order of the competent ministry, by one of the numbers prescribed in the following items for the respective categories of officers prescribed therein:

(6)In the case set forth in the preceding paragraph, a director must disclose the following particulars set forth in that paragraph at the assembly:

(7)In order for a director of a cooperative other than a cooperative limiting the audit authority to submit a proposal concerning immunity from liability (limited to immunity of a director from liability) under paragraph (1) to the assembly, the director must gain the consent of the respective auditors.

(8)In the case where a resolution under paragraph (5) has been adopted, the cooperative must obtain the approval of the assembly when it provides the officer under that paragraph with a retirement bonus or any other economic benefit specified by order of the competent ministry after the resolution.

(9)Notwithstanding the provisions of paragraph (4), with regard to the liability under paragraph (1), the provisions of Article 426 (excluding paragraph (4)) and Article 427 of the Companies Act apply mutatis mutandis.In this case, the phrase "the consent of a majority of the directors (excluding the directors subject to the liability) (or, for companies with board of directors, by resolution of the board of directors)" in Article 426, paragraph (1) of that Act is deemed to be replaced with "a resolution of the council," the phrase "consent to exempt the liability (or, for a company with a board of directors, a resolution of the board of directors) to the effect that" in paragraph (3) of that Article is deemed to be replaced with "a resolution of the council to exempt the liability," and any other necessary technical replacement of terms is specified by Cabinet Order.

Article 38-3(1)When an officer performs their duties in bad faith and gross negligence, the officer is liable to compensate a third party for any damages that have been caused.

(2)The provisions of the preceding paragraph also apply when the persons prescribed in the following items have committed the acts prescribed in the respective items; provided, however, that this does not apply if the persons have proved that they did not fail to exercise due care with respect to the performance of their duties:

Article 38-4In the case where an officer is liable to compensate the cooperative or a third party for any damages that have been caused, if any other officers are also liable to compensate for the damages, the persons are joint and several obligors.

Article 39With regard to an action to enforce liability of an officer, the provisions of Part VII, Chapter II, Section 2 (excluding Article 867, paragraph (2), Article 849, paragraph (2), item (ii) and paragraph (5), and Article 851) (Action to Enforce Liability, etc. at a Stock Company) of the Companies Act apply mutatis mutandis.In this case, the term "Ministry of Justice Order" in Article 847, paragraph (1) and paragraph (4) of that Act is deemed to be replaced with "order of the competent ministry," and any other necessary technical replacement of terms is specified by Cabinet Order.

Article 40(1)A cooperative must prepare a balance sheet as of the date of its formation, pursuant to the provisions of order of the competent ministry.

(2)A cooperative must prepare an inventory of assets, a balance sheet, a profit and loss statement, and a proposed appropriation of surplus or a proposed disposition of loss (hereinafter referred to as "settlement-related documents") and a business report pertaining to each business year, pursuant to the provisions of order of the competent ministry.

(3)Settlement-related documents and a business report may be prepared in the form of electronic or magnetic records.

(4)A cooperative must, for a period of ten years from the date on which settlement-related documents are prepared, retain the settlement-related documents.

(5)Settlement-related documents and a business report under paragraph (2) must be audited by an auditor, pursuant to the provisions of order of the competent ministry.

(6)Settlement-related documents and a business report that have been audited by an auditor pursuant to the provisions of the preceding paragraph must be approved by the council.

(7)When giving a notice of the general assembly, the directors must provide partner with settlement-related documents and a business report approved under the preceding paragraph (including an audit report, or in the case paragraph (1) of the following Article is applicable, an accounting audit report), pursuant to the provisions of order of the competent ministry.

(8)The directors must submit or provide settlement-related documents and a business report to the general assembly by attaching a document stating the opinion of the auditor or an electronic or magnetic record including the particulars to be stated in the document, and seek its approval.

(9)The directors must report on the contents of the business report submitted or provided to the general assembly pursuant to the provisions of the preceding paragraph.

(10)A cooperative must keep the settlement-related documents and the business report of each business year at its principal office for a period of five years from the day two weeks prior to the date of the relevant general assembly.

(11)A cooperative must keep copies of the settlement-related documents and the business report at its principal office for a period of three years from the day two weeks prior to the date of the general assembly; provided, however, that this does not apply when the settlement-related documents and the business report have been prepared in the form of electronic or magnetic records and the cooperative has taken a measure specified by order of the competent ministry that enables secondary offices to respond to the requests set forth in item (iii) and item (iv) of the following paragraphv:

(12)Partners and obligees of a cooperative may make the following requests to the cooperative at any time during its business hours; provided, however, that the partners and obligees must pay a fee specified by the cooperative when making a request set forth in item (ii) or item (iv):

(13)The provisions of the preceding paragraphs do not apply to a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i).

Article 40-2(1)A cooperative engaged in mutual aid business whose scale of business exceeds the standards specified by Cabinet Order must be audited, not only by an auditor, but also by a financial auditor with regard to settlement-related documents prepared pursuant to the provisions of paragraph (2) of the preceding Article, pursuant to the provisions of order of the competent ministry.

(2)With regard to a cooperative for which an audit by a financial auditor prescribed in the preceding paragraph is required, the provisions of Article 439 and Article 444 (excluding paragraph (3)) of the Companies Act apply mutatis mutandis.In this case, the term " Ministry of Justice Order" in Article 439 and Article 444, paragraph (1), paragraph (4) and paragraph (6) of that Act is deemed to be replaced with "order of the competent ministry," the term "its subsidiaries" in paragraph (1) of that Article is deemed to be replaced with "its subsidiaries, etc. (meaning subsidiaries, etc. prescribed in Article 61-2, paragraph (2) of the Small and Medium-Sized Enterprise Cooperatives Act)," and the phrase "may, pursuant to" in that paragraph is deemed to be replaced with "must, pursuant to," and any other necessary technical replacement of terms is specified by Cabinet Order.

(3)With regard to a financial auditor, the provisions of Article 35-3 of this Act and Article 329, paragraph (1), Article 337, Article 338, paragraph (1) and paragraph (2), Article 339, Article 340, paragraphs (1) through (3), Article 344, paragraph (1) and paragraph (2), Article 345, paragraphs (1) through (3), Article 396, paragraphs (1) through (5), Article 397, paragraph (1) and paragraph (2), Article 398, paragraph (1) and paragraph (2), and Article 399, paragraph (1) of the Companies Act apply mutatis mutandis.In this case, the term "accounting advisor" in Article 345, paragraph (1) and paragraph (2) of that Act is deemed to be replaced with "accounting auditor," the term "Ministry of Justice Order" in Article 396, paragraph (1) and paragraph (2), item (ii) of that Act is deemed to be replaced with "order of the competent ministry," and any other necessary technical replacement of terms is specified by Cabinet Order.

(4)With regard to the liability of a financial auditor, the provisions of Articles 38-2 through 38-4 apply mutatis mutandis. In this case, the term "auditor" in Article 38-2, paragraph (5), item (iii) is deemed to be replaced with an "auditor or financial auditor," the term "audit report" in Article 38-3, paragraph (2), item (ii) is deemed to be replaced with an "audit report or financial audit report," the term "an officer" in Article 38-4 is deemed to be replaced with "a financial auditor," the term "any other officers" in that Article is deemed to be replaced with "any officer or financial auditor," and any other necessary technical replacement of terms is specified by Cabinet Order.

(5)With regard to an action to enforce the liability of a financial auditor, the provisions of Article 39 apply mutatis mutandis.In this case, any necessary technical replacement of terms is specified by Cabinet Order.

Article 40-3(1)Where there is no financial auditors in office, or where there is a vacancy which results in a shortfall in the number of financial auditors prescribed in the articles of incorporation, if a financial auditor is not appointed without delay, an auditor must appoint a person who is to perform the duties of a financial auditor temporarily.

(2)With regard to a person who is to perform the duties of a financial auditor temporarily under the preceding paragraph, the provisions of Article 337 and Article 340, paragraphs (1) through (3) of the Companies Act apply mutatis mutandis.

Article 41(1)A cooperative must prepare accurate accounting books in a timely manner, pursuant to the provisions of order of the competent ministry.

(2)A cooperative must retain its accounting books and important materials regarding its business for a period of ten years from the closing date of the account books.

(3)Partners may, by gaining the consent of three-hundredths or more (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion) of all partners, make the following requests to the cooperative at any time during its business hours.In this case, the cooperative must not refuse the request without reasonable grounds.

(4)The provisions of paragraph (1) do not apply to a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i).

(5)With regard to the application of the provisions of paragraph (3) to a cooperative engaged in mutual aid business and a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i), the term "three-hundredths" in the paragraph (3) is deemed to be replaced with "one-tenth."

Article 42(1)A member may request an election of officers under the joint signature of one-fifth or mor of all partners (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion), and when a majority of the attendants have agreed with the request at the assembly, the officers pertaining to the request lose their positions.

(2)A request for an election of officers under the provisions set forth in the preceding paragraph must be made concurrently for all directors or all auditors; provided, however, that this does not apply when the election of officers is requested on the grounds that the officers violate a law or regulation, the articles of incorporation, the constitution, the mutual aid rules or the fire mutual aid rules.

(3)A request for a change of officers under the provisions of paragraph (1) must be made by submitting a document stating the reason for the election of officers to the cooperative.

(4)A person making a request for election of officers under the provisions of paragraph (1) may, in lieu of submitting the document set forth in the preceding paragraph, provide the information to be included in the document set forth in that paragraph by electronic or magnetic means, by gaining the consent of the cooperative, pursuant to the provisions of Cabinet Order.

(5)In the case where a request for election of officers under the provisions of paragraph (1) has been made (limited to the case where there has been a submission in writing as set forth in paragraph (3)), the directors must submit the request for discussion at the assembly, and send the document under the provisions of paragraph (3) to the officers pertaining to the request by seven days prior to the date of the assembly, and give the officers an opportunity to provide an explanation at the general meeting.

(6)In the case where a request for election of officers under the provisions of paragraph (1) has been made (limited to the case where there has been a submission by electronic or magnetic means as set forth in paragraph (4)), the directors must submit the request for discussion at the assembly, and send a document including the information that has been provided pursuant to the provisions of paragraph (4) to the officers pertaining to the request by seven days prior to the date of the assembly, and give the officers an opportunity to provide an explanation at the general meeting.

(7)In the case prescribed in the preceding paragraph, the cooperative may, in lieu of sending the document set forth in that paragraph, provide the information that have been provided pursuant to the provisions of paragraph (4) by electronic or magnetic means, by gaining the consent of the officers pertaining to the request, pursuant to the provisions of Cabinet Order.

(8)With regard to the case set forth in paragraph (5) or paragraph (6), the provisions of Article 74, paragraph (2) and Article 48 apply mutatis mutandis.In this case, the term "When a member has requested a convocation of the assembly by submitting a document including the particulars to be discussed at the meeting and the reason for the convocation to the council, by gaining the consent of one-fifth or more of all partners (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion)" in Article 47, paragraph (2) and the phrase "when the member has gained the consent of one-fifth or more of all partners (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion)" in the second sentence of Article 48 is deemed to be replaced with "when there has been a request for election of officers pursuant to the provisions of Article 42, paragraph (1)."

Article 43A cooperative may designate a person with the relevant expertise as an advisor by a resolution of the council, and ask for an advice regarding important matters of the cooperative at any time; provided, however, that the advisor may not represent the cooperative.

Article 44(1)A cooperative may appoint a counselor and a chief accountant by a resolution of the council, and have the persons perform their functions at its principal office or any of its secondary offices.

(2)With regard to a counselor the provisions of Article 11, paragraph (1) and paragraph (3) (Manager's Authority to Represent), Article 12 (Non-Competition by Managers), and Article 13 (Apparent Managers) of the Companies Act apply mutatis mutandis.

Article 45(1)A member may request the cooperative to dismiss a counselor or a chief accountant, by gaining the consent of one-tenth or more of all partners (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion).

(2)A request under the provisions set forth in the preceding paragraph must be made by submitting a document stating the reason for dismissal to the cooperative.

(3)A person making a request for dismissal under the provisions of paragraph (1) may, in lieu of the submission of the document set forth in the preceding paragraph, provide the information to be included in the document set forth in that paragraph by electronic or magnetic means, by gaining the consent of the cooperative, pursuant to the provisions of Cabinet Order.

(4)In the case where a request under the provisions of paragraph (1) has been made, the council must decide whether or not to dismiss the counselor or the chief accountant.

(5)In the case where the documents set forth in paragraph (2) are submitted, the directors must send the document set forth in paragraph (2) to the counselor or the chief accountant by seven days prior to the date on which the decision concerning dismissal under the preceding paragraph is decided, and give the counselor or the chief accountant an opportunity to provide an explanation.

(6)In the case where there has been a submission by electronic or magnetic means as set forth in paragraph (3), the directors must send a document including the information that has been provided pursuant to the provisions of paragraph (3) to the counselor or the chief accountant by seven days prior to the date on which dismissal under paragraph (4) is decided, and give the counselor or the chief accountant an opportunity to provide an explanation.

(7)In the case prescribed in the preceding paragraph, the cooperative may, in lieu of sending the document set forth in that paragraph, provide the information that has been provided pursuant to the provisions of paragraph (3) by electronic or magnetic means, by gaining the consent of the counselor or the chief accountant pertaining to the request, pursuant to the provisions of Cabinet Order.

Article 46The general assembly must be convened once in a business year, pursuant to the provisions of the articles of incorporation.

Article 47(1)The extraordinary general assembly may be convened at any time as needed pursuant to the provisions of the articles of incorporation.

(2)When a member has requested the convocation of the general assembly by submitting a document including the particulars to be discussed at the meeting and the reason for the convocation to the council, by gaining the consent of one-fifth or more of all partners (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion), the council must decide to convene the extraordinary general assembly within twenty days from the request date.

(3)In the case set forth in the preceding paragraph, if the exercise of voting rights by electronic or magnetic means is specified pursuant to the provisions of the articles of incorporation, the matters and the reason to be stated in the document may be submitted by electronic or magnetic means, in lieu of the submission of the document.In this case, the member is deemed to have submitted the document.

(4)The particulars and the reason to be stated in the document provided by electronic or magnetic means (excluding a method specified by order of the competent ministry) as set forth in the first sentence of the preceding paragraph is deemed to have arrived at the council at the time when they have been recorded onto a file in a computer used by the council.

Article 48A member who has made a request under the provisions of paragraph (2) of the preceding Article may convene the general meeting by obtaining the approval of an administrative authority, when no director has instigated the procedure for calling the assembly within ten days from the day on which the member has made the request under that paragraph. The same applies when there is no person to perform the duties of a director and when the member has gained the consent of or more one-fifth of all partners (in the case where a lesser proportion is prescribed in the articles of incorporation, the relevant proportion).

Article 49(1)The general assembly must be convened in accordance with the method prescribed in the articles of incorporation, by indicating the particulars to be discussed at the meeting by ten days prior to the date of the meeting (in the case where a lesser period is prescribed in the articles of incorporation, the relevant period).

(2)The convocation of the general assembly is decided by the council, unless otherwise provided for in this Act.

(3)Notwithstanding the provisions of paragraph (1), the general assembly may be held without undergoing the procedure for convocation when the consent of all the partners is obtained.

Article 50(1)It is sufficient that a notice or demand to be issued to a member by a cooperative is sent to the address of the person stated or recorded in the member registry (in the case where the person has notified the cooperative of a different place or contact address for the receipt of a notice or demand, to the place or contact address).

(2)The notice or demand set forth in the preceding paragraph is deemed to have arrived at the time when the notice or demand should normally have arrived.

Article 51(1)The following particulars must be decided at the general assembly:

(2)A change to the articles of incorporation (excluding a change to the particulars specified by Cabinet Officer Order in the case of a change to the articles of incorporation of a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i)) does not become effective without the approval of an administrative authority.

(3)With regard to the approval under the preceding paragraph, the provisions of Article 27-2, paragraphs (4) to (6) apply mutatis mutandis.

(4)Notwithstanding the provisions of paragraph (1), it may be prescribed in the articles of incorporation that it is not necessary for any change to particulrs set forth in paragraph (1), item (ii) that relates to a minor particulars or any other particulars specified by order of the competent ministry to be decided at the assembly.In this case, the scope of the particulars that do not neeed to be decided at the assembly and the notice, public notice, and any other method for making the changes known to the partners must be prescribed in the articles of incorporation.

Article 52(1)Unless otherwise provided for in this Act or the articles of incorporation or the constitution, a decision at the general assembly is made by a majority of the voting rights of those present, and in the case of a tied vote, the decision is made by the chairperson.

(2)The chairperson is appointed at the general assembly.

(3)The chairperson does not have the right to votes at the general assembly as a member.

(4)The general assembly may only decide the particulars notified in advance pursuant to the provisions of Article 49, paragraph (1); provided, however, that this does not apply in cases where otherwise provided for in the articles of incorporation or in the case prescribed in paragraph (3) of that Article.

Article 53The following partiulars require a majority vote of two-thirds or more of the voting rights of those present where a half or more of all partners are present:

Article 53-2In the case where the director or the auditor is requested by a partner to provide an explanation on a certain matter at the general assembly, the director or the auditor must provide the necessary explanation with respect to the relevant particulars; provided, however, that this does not apply in the case where the particulars are not relevant to the particulars that are the purpose of the general assembly, or in cases where the explanation seriously detrimentes the common interest of the partners, or in any other case specified by order of the competent ministry as a case where the director or the auditor has reasonable grounds.

Article 53-3In the case where a resolution for the postponement or continuation of the general assembly is adopted, the provisions of Article 49 do not apply.

Article 53-4(1)Minutes must be taken with regard to the proceedings of the general assemblies, pursuant to the provisions of order of the competent ministry.

(2)A cooperative must, for a period of ten years from the date of the general assembly, keep the minutes set forth in the preceding paragraph at its principal office.

(3)A cooperative must, for a period of five years from the date of the general assembly, keep a copy of the minutes under paragraph (1) at its secondary offices; provided, however, that this does not apply when the minutes have been prepared in the form of an electronic or magnetic record and the cooperative has taken a measure specified by order of the competent ministry that enables its secondary office to respond to the request set forth in item (ii) of the following paragraph.

(4)Partners and obligees of a cooperative may make the following requests to the cooperative at any time during its business hours.In this case, the cooperative must not refuse the request without reasonable grounds.

Article 54With regard to an action for a declaratory judgment on the nonexistence or invalidity of or an action for revocation of a resolution of the general assembly, Article 830, Article 831, Article 834 (limited to the parts pertaining to item (xvi) and item (xvii)), Article 835, paragraph (1), Article 836, paragraph (1) and paragraph (3), Article 837, Article 838, and Article 846 (Action for Declaratory Judgment on Nonexistence or Invalidity of or Action for Revocation of a Resolution of a Shareholders Meeting) (excluding the part pertaining to company auditors in the case of a cooperative limiting the audit authority) of the Companies Act apply mutatis mutandis.

Article 55(1)A cooperative (excluding a joint enterprise cooperative) whose total number of partners exceeds two hundred persons may establish the member representatives meeting in lieu of the general assembly, pursuant to the provisions of the articles of incorporation.

(2)The representatives must be elected fairly and impartially from among partners according to their address, types of businesses, etc. pursuant to the provisions of the articles of incorporation.

(3)The fixed number of representatives must not be less than one-tenth of the total number of partners (one hundred persons in the case of a cooperative whose total number of partners exceeds one thousand persons) on the date of the election.

(4)With regard to the election of representatives, the provisions of Article 35, paragraph (8) and paragraph (9) apply mutatis mutandis.

(5)The term of office of a representative is a period specified by the articles of incorporation not exceeding three years.

(6)With regard to the member representatives meeting, the provisions concerning the general assembly apply mutatis mutandis.In this case, the phrase "a relative or an employee of the member or another member" in Article 11, paragraph (2) is deemed to be replaced with "another member," and the term "five" in paragraph (5) of that Article is deemed to be replaced with "two."

(7)Notwithstanding the provisions of the preceding paragraph, the member representatives meeting may not elect representatives (excluding the election of a representative for filling a vacancy) nor decide the particulars set forth in Article 53, item (ii) or item (iv) (referred to as "a merger, etc." in the following Article).

Article 55-2(1)The member representatives meeting of a cooperative engaged in mutual aid business or a credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i) may decide on a merger, etc., notwithstanding the provisions of paragraph (7) of the preceding Article, Article 57-2-2, paragraph (1), Article 57-3, paragraph (1) and paragraph (2), Article 62, paragraph (1) and Article 63.

(2)When a cooperative prescribed in the preceding paragraph has decided on a merger, etc. at the member representatives meeting, it must notify the partners of the contents of the resolution within ten days from the date of the resolution.

(3)In the case where a cooperative has given notice under the preceding paragraph, the general assembly may be convened pursuant to the provisions of Article 47, paragraph (2) or Article 48 in order to discuss the particulars pertaining to the notice at the meeting.In this case, the submission of a document under the provisions of Article 47, paragraph (2) or an request for approval in the case set forth in the second sentence of Article 48 must be completed within thirty days from the date of a resolution on the particulars pertaining to the notice at the member representatives meeting.

(4)In the case where the particulars pertaining to the notice were not approved at the general assembly under the preceding paragraph, the resolution concerning the particulars at the member representatives meeting cease to be effective.

Article 56(1)When the general assembly makes a decision to reduce the unit amount of the contribution, the cooperative must, within two weeks from the date of the resolution, prepare an inventory of assets and a balance sheet and keep these at its principal office.

(2)Partners and obligees of a cooperative may make the following requests to the cooperative at any time during its business hours.In this case, the cooperative must not refuse the request without reasonable grounds.

Article 56-2(1)When a cooperative reduces the unit amount of contribution, an obligee of the cooperative may state an objection to the cooperative regarding the reduction in the unit amount of contribution.

(2)In the case set forth in the preceding paragraph, the cooperative must give a public notice on the following particulars in an official gazette, and notify the particulars separately to each known creditor other than depositors, persons who make installment savings, or any other creditors specified by Cabinet Order; provided, however, that the period set forth in item (ii) may not be less than one month:

(3)Notwithstanding the provisions of the preceding paragraph, when a cooperative gives a public notice under the provisions of that paragraph not only in an official gazette, but also by the method of public notice set forth in item (ii) or item (iii) of Article 33, paragraph (4), in accordance with the provisions of the articles of incorporation under the provisions of that paragraph, the cooperative is not be required to give the separate notice under the provisions of the preceding paragraph.

(4)If an obligee has not stated an objection within the period set forth in paragraph (2), item (ii), the obligee is deemed to have approved the reduction in the unit amount of contribution.

(5)If an obligee has stated an objection within the period set forth in paragraph (2), item (ii), the cooperative must make a payment or provide equivalent security to the obligee, or entrust equivalent property to a trust company, etc. (meaning a trust company or a financial institution that engages in trust business [meaning a financial institution approved under Article 1, paragraph (1) of the Act on Provision, etc. of Trust Business by Financial Institutions (Act No. 43 of 1943)]) for the purpose of having the obligee receive the payment; provided, however, that this does not apply if the reduction in the unit amount of contribution poses no risk of harming the obligee.

Article 57With regard to an action for the invalidation of a reduction in the unit amount of the contribution of a cooperative, the provisions of Article 828, paragraph (1) (limited to the parts pertaining to item (v)) and paragraph (2) (limited to the part pertaining to item (v)), Article 834 (limited to the part pertaining to item (v)), Article 835, paragraph (1), Articles 836 through 839, and Article 846 (excluding the part pertaining to company auditors, in the case of a cooperative limiting the audit authority) of the Companies Act apply mutatis mutandis.

Article 57-2In order for a fire mutual aid cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (iii) to make a change to any partiulars prescribed in the fire mutual aid rules, it must obtain the approval of an administrative authority.

Article 57-2-2(1)In order for a business cooperative, small business cooperative, or federation of cooperatives (excluding a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (iii)) engaged in mutual aid business to transfer all or part of its mutual aid business (including business incidental to this business; hereinafter the same applies in this Article), it must do so based on a resolution of the general assembly.

(2)A cooperative prescribed in the preceding paragraph may, by concluding a contract, carry out a transfer of all of its mutual aid contracts, which adopt the same basis for the calculation of the liability reserve, to another cooperative engaged in mutual aid business, based on the resolution of the assembly.

(3)A cooperative prescribed in paragraph (1) may determine that assets pertaining to mutual aid business are transferred based on a contract to transfer mutual aid contracts prescribed in the preceding paragraph.

(4)Notwithstanding the provisions of the preceding two paragraphs, all or part of the business concerning liability mutual aid, etc. and assets pertaining to the business may be transferred to another cooperative engaged in the relevant business.

(5)With regard to the transfer of all or part of the mutual aid business provided in paragraph (1) and the transfer of assets pertaining to the mutual aid business provided in paragraph (3), the provisions of Articles 56 to 57 apply mutatis mutandis.

Article 57-3(1)A credit cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i) (hereinafter referred to as a "credit cooperative, etc." in this Article) may, following a resolution of the general assembly, transfer all or part of its business to a bank, another credit cooperative, etc., a Shinkin bank, or a labor bank (including a federation composed of credit unions or worker's credit unions; the same applies in the following paragraph).

(2)A credit cooperative, etc. may, following a resolution of the general meeting, acquire a part of the business of a bank or all or part of the business of another credit cooperative, etc., a credit union, or a worker's credit union.In this case, a resolution of the assembly is not required if the acquisition cost does not exceed one-fifth of the amount of net assets that the credit cooperative, etc. actually holds based on the final balance sheet.

(3)In the case where a credit cooperative, etc. acquires all or part of the business without the resolution of the general assembly pursuant to the provisions of the second sentence of the preceding paragraph, if at least one-sixth of all partners of the credit cooperative, etc. have notified the credit cooperative, etc. of their opposition to acquire all or part of the relevant business within two weeks from the date of public notice or notice under the provisions of the following paragraph, then a credit cooperative, etc. must obtain an approval to conclude the contract to acquire all or part of the business by a resolution of the general assembly by the day before it acquires all or part of the business.

(4)In the case where a credit cooperative, etc. acquires all or a part of the business without the resolution of the general assembly pursuant to the provisions of the second sentence of the paragraph (2), the credit cooperative, etc. must give a public notice or give a notice to its partners stating that it will acquires all or a part of the business and the name or trade name and the address of the other party to the contract, by twenty days prior to the day on which it acquires all or a part of the business.

(5)A transfer of the activities under paragraph (1) or the acquisition of the business under paragraph (2) does not become effective without the approval of an administrative authority, except for those specified by Cabinet Order.

(6)With regard to a transfer or acquisition of the business as a whole under paragraph (1) and paragraph (2), the provisions of Article 57 apply mutatis mutandis.

(7)In the case where a credit cooperative, etc. has succeeded to the rights and obligations based on a contract (limited to one where the operations related to the contract pertain to acts prescribed in Article 2, paragraph (2) [Definitions, etc.] of the Banking Act [Act No. 59 of 1981]; hereinafter the same applies in this paragraph) as a result of the acquisition of all or part of the business under paragraph (2), if the contract falls under the category of operations that cannot be carried out by the credit cooperative, etc. or is restricted for the credit cooperative, etc. due to a law or regulation concerning the business of the credit cooperative, etc., the credit cooperative, etc. may continue the operations related to the contract until the specified period expires if a period is specified by the contract, and for a period not exceeding one year from the date of succession if the period is not specified by the contract.

Article 57-4A fire mutual aid cooperative or a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (iii) may not transfer its business.

Article 57-5A cooperative engaged in mutual aid business and a cooperative other than that engaged in mutual aid business (excluding a credit cooperative and a federation of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (i)) whose total number of partners (partners of the member cooperatives in the case of a federation of cooperatives) exceeds the standards specified by Cabinet Order set forth in Article 35, paragraph (6) must not operate the surplus funds that were accumulated in the course of business except in the case of using any of the following methods; provided, however, that this does not apply when it has obtained the approval of an administrative authority:

Article 57-6The accounting of a cooperative is to compy with accounting practices that are generally accepted as fair and appropriate.

Article 58(1)A cooperative must set aside one-tenth or more (one-fifth in the case of a cooperative engaged in mutual aid business) of its surplus in each business year as a reserve fund until the surplus reaches the amount specified by the articles of incorporation.

(2)The amount of the reserve fund specified by the articles of incorporation under the preceding paragraph must not be less than half of the total amount of contribution (not less than the total amount of contribution in the case of a cooperative engaged in mutual aid business).

(3)The reserve fund under paragraph (1) must not be used except when it is used for compensating for losses.

(4)A cooperative engaged in the business set forth in Article 9-2, paragraph (1), item (iv) or Article 9-9, paragraph (1), item (vi) must carry forward one-twentieth or more of its surplus in each business year to the following business year as funds to be allocated for the expenses of its business.

(5)A cooperative engaged in mutual aid business must calculate the liability reserve and the payment reserve and set these funds aside at the end of each business year.

(6)When a cooperative engaged in mutual aid business offers a contractor rebate (meaning the distribution of all or part of the mutual aid premiums and profits earned from the operation of the money collected as mutual aid premiums that are not allocated to the payment of mutual aid proceeds, refunds, or any other benefits [hereinafter referred to as "mutual aid proceeds, etc."], the operating costs, or any other costs distributed to mutual aid contractors, in the case where the distribution is prescribed by mutual aid rules or fire mutual aid rules; the same applies hereinafter), it must do so in accordance with the standards specified by order of the competent ministry as those ensuring the fair and equitable distribution.

(7)Particulars concerning the accumulation of the liability reserve and the payment reserve set forth in paragraph (5) and the reserve funds to be allocated for contractor rebates set forth in the preceding paragraph, and other particulars necessary for contractor rebates are specified by order of the competent ministry.

Article 58-2(1)A cooperative engaged in mutual aid buiness must separate the accounting for its mutual aid from the accounting for its other businesses.

(2)A cooperative engaged in business concerning liability mutual aid, etc. must separate the accounting for its business concerning liability mutual aid, etc. from the accounting for its other businesses.

Article 58-3A cooperative engaged in mutual aid business must not operate the funds from the account for its mutual aid business to the account for any of its other businesses nor secure with assets under the account for its mutual aid business to raise funds for the account for any of its other business.

Article 58-4In order to contribute to the sound administration of mutual aid business by specified mutual aid associations, fire mutual aid cooperatives, federations of cooperatives engaged in the business set forth in Article 9-9, paragraph (1), item (iii), and specified federations of mutual aid associations, an administrative authority may, by using the following amounts, establish standards as to whether or not the status of the capacity to pay mutual aid proceeds, etc. is appropriate as the standards for determining the soundness of the management of the cooperatives:

Article 58-5A cooperative engaged in mutual aid business must, in addition to what is provided for in this Act and other laws and regulations, explain important matters pertaining to the mutual aid business to its users and take other measures for securing the sound and appropriate management of the mutual aid business, pursuant to the provisions of order of the competent ministry.

Article 58-6(1)A cooperative engaged in mutual aid business (excluding a cooperative that meets the requirements specified by order of the competent ministry) must appoint a mutual aid actuary at the council meeting, and have the mutual aid actuary participate in the calculation method of mutual aid premiums and the matters concerning actuarial calcuations pertaining to other matters specified by order of the competent ministry.

(2)A mutual aid actuary must be a person who meets the requirements specified by order of the competent ministry as a person who has the necessary knowledge and experience of mutual aid actuarial calculation.

Article 58-7(1)At the end of each business year, a mutual aid actuary must confirm the following particulars pursuant to the provisions of order of the competent ministry, and submit a written opinion stating the results thereof to the council:

(2)When a mutual aid actuary has submitted a written opinion set forth in the preceding paragraph to the council, the mutual aid actuary must submit a copy thereof to an administrative authority without delay.

(3)An administrative authority may ask a mutual aid actuary to provide an explanation about the copy of the written opinion under the preceding paragraph or to provide an opinion on any other particulars that fall under the duties of the mutual aid actuary.

(4)In addition to what is provided for in the preceding three paragraphs, particulars necessary for a written opinion under paragraph (1) are specified by order of the competent ministry.

Article 58-8An administrative authority may, when a mutual aid actuary violates this Act or a disposition given by the administrative authority under this Act, order the relevant cooperative to dismiss the mutual aid actuary.

Article 59(1)A cooperative must not distribute its surplus until it has compensated for the loss and deducted the reserve fund under Article 58, paragraph (1) and the balance carried forward under paragraph (4) of that Article.

(2)Any surplus must be distributed according to the amount of the cooperative's services used by the partner (users of fire mutual aid business in the case of a fire mutual aid cooperative) or according to the amount of contribution paid by the partner within a limit not exceeding ten percent of its surplus per year, pursuant to the provisions of the articles of incorporation.

(3)Notwithstanding the provisions set forth in the preceding paragraph, in the case of a joint enterprise cooperative, any surplus must be distributed according to the amount of contribution paid by the partner within a limit not exceeding twenty percent of its surplus per year, and if there is more surplus left, distribute the surplus according to the degree to which the partners (excluding specified partners) engaged in the business of the joint enterprise cooperative, pursuant to the provisions of the articles of incorporation.

Article 60Until the partners complete the payment of their contributions, a cooperative may allocate the surplus to be distributed to its partner foro the payment, pursuant to the provisions of the articles of incorporation.

Article 61A cooperative may not acquire the equity interest held by its members nor receive the equity interest as a pledge.

Article 61-2(1)In each business year, a cooperative engaged in mutual aid business must prepare explanatory documents stating the particulars specified by order of the competent ministry as those concerning the status of the operations and assets, keep these at the offices of the cooperative (excluding offices that are mainly used for activities other than mutual aid activities and any other offices specified by order of the competent ministry; hereinafter the same applies in this Article) and make these available for public inspection.

(2)In the case where a cooperative set forth in the preceding paragraph that requires an audit by a financial auditor pursuant to the provisions of Article 40-2, paragraph (1) is a subsidiary or one having a special relationship specified by order of the competent ministry with the cooperative (hereinafter referred to as "subsidiary company, etc."), the cooperative must, in each business year, prepare, in addition to the explanatory documents set forth in the preceding paragraph, explanatory documents stating the particulars specified by order of the competent ministry as those concerning the status of the operations and assets of the cooperative and the subsidiary company, etc. in a consolidated manner for the cooperative and the subsidiary company, etc., keep these at the offices of the cooperative, and make these available for public inspection.

(3)The explanatory documents prescribed in the preceding two paragraphs may be prepared in the form of electronic or magnetic records.

(4)When the explanatory documents prescribed in paragraph (1) or paragraph (2) have been prepared in the form of electronic or magnetic records, a cooperative may take a measure specified by ordinance of the competent ministry as one for making the information contained in the electronic or magnetic records available to unspecified and large number of persons by electronic or magnetic means, at the offices of the cooperative.In this case, the cooperative is deemed to be keeping the explanatory documents prescribed in these provisions and have made the documents available for public inspection pursuant to these provisions.

(5)In addition to what is provided for in the preceding paragraphs, the period during which the explanatory documents under paragraph (1) or paragraph (2) are made available for public inspection and any other necessary particulars concerning the operation of these provisions are specified by order of the competent ministry.

(6)A cooperative set forth in paragraph (1) must endeavor to disclose the information that would be useful for users of mutual aid activities to learn about the status of the operations and assets of the cooperative and its subsidiary company, etc., in addition to the particulars prescribed in paragraph (1) and paragraph (2).

Article 62(1)A cooperative issolves based on any of the following grounds:

(2)When a cooperative has been dissolved pursuant to the provisions of item (i) or item (iv) of the preceding paragraph, it must notify an administrative authority of the dissolution within two weeks from the date of dissolution.

(3)A fire mutual aid cooperative or a federation of cooperatives engaged in the activities set forth in Article 9-9, paragraph (1), item (iii) is dissolved when the approval set forth in Article 27-2, paragraph (1) is revoked pursuant to the provisions of Article 106-2, paragraph (4) or paragraph (5), in addition to the grounds prescribed in the items of paragraph (1).

(4)A resolution of the dissolution of a cooperative engaged in the activities concerning liability mutual aid, etc., a fire mutual aid cooperative, or a federation of cooperatives engaged in the activities set forth in Article 9-9, paragraph (1), item (iii) does not become effective without the approval of an administrative authority.

Article 63A cooperative may merger with another cooperative, following a resolution of the general assembly.In this case, the cooperatives that merge must conclude a merger agreement.

Article 63-2In the case where a cooperative carries out an absorption-type merger (meaning a merger carried out by a cooperative with another cooperative where the cooperative surviving the merger succeeds to all the rights and obligations of the cooperative dissolved as a result of the merger; hereinafter the same applies in this Chapter), the following particulars must be prescribed in the absorption-type merger agreement:

Article 63-3In the case where two or more cooperatives carry out a consolidation-type merger (meaning a merger carried out by two or more cooperatives where the cooperative that is incorporated in the merger succeeds to all the rights and obligations of the disappearing cooperatives in the merger; hereinafter the same applies in this Chapter), the following particulars must be prescribed in the consolidation-type merger agreement:

Article 63-4(1)A disappearing cooperative in the consolidation-type merger must, during the period from the following dates, whichever is earlier, to the date on which the absorption-type merger becomes effective, keep a document or electronic or magnetic record stating or recording the details of the absorption-type merger agreement and other particulars specified by order of the competent ministry at its principal office:

(2)Partners and obligees of a disapperaing cooperative in absorption-type merger may make the following requests to the disappearing cooperative in the absorption-type merger at any time during its business hours; provided, however, that the partners and obligees must pay a fee specified by the the disappearing cooperative in the absorption-type merger when making a request set forth in item (ii) or item (iv):

(3)A disappearing cooperative in absorption-type merger must have the merger agreement approved by a resolution of the assembly by the day before the effective date.

(4)With regard to a disappearing cooperative in absorption-type merger, the provisions of Article 56-2 apply mutatis mutandis.

(5)A disappearing cooperative in absorption-type merger may change the effective date by agreement with the surviving cooperative in the absorption-type merger.

(6)In the case set forth in the preceding paragraph, the disappearing cooperative in the absorption-type merger must announce the changed effective date to the public by the day prior to the former effective date (the changed effective date in the case where the changed effective date is earlier than the former effective date).

(7)When the effective date is changed pursuant to the provisions of paragraph (5), the provisions of this Article, the following Article, and Article 65 apply mutatis mutandis by deeming the changed effective date to be the effective date.

Article 63-5(1)A surviving cooperative in the absorption-type merger must, during the period from the following dates, whichever is earlier, to the date on which six months have elapsed from the date on which the absorption-type merger becomes effective, keep a document or electronic or magnetic record stating or recording the details of the absorption-type merger agreement and other particulars specified by order of the competent ministry at its principal office:

(2)Partners and obligees of a surviving cooperative in absorption-type merger may make the following requests to the surviving cooperative at any time during its business hours; provided, however, that the partners and obligees must pay a fee specified by the surviving cooperative when making a request set forth in item (ii) or item (iv):

(3)A surviving cooperative in absorption-type merger must obtain the approval for the absorption-type merger agreement by a resolution of the general assembly by the day before the effective date; provided, however, that this does not apply to a merger where the total number of partners of the disappearing cooperative in the absorption-type merger does not exceed one-fifth of the total number of the surviving cooperatives, and the total amount of assets actually held by the disappearing cooperative based on the final balance sheet does not exceed one-fifth of the total amount of assets actually held by the surviving cooperative based on the final balance sheet.

(4)In the case where a surviving cooperative in absorption-type merger carries out a merger without a resolution of the general assembly pursuant to the provisions of the proviso to the preceding paragraph, if at least one-sixth of all the partners of the surviving cooperative have notified the surviving cooperative of their opposition to the merger within two weeks from the date of public notice or notice under the provisions of the following paragraph, then the surviving cooperative must obatain the approval for the absorption-type merger agreement by a resolution of the general assembly by the day before the effective date.

(5)In the case where a surviving cooperative in absorption-type merger carries out a merger without a resolution of the general assembly pursuant to the provisions of the proviso to paragraph (3), the surviving cooperative must give a public notice or give notice to its partner stating that it will carry out a merger and the name and the address of the disappearing cooperative, by twenty days prior to the effective date.

(6)With regard to a surviving cooperative, the provisions of Article 56-2 apply mutatis mutandis.

(7)A surviving cooperative in absorption-type merger must, without delay after the date on which the absorption-type merger becomes effective, prepare a document or an electronic or magnetic record stating or recording the rights and obligations of the disappearing cooperative to which the surviving cooperative has succeeded in the absorption-type merger and any other particulars specified by order of the competent ministry as those concerning the absorption-type merger.

(8)A surviving cooperative in absorption-type merger must keep the document or electronic or magnetic record set forth in the preceding paragraph at its principal office for a period of six months from the date on which the absorption-type merger becomes effective.

(9)Partners and obligees of a surviving cooperative in absorption-type merger may make the following requests to the surviving cooperative at any time during its business hours; provided, however, that the partners and obligees must pay a cost specified by the surviving cooperative when making a request set forth in item (ii) or item (iv):

Article 63-6(1)A disappearing cooperative in consolidation-type merger must, during the period from the following dates, whichever is earlier, to the date of the establishment of the newly formed cooperative in the consolidation-type merger, keep a document or electronic or magnetic record stating or recording the details of the consolidation-type merger agreement and other particulars specified by order of the competent ministry at its principal office:

(2)Partners and obligees of a disappearing cooperative in consolidation-type merger may make the following requests to the disappearing cooperative at any time during its business hours; provided, however, that the partners and obligees must pay a cost specified by the disappearing cooperative when making a request set forth in item (ii) or item (iv):

(3)A disappearing cooperative in consolidation-type merger must obtain approval for consolidation agreement by a resolution of the general assembly.

(4)With regard to a disappearing cooperative in consolidation-type merger, the provisions of Article 56-2 apply mutatis mutandis.

Article 64(1)The provisions of Section 4 (excluding Article 30) do not apply to the incorporation of a newly formed cooperative.

(2)In order to incorporate a cooperative through a merger, organizing committee members whom the respective cooperatives have appointed from among their partners at the general assembly must jointly prepare the articles of incorporation, appoint officers and carry out any other necessary acts for the incorporaton.

(3)The term of office of an officer under the provisions set forth in the preceding paragraph expires on the date of the general assembly.

(4)With regard to the appointment of organizing committee members under the provisions of paragraph (2), the provisions of Article 53 apply mutatis mutandis.

(5)With regard to the appointment of officers under the provisions of paragraph (2), the provisions of the main clause of Article 35, paragraph (4), the main clause of Article 35, paragraph (5), and Article 35, paragraph (6) apply mutatis mutandis.

(6)A newly formed cooperative must, without delay after the date of establishment, prepare a document or an electronic or magnetic record stating or recording the rights and obligations of the disappearing consolidated cooperatives in the consolidated-type merger to which the newly formed cooperative has succeeded by the consolidation-type merger and any other particulars specified by order of the competent ministry as those concerning the consolidation-type merger.

(7)A newly formed cooperative must keep the document or electronic or magnetic record set forth in the preceding paragraph at its principal office for a period of six months from the date of incorporation.

(8)Partners and obligees of a newly formed cooperative may make the following requests to the newly formed cooperative at any time during its business hours; provided, however, that the partners and obligees must pay a cost specified by the newly formed cooperative when making a request set forth in item (ii) or item (iv):

Article 65(1)A surviving cooperative in absorption-type merger succeeds to the rights and obligations of the disappearing cooperative in the absorption-type merger (including the rights and obligations that the cooperative holds with regard to its activities based on a permission, an approval or any other disposition of an administrative authority; the same applies in the following paragraph) on the effective date or the date on which it obtains the approval of an administrative authority set forth in paragraph (1) of the following Article, whichever is later.

(2)A newly formed cooperative in consolidation-type merger succeeds to the rights and obligations of the disappearing cooperative in the consolidation-type merger on the date of its establishment.

Article 66(1)A merger of cooperatives does not become effective without the approval of an administrative authority.

(2)With regard to the approval set forth in the preceding paragraph, the provisions of Article 27, paragraphs (4) to (6) apply mutatis mutandis.

Article 67With regard to an action for the invalidation of a merger, the provisions of Article 828, paragraph (1) (limited to the parts pertaining to item (vii) and item (viii)) and paragraph (2) (limited to the parts pertaining to item (vii) and item (viii)), Article 834 (limited to the parts pertaining to item (vii) and item (viii)), Article 835, paragraph (1), Articles 836 to 839, Article 843 (excluding paragraph (1), item (iii) and item (iv) and the proviso to paragraph (2)), and Article 846 (Action for Invalidation of a Merger) (excluding the parts pertaining to company auditors, in the case of a cooperative limiting the audit authority) of the Companies Act apply mutatis mutandis; and with regard to a motion set forth in Article 843, paragraph (4) of that Act as applied mutatis mutandis pursuant to the provisions of this Article, the provisions of Article 868, paragraph (5), Article 870 (limited to the partts pertaining to item (xv)), the main clause of Article 871, Article 872 (limited to the part pertaining to item (iv)), the main clause of Article 873, Article 875, and Article 876 (Non-Contentious Cases) of the Companies Act.

Article 68(1)When a cooperative has been dissolved, the directors of the cooperative become the liquidators, except in the case of a dissolution based on an order to commence bankruptcy proceedings; provided, however, that this does not apply when another person has been appointed as a liquidator at the general assembly.

(2)When a fire mutual aid cooperative or a federation of cooperatives engaged in the activities set forth in Article 9-9, paragraph (1), item (iii) has been dissolved based on the revocation of the approval set forth in Article 27-2, paragraph (1) under the provisions of Article 106-2, paragraph (4) or paragraph (5), an administrative authority appoints the liquidator, notwithstanding the provisions of the preceding paragraph and the provisions of Article 478, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to the provisions of Article 69, paragraph (1).

Article 68-2(1)When a cooperative engaged in mutual aid activities has been dissolved based on a resolution of the general assembly, revocation of the approval set forth in Article 27-2, paragraph (1) under the provisions of Article 106-2, paragraph (4) or paragraph (5), or a dissolution order under the provisions of Article 106, paragraph (2), it must pay mutual aid money with regard to a mutual aid contract for which grounds for the payment of mutual aid money has occurred within ninety days from the date of dissolution.

(2)When a cooperative under the preceding paragraph has been dissolved based on the grounds set forth in Article 62, paragraph (1), item (iv), it must refund the mutual aid premium for the period from the date of dissolution to the expiration date of the mutual aid contract.

(3)When a cooperative under paragraph (1) has been dissolved based on the grounds set forth in that paragraph, it must refund the mutual aid premium for the period from the day on which the period set forth in that paragraph has elapsed to the expiration date of the mutual aid contract.

Article 68-3The liquidator of a fire mutual aid cooperative or a federation of cooperatives engaged in the activities set forth in Article 9-9, paragraph (1), item (iii) must dispose of the property of the cooperative or the federation according to the following order:

Article 69(1)With regard to the dissolution and liquidation of a cooperative, the provisions of Article 475 (excluding item (i) and item (iii)), Article 476, Article 478, paragraph (2) and paragraph (4), Article 479, paragraph (1) and paragraph (2) (limited to the parts other than those prescribed in the respective items), Article 481, Article 483, paragraph (4) and paragraph (5), Article 484, Article 485, Article 489, paragraph (4) and paragraph (5), Article 492, paragraphs (1) through (3), Articles 499 through 503, Article 507 (Liquidation of a Stock Company), Article 868, paragraph (1), Article 869, Article 870 (limited to the parts pertaining to item (ii) and item (iii)), Article 871, Article 872 (limited to the parts pertaining to item (iv)), Article 874 (limited to the parts pertaining to item (i) and item (iv)), Article 875, and Article 876 (Non-Contentious Cases) of the Companies Act and Article 40 (Judicial Decision for Appointment of a Person to Conduct Inspections) of the Non-Contentious Cases Procedure Act (Act No. 14 of 1898) apply mutatis mutandis; with regard to a liquidator of a cooperative, the provisions of Article 35-3, Article 35-4, Article 36-2, Article 36-3, paragraph (1) and paragraph (2), Articles 36-5 through 38-4 (excluding Article 36-7, paragraph (4)), Article 40 (excluding paragraph (1), paragraph (11), and paragraph (13)), Article 47, paragraphs (2) to (4), Article 48, and Article 53-2 of this Act, the provisions of Article 357, paragraph (1) of the Companies Act, paragraph (1) of that Article as applied mutatis mutandis by replacing the terms pursuant to the provisions of Article 360, paragraph (3) of that Act, and the provisions of Article 361, Article 381, paragraph (2), Article 382, the main clause of Article 383, paragraph (1), Article 383, paragraph (2) and paragraph (3), Articles 384 through 386, and Article 508 of the Companies Act apply mutatis mutandis; with regard to an action to enforce liability of a liquidator of a cooperative, the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2), Article 849, paragraph (2), item (ii) and paragraph (5), and Article 851, and excluding the parts pertaining to the company auditors in the case of a cooperative limiting the audit authority) (Action to Enforce Liability, etc. of a Stock Company) of that Act apply mutatis mutandis; and with regard to a liquidator of a cooperative limiting the audit authority, the provisions of Article 353, Article 360, paragraph (1) and Article 364 of that Act apply mutatis mutandis.In this case, the phrase "an inventory of assets, a balance sheet, a profit and loss statement, and a plan for the appropriation of surplus or a plan for the disposition of losses" in Article 40, paragraph (2) is deemed to be replaced with "an inventory of assets and a balance sheet," the term "a business report" in that paragraph is deemed to be replaced with a "progress report," the term "business report" in paragraph (3), paragraphs (5) to (10), and paragraph (12), item (i) and item (iii) of that Article is deemed to be replaced with a "progress report," the term "the directors (or, for a Company with Board of Directors, to the board of directors)" in Article 382 of the Companies Act is deemed to be replaced with "the board of liquidators," the term "the following shareholders" in the parts of Article 479, paragraph (2) of the Companies Act other than those prescribed in the respective items is deemed to be a " member who has obtained the consent of one-fifth or more of all partners," the term " Ministry of Justice Order" in Article 384, Article 492, paragraph (1), Article 507, paragraph (1), and Article 847, paragraph (1) and paragraph (4) of that Act is deemed to be "order of the competent ministry," the phrase "give public notice in the official gazette" in Article 499, paragraph (1) of that Act is deemed to be replaced with "give public notice," and any other necessary technical replacement of terms is specified by Cabinet Order.

(2)A court supervising the dissolution and liquidation of a cooperative may seek the opinion of or entrust an investigation with an administrative authority supervising the operations of the cooperative.

(3)An administrative authortiy prescribed in the preceding paragraph may state its opinion to the court prescribed in that paragraph.

Article 70Federations of Small Business Associations (hereinafter referred to as "FSBAs") consist of prefectural federations of small business associations (hereinafter referred to as "prefectural FSBAs") and the national federation of small business associations (hereinafter referred to as "national FSBA").

Article 71(1)the FSBA is a juridical person.

(2)The address of the FSBA is the address at which its principal office is located.

Article 72(1)The FSBA must use the following words in its name:

(2)No person other than the FSBA may use in its name a word indicating a prefectural FSBA or the national FSBA.

Article 73(1)There is only one prefectural FSBA in each prefecture, and its district is the district of the prefecture.

(2)There is only one national FSBA throughout the country.

Article 74(1)A prefectural FSBA engage in the following activities:

(2)A prefectural FSBA may make proposal on the particulars concerning cooperatives, etc., FSBAs, and small and medium-sized enterprises to the Diet, a council of a local government, or an administrative authority.

Article 75(1)The national FSBA is to engage in the following activities:

(2)The national FSBA may, when it is necessary to carry out its activities, request a prefectural FSBA to report on the operations or accounting thereof, or provide instructions to a prefectural FSBA regarding the establishment of or a change to the activity plan or any other important matters concerning their operations or accounting, pursuant to the provisions of the articles of incorporation.

(3)With regard to the national FSBA, the provisions of paragraph (2) of the preceding Article apply mutatis mutandis.

Article 75-2The provisions of Article 8, paragraph (1), item (i) and item (iv) of the Act on Prohibition of Private Monopolization do not apply to the activities set forth in the items of Article 47, paragraph (1) and the items of paragraph (1) of the preceding Article carried out by an FSBA; provided, however, that this does not apply to the designation of unfair trade practices or where competition in any particular field of trade is substantially restrained, resulting in unreasonable price increase.

Article 76(1)Persons that are qualified to be a member of a prefectural FSBA are as follows:

(2)persons that are qualified to be a member of the national FSBA are as follows:

Article 77(1)Each member of a prefectural FSBA has a single voting right and the right to elect officers or representatives.

(2)Each member of the national FSBA has a single voting right and the right to elect officers; provided, however, that two or more voting rights or rights to elect may be granted to a person set forth in paragraph (2), item (i) of the preceding Article, within a limit not exceeding one-fiftieth of the total number of voting rights or rights to elect, pursuant to the provisions of the articles of incorporation.

(3)A member may, pursuant to the provisions of the articles of incorporation, exercise the voting right or right to elect in writing or by proxy with regard to the issues that have been notified in advance pursuant to the provisions of Article 49, paragraph (1) as applied mutatis mutandis pursuant to the provisions of Article 82-10, paragraph (4).

(4)A member may, pursuant to the provisions of the articles of incorporation, exercise the voting right by electronic or magnetic means, in lieu of the exercise of the voting right in writing under the provisions set forth in the preceding paragraph.

(5)A person exercising a voting right or right to elect pursuant to the provisions of the preceding two paragraphs is deemed to be an attendant.

(6)In the case of a prefectural FSBA, a proxy may not serve as a proxy for five or more members.

(7)In the case of the national FSBA, a proxy may not exercise voting rights or rights to elect exceeding one-fiftieth of the total number of voting rights or rights to elect on behalf of its members.

(8)A proxy must submit a document proving the authority to represent to the FSBA.In this case, if the exercise of a voting right by electronic or magnetic means is specified pursuant to the provisions of the articles of incorporation, the proxy may prove the authority to represent by electronic or magnetic means, in lieu of the submission of the document.

Article 78(1)An FSBA may impose expenses on its members, pursuant to the provisions of the articles of incorporation.

(2)A member may not duly assert against the FSBA an offset for the payment of expenses set forth in the preceding paragraph.

Article 79(1)When a person qualified to be a member of a prefectural FSBA intends to join a prefectural FSBA, the prefectural FSBA must not, without reasonable grounds, refuse the person to join nor impose more difficult requirements on the person who becomes its member than those imposed when present members joined the prefectural FSBA.

(2)When the national FSBA has been established, all prefectural FSBAs become members thereof. The same applies to a prefectural FSBA that has been established after the establishment of the national FSBA.

(3)With regard to the case where a person set forth in Article 76, paragraph (2), item (ii) or item (iii) intends to join the national FSBA, the provisions of paragraph (1) apply mutatis mutandis.

Article 80(1)A member of a prefectural FSBA or a member of the national FSBA other than a prefectural FSBA may withdraw by giving an advance notice at least thirty days before their withdrawal.

(2)A prefectural FSBA which is a member of the national FSBA withdraws when it is dissolved.

(3)With regard to a member of a prefectural FSBA and a member of the national FSBA other than a prefectural FSBA, the provisions of Article 19 apply mutatis mutandis.

Article 81(1)In order to incorporate an FSBA, eight or more persons who intend to become its members are required to become its founders.In this case, the founders must include five or more persons set forth in Article 76, paragraph (1), item (i) in the case of a prefectural FSBA, and must include five or more prefectural FSBAs in the case of the national FSBA.

(2)A prefectural FSBA may only be incorporated if one-fifth or more of the cooperatives, etc. having their principal offices within its district are to become its members.

(3)The national FSBA may not be incorporated unless twenty-five or more prefectural FSBAs become its members.

Article 82(1)Founders must hold an organizational meeting after preparing the articles of incorporation, and issue a public notice on the articles of incorporation together with the date and place of the meeting.

(2)When a decision on the postponement or continuation of the organizational meeting is made at the organizational meeting, the provisions set forth in the preceding paragraph do not apply.

(3)Minutes must be taken with regard to the proceedings of the organizational meeting, pursuant to the provisions of order of the competent ministry.

(4)With regard to a resolution of the organizational meeting, the provisions of Article 27, paragraphs (2) through (5) and Article 77 apply mutatis mutandis; and with regard to an action for declaratory judgment on the nonexistence or invalidity of or an action for revocation of a resolution of the organizational meeting, Article 830, Article 831, Article 834 (limited to the parts pertaining to item (xvi) and item (xvii)), Article 835, paragraph (1), Article 836, paragraph (1) and paragraph (3), Article 837, Article 838, and Article 846 (Action for Declaratory Judgment on Nonexistence or Invalidity of or Action for Revocation of a Resolution of a Shareholders Meeting) (excluding the parts pertaining to company auditors in these provisions) of the Companies Act apply mutatis mutandis.

Article 82-2The founders must, without delay after the organizational meeting, submit the articles of incorporation, activity plan, and documents stating the names and addresses of the officers and other necessary particulars to an administrative authority, and obtain approval for the formation.

Article 82-3With regard to the incorporation, the provisions of Article 28 and Article 30 apply mutatis mutandis.

Article 82-4The articles of incorporatoin of an FSBA must state or record therein the following particulars:

Article 82-5The following particulars, except for those that must be prescribed by the articles of incirporation, may be prescribed by the constitution of the FSBA:

Article 82-6An FSBA has one president, five or more directors, and two or more auditors as its officers.

Article 82-7(1)The president represents the FSBA and preside over its operations.

(2)The directors must, pursuant to the provisions of the articles of incorporation, assist the president in administering the operations of the FSBA, perform the duties of the president in place of the president when the president is unavailable, and perform the duties of the president when the post is vacant.

(3)The auditors audit the status of the operations and accounting of the FSBA.

Article 82-8With regard to an FSBA, the provisions of Article 10-2, Article 34-2, and Article 40 (excluding paragraph (1), paragraphs (6) to (9), and paragraph (13)) apply mutatis mutandis; with regard to the president, directors, and auditors, the provisions of Article 35, paragraph (3) and paragraphs (7) through (13), Article 35-2, Article 35-3, Article 36 (excluding paragraph (5)), and Article 36-3, paragraph (1) apply mutatis mutandis; with regard to the president, the provisions of Article 38 of this Act and Article 44, paragraph (1) (Capacity to Commit Tortious Acts) and Article 55 (Delegation of Director's Authority) of the Civil Code apply mutatis mutandis; with regard to directors, the provisions of Article 40, paragraphs (7) through (9) apply mutatis mutandis; and with regard to auditors, the provisions of Article 37, paragraph (1) apply mutatis mutandis.In this case, the term "per person" in Article 35, paragraph (9) is deemed to be replaced with "per person (per right to elect in the case of the national FSBA)," the phrase "at the council and obtain its" in Article 38, paragraph (1) is deemed to be replaced with "to the auditors and obtain their," and the term "council" in paragraph (3) of that Article is deemed to be replaced with "auditors."

Article 82-9An FSBA may designate a person with the relevant expertise as an advisor, and seek advice from the advisor regarding important matters on the FSBA; provided, however, that the advisor may not represent the FSBA.

Article 82-10(1)The president must convene the general assembly once in every business year, pursuant to the provisions of the articles of incorporation.

(2)The president may, when the president finds it necessary, convene the extraordinary general assembly at any time, pursuant to the provisions of the articles of incorporation.

(3)The following particulars require a majority vote of two-thirds or more of the voting rights of those present, where a half or more of all members are present in the case of a prefectural FSBA, and where members having voting rights of a half or more of the total number of voting rights are present in the case of the national FSBA:

(4)With regard to the general assembly, the provisions of Article 47, paragraphs (2) through (4), Articles 48 through 50, Article 51, paragraph (1) and paragraph (2), Article 52, Article 53-3, and Article 53-4 apply mutatis mutandis; with regard to an action for a declaratory judgment on the nonexistence or invalidity of or an action for rescission of a resolution of the general meeting, Article 830, Article 831, Article 834 (limited to the portions pertaining to item (xvi) and item (xvii)), Article 835, paragraph (1), Article 836, paragraph (1) and paragraph (3), Article 837, Article 838, and Article 846 (Action for Declaratory Judgment on Nonexistence or Invalidity of or Action for Revocation of a Resolution of a Shareholders Meeting) (excluding the parts pertaining to company auditors in these provisions) of the Companies Act apply mutatis mutandis. In this case, the term "council" in Article 47, paragraph (2) and paragraph (4) is deemed to be replaced with "president" and the phrase "no directors" in Article 48 is deemed to be replaced with "the president"

Article 82-11(1)A prefectural FSBA whose total number of members exceeds two hundred persons may establish the member representatives meeting in lieu of the general assembly, pursuant to the provisions of the articles of incorporation.

(2)With regard to the member representatives meeting, the provisions concerning the general assembly of a prefectural FSBA and the provisions of Article 55, paragraphs (2) through (5) apply mutatis mutandis. In this case, the term "five" in Article 77, paragraph (6) is deemed to be replaced with "two."

(3)Notwithstanding the provisions of the preceding paragraph, the member representatives meeting may not elect representatives (excluding the election of a representative filling a vacancy) nor decide the particulars set forth in paragraph (3), item (ii) of the preceding Article.

Article 82-12An FSBA may, pursuant to the provisions of the articles of incorporation, establish a sectional meeting for each type of cooperative, etc.

Article 82-13(1)An FSBA dissolves based on any of the following grounds:

(2)When an FSBA is dissolved pursuant to the provisions of item (i) of the preceding paragraph, it must notify the administrative authority of its dissolution within two weeks from the date of the dissolution.

Article 82-14When an FSBA is dissolved, the president becomes the liquidator, except in the case of a dissolution based on an order to commence bankruptcy proceedings; provided, however, that this does not apply when another person is appointed as a liquidator at the general assembly.

Article 82-15The liquidator must, without delay after assuming the position, investigate the status of the assets of the FSBA, prepare an inventory of the assets and a balance sheet, decide on the method to dispose of the assets, submit these documents to the general assembly, and seek its approval.

Article 82-16The liquidator may not distribute the property of the FSBA until after the obligations of the FSBA are paid off.

Article 82-17When the liquidation has completed, the liquidator must, without delay, prepare a statement of accounts, and submit it to the general assembly, and seek its approval.

Article 82-18(1)With regard to dissolution and liquidation, the provisions of Article 73, Article 75, Article 76, and Articles 78 through 82 (Liquidation of a Juridical Person) of the Civil Code and Article 35, paragraph (2) and Articles 37 to 40 (Supervision of Liquidation of a Juridical Person) of the Non-Contentious Case Procedures Act apply mutatis mutandis; and with regard to the liquidator, the provisions of Article 35-3, Article 36-3, paragraph (1), Article 37, paragraph (1), Article 38, Article 39, Article 40, paragraphs (2) through (10) (excluding paragraph (6)), Article 47, paragraphs (2) through (4), Article 48, and Article 82-10, paragraph (1) and paragraph (2) of this Act and Article 44, paragraph (1) (Capacity to Commit Tortious Acts) of the Civil Code apply mutatis mutandis.In this case, "the preceding Article" in Article 75 of that Act is deemed to be replaced with "Article 82-14 of the Small and Medium-Sized Enterprise Cooperatives Act," the phrase "at the council and obtain its" in Article 38, paragraph (1) is deemed to be replaced with "to the auditors and obtain their," and the term "council" in paragraph (3) of that Article is deemed to be replaced with "auditors."

(2)A court supervising the dissolution and liquidation of an FSBA may seek the opinion of or entrust an investigation with an administrative authority supervising the operations of the FSBA.

(3)An administrative authority prescribed in the preceding paragraph may state its opinion to the court prescribed in that paragraph.

Article 83Particulrs that need to be registered pursuant to the provisions of this Act may not be duly asserted against a third party until after the registration thereof.

Article 96(1)With regard to the case where a judgment upholding a claim pertaining to an action for invalidation of the incorporation of a cooperative becomes final and binding, the provisions of Article 937, paragraph (1) (limited to the parts pertaining to item (i), (a)) of the Companies Act apply mutatis mutandis.In this case, any necessary technical replacement of terms is specified by Cabinet Order.

(2)With regard to the case where a judgment upholding a claim pertaining to an action for the invalidation of a reduction in the unit amount of the contribution of a cooperative becomes final and binding, the provisions of Article 937, paragraph (1) (limited to the parts pertaining to item (i), (d)) of the Companies Act apply mutatis mutandis.In this case, any necessary technical replacement of terms is specified by Cabinet Order.

(3)With regard to the case where a judgment upholding a claim pertaining to an action for a declaratory judgment on the nonexistence or invalidity of or an action for revocation of a resolution of the general assembly becomes final and binding, the provisions of Article 937, paragraph (1) (limited to the parts pertaining to item (i), (g)) of the Companies Act apply mutatis mutandis.In this case, any necessary technical replacement of terms is specified by Cabinet Order.

(4)With regard to the case where a judgment upholding a claim pertaining to an action for the invalidation of a merger becomes final and binding, the provisions of Article 937, paragraph (3) (limited to the parts pertaining to item (ii) and item (iii)) of the Companies Act apply mutatis mutandis.In this case, any necessary technical replacement of terms is specified by Cabinet Order.

(5)When an administrative authority orderes a cooperative, etc. to dissolve pursuant to the provisions of Article 106, paragraph (2), it must entrust the registration of the dissolution with the registry office without delay.

Article 97(1)With regard to registration of a cooperative, etc., the competent registry offices are the Legal Affairs Bureau or the District Legal Affairs Bureau having jurisdiction over the location of the relevant office of the cooperative, etc. or a branch office or a sub-branch office thereof.

(2)Each registry office keeps a business cooperative registry, a small business cooperative registry, a fire mutual aid cooperative registry, a credit cooperative registry, a registry of federations of small and medium-sized enterprise cooperatives, a joint enterprise cooperative registry, and a registry of federations of small business associations.

Article 98(1)The incorporation of a cooperative, etc. is registered by an application filed by the person representing the cooperative, etc.

(2)An application form for the registration of incorporation must be accompanied by the documents specified in the following items for the types of cooperatives, etc. specified in those items, unless otherwise provided for by laws and regulations:

Article 99(1)An application form for registration of establishment of a new office or relocation of the office of a cooperative, etc. or any change to the particulars prescribed in the items of Article 84, paragraph (2) or the items of paragraph (4) of that Article must be accompanied by a document proving the establishment or relocation of the new office or proving the changes to the particulars prescribed in the items of paragraph (2) of that Article or the items of paragraph (4) of tht Article.

(2)An application form for registration of a change due to a reduction in the unit amount of the contribution must be accompanied by, in addition to the document set forth in the preceding paragraph, a document proving that public notice or notice under the provisions of Article 56-2, paragraph (2) (in the case of a cooperative which has given public notice by the method of public notice set forth in Article 33, paragraph (4), item (ii) or item (iii) in accordance with the provisions of the articles of incorporation under the provisions of that paragraph, in addition to giving public notice in an official gazette, pursuant to the provisions of Article 56-2, paragraph (3), public notice by these methods) is given, and, if any obligee states an objection, the fact that a payment has been made or equivalent security has been provided to the obligee or equivalent property has been entrusted for the purpose of having the obligee receive the payment, or the fact that the reduction in the unit amount of contribution poses no risk of harming the obligee.

Article 100An application form for registration of the dissolution of a cooperative, etc. under the provisions of Article 91 must be accompanied by a document provding the grounds for dissolution.

Article 101The liquidator must attach a document certifying that the settlement of accounts has been approved pursuant to the provisions of Article 507, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to the provisions of Article 69, paragraph (1) or the provisions of Article 82-17, to an application form to register the completion of the liquidation of a cooperative, etc.

Article 102An application form to register the changes due to an absorption-type merger of a cooperative must be accompanied by, in addition to a document proving the changes made to the particulars prescribed in the items of Article 84, paragraph (2), a document proving that public notice or notice under the provisions of Article 56-2, paragraph (2) as applied mutatis mutandis pursuant to Article 63-4, paragraph (4) and to Article 63-5, paragraph (6) (in the case of a cooperative which gives public notice by the method of public notice set forth in Article 33, paragraph (4), item (ii) or item (iii) in accordance with the provisions of the articles of incorporation under the provisions of that paragraph, in addition to giving public notice in an official gazette, pursuant to the provisions of Article 56-2, paragraph (3) as applied mutatis mutandis pursuant to the provisions of Article 63-4, paragraph (4) and to Article 63-5, paragraph (6), public notice by these methods) has been given, and, if any obligee has stated an objection, the fact that a payment has been made or equivalent security has been provided to the obligee or equivalent property has been entrusted for the purpose of having the obligee receive the payment, or the fact that the absorption-type merger poses no risk of harming the obligee, and a certificate of the registered particulars of the cooperative dissolved due to the absorption-type merger (excluding one whose principal office is located within the district under the jurisdiction of the relevant registry office).

Article 102-2An application form to register incorporation due to a consolidation-type merger of cooperatives must be accompanied by, in addition to the documents specified in Article 98, paragraph (2), item (i), a document proving that public notice or notice under the provisions of Article 56-2, paragraph (2) as applied mutatis mutandis pursuant to the provisions of Article 63-6, paragraph (4) (in the case of a cooperative which gives public notice by the method of public notice set forth in Article 33, paragraph (4), item (ii) or item (iii) in accordance with the provisions of the articles of incorporation under the provisions of that paragraph, in addition to giving public notice in an official gazette, pursuant to the provisions of Article 56-2, paragraph (3) as applied mutatis mutandis pursuant to the provisions of Article 63-6, paragraph (4), public notice by these methods) has been given, and, if any obligee has stated an objection, the fact that a payment has been made or equivalent security has been provided to the obligee or equivalent property has been entrusted for the purpose of having the obligee receive the payment, or the fact that the consolidation-type merger poses no risk of harming the obligee, and certificates of registered information of the disappearing cooperatives in the consolidation-type merger (excluding those whose principal offices are located within the district under the jurisdiction of the relevant registry office).

Article 103With regard to registration of a cooperative, etc., the provisions of Articles 2 through 5 (Registry Office and Registrar), Articles 7 through 15, Articles 17 through 23-2, Article 24 (excluding item (xv) and item (xvi)), Articles 25 through 27 (Registry, etc., General Rules on the Registration Procedure, and Prohibition of Registration of Identical Trade Names for Identical Office Addresses), Articles 48 through 53, Article 71, paragraph (1) and paragraph (3) (Registration of a Stock Company) and Articles 132 through 148 (Correction and Cancellation of Registration and Miscellaneous Provisions) of the Commercial Registration Act (Act No. 125 of 1963) apply mutatis mutandis; and with regard to registration of a cooperative, the provisions of Article 24 (limited to the parts pertaining to item (xv)) (Dismissal of Application), Article 45 (Registration of the Manager of a Company), Article 79, Article 82 and Article 83 (Registration of a Merger) of that Act apply mutatis mutandis.In this case, the term "Corporate Reorganization Act (Act No. 154 of 2002)" in Article 12, paragraph (1) of that Act is deemed to be replaced with "Act on Special Measures for the Reorganization Proceedings of Financial Institutions (Act No. 95 of 1996)," the term "the items of Article 930, paragraph (2) of the Companies Act" in Article 48, paragraph (2) of thatAct is deemed to be replaced with "the items of Article 93, paragraph (2) of the Small and Medium-Sized Enterprise Cooperatives Act," the phrase "one who has become a liquidator of a liquidating stock company pursuant to the provisions of Article 478, paragraph (1), item (i) of the Companies Act (in the case prescribed in Article 483, paragraph (4) of that Act, one who has become the representative liquidator of a liquidating stock company pursuant to the provisions of that paragraph)" in the proviso to Article 71, paragraph (3) of that Act is deemed to be replaced with "a liquidator under the provisions of the main clause of Article 82-14 of the Small and Medium-Sized Enterprise Cooperatives Act" with regard to an FSBA.