The amendments to Japan's Social Welfare Act (Shakai Fukushi Hō), largely effective from April 1, 2017, brought about significant changes to the governance structures of Social Welfare Corporations (Shakai Fukushi Hojin, or SWFs). For SWFs already in existence prior to these reforms, a critical transition involved the retirement of their pre-reform directors and the appointment of new leadership, including the selection of the first President (理事長 - Rijichō) under the revamped legal framework. This article details the specific procedures, key considerations, and registration steps involved in this pivotal "first appointment" process for existing SWFs.

I. The Context: Transitional Governance Under the 2017 Reforms

The 2017 amendments aimed to enhance transparency, accountability, and the robustness of SWF governance. A key element of this was restructuring the roles and terms of their leadership.

A. End of Term for Pre-Reform Directors

A crucial transitional measure was stipulated in Article 14 of the Supplementary Provisions (附則 - Fusoku) of the Amended Social Welfare Act. This provision mandated that the term of office for all directors serving in SWFs that existed as of the enforcement date (April 1, 2017) would automatically expire at the conclusion of the first regular Councillor Council meeting (定時評議員会 - teiji hyōgiinkai) convened on or after that enforcement date. Consequently, all pre-reform directors were deemed to have retired due to term expiration at this juncture, necessitating a comprehensive leadership renewal.

B. Timing of the First Post-Reform Regular Councillor Council Meeting

The timing of this first regular Councillor Council meeting was dictated by the standard fiscal cycle of SWFs and associated reporting deadlines:

• Social Welfare Corporations in Japan typically operate on a fiscal year from April 1st to March 31st (Social Welfare Act, Art. 45-23(2)).
• Following the close of the fiscal year, SWFs are required to prepare financial statements (such as the balance sheet and statement of income and expenditure), have them audited, and obtain approval from their Board of Directors and subsequently from the Councillor Council. These approved documents must then be submitted to the supervisory authority (Shokatsu-cho) generally within three months of the fiscal year-end (Social Welfare Act, Art. 45-27(2) and Art. 59(1)).
• Therefore, for the fiscal year ending March 31, 2017, this first crucial regular Councillor Council meeting, which would trigger the term expiry of old directors and facilitate the election of new ones, was largely expected to be held by the end of June 2017.
• The law also provided that if, for some reason, this meeting was not convened by the anticipated deadline, the terms of the pre-reform directors would still be considered to have ended by the latest date on which such a meeting should have been held according to the usual procedural cycle.

II. The Two-Step Appointment Process for the First Post-Reform President

The selection of the first President under the new regime was a structured, two-step process:

A. Step 1: Election of New Directors by the Councillor Council

At this first regular Councillor Council meeting held after April 1, 2017, following the handling of routine annual matters like the approval of financial statements, a primary order of business was the election of a new slate of Directors. These new Directors had to be individuals who met the qualifications and composition requirements of the Amended Social Welfare Act (e.g., minimum number of directors, inclusion of individuals with specific expertise or community knowledge). The election of these new Directors was made by a formal resolution of the Councillor Council.

B. Step 2: Selection of the President (Rijichō) by the New Board of Directors

Once the new Directors were elected by the Councillor Council, they were required to convene their own inaugural Board of Directors meeting. At this first meeting of the new Board, one of their key responsibilities was to select one individual from among their ranks to serve as the President (Rijichō) of the SWF. This selection is in accordance with Article 45-13, Paragraph 3 of the Social Welfare Act, which empowers the Board of Directors to choose the President.

III. Registration of Leadership Changes with the Legal Affairs Bureau (Hōmukyoku)

Following these internal appointments, the SWF was required to formally register these leadership changes with the competent Legal Affairs Bureau to update the public corporate register.

A. Scope of the Registration

The registration application would typically encompass several related changes:

• The retirement (due to expiration of term under the transitional provisions) of all pre-reform directors whose terms ended at the first regular Councillor Council meeting.
• The appointment of all newly elected Directors.
• The appointment of the newly selected President.
• Additionally, if the SWF had previously registered specific limitations or scopes of representative authority for any of the retiring directors (a practice more common under the pre-reform law), the extinction of these provisions would also need to be registered (discussed further in Section IV).

B. Applicant and Registration Deadline

The application for registration of these changes was to be filed by the newly selected President, acting as the representative of the SWF (Social Welfare Act, Art. 45-17(1)). The filing deadline was strict: within two weeks from the date the changes occurred (e.g., the date the new President formally assumed office following their selection by the Board) at the Legal Affairs Bureau governing the SWF's principal office (Order for Registration of Cooperatives, etc. [組合等登記令 - Kumiai-tō Tōki Rei], Art. 3(1)). Failure to meet this deadline could result in non-penal monetary fines (Social Welfare Act, Art. 133(1)).

C. Essential Attachments for the Registration Application

The registration application required a comprehensive set of supporting documents to verify the changes, primarily based on Article 17, Paragraph 1 of the Kumiai-tō Tōki Rei:

1. Documents Evidencing the President's Appointment:
   • Minutes of the Regular Councillor Council Meeting (定時評議員会議事録 - Teiji Hyōgiinkai Gijiroku): This document serves as proof of the election of the new Directors who subsequently formed the Board that selected the President.
   • Minutes of the Board of Directors Meeting (理事会議事録 - Rijikai Gijiroku): This is a critical evidentiary document showing the selection of the President from among the newly appointed Directors.
2. Letters of Acceptance (就任承諾書 - Shūnin Shōdaku Sho):
   • A formal letter of acceptance from the individual selected as President, confirming their acceptance of their role as a Director (since the President must be a Director).
   • A separate formal letter of acceptance from the same individual, confirming their acceptance of the specific role and responsibilities of President.
   • Note on Incorporation by Reference (援用 - En'yō): If an individual's acceptance of a role (and their residential address, for officers whose addresses are registered, like the President) is clearly recorded within the official minutes of the meeting where they were appointed/selected, a separate letter of acceptance may not be required. The registration application can state that the letter of acceptance is "incorporated by reference" from the relevant meeting minutes.
3. Seal Certificates (印鑑証明書 - Inkan Shōmeisho) for Board of Directors Minutes:
   • For the Board of Directors meeting minutes where the President was selected, the Directors and Auditors who attended and are required by the SWF's Teikan or by law to sign or affix their names and seals to these minutes must typically use their officially registered personal seals (実印 - jitsuin). A seal certificate for each such seal, issued by their local municipal office (市町村長発行の印鑑証明書 - shichōsonchō hakkō no inkan shōmeisho), must be attached to the registration application. This verifies the authenticity of the signatures/seals on this crucial decision-making document.
   • Exception: If a re-elected Director who is a signatory to the Board minutes uses a seal that is identical to one they had previously registered with the Legal Affairs Bureau (e.g., if they were a representative director before the reforms and their seal is already on file), a new municipal seal certificate for that specific signature might not be necessary (Various Corporation Registration Rules Art. 5; Commercial Registration Rule Art. 61(6)). However, for newly appointed directors signing such minutes for the first time, or if seals are different, municipal certificates are generally needed.
4. Articles of Incorporation (Teikan) (Conditionally Required):
   • Generally, the Teikan itself was not required as an attachment for this specific "first President" registration, because the fundamental methods for selecting Directors (by the Councillor Council) and the President (by the Board of Directors) are now stipulated by the Social Welfare Act itself.
   • However, the Teikan was required to be attached if:
     • The SWF's Teikan uniquely permitted the President to be selected directly by the Councillor Council (an alternative allowed under SWA Art. 45-8(2)).
     • The Teikan stipulated quorum or voting majority requirements for Councillor Council or Board of Directors meetings that were higher than the statutory minimums.
     • The Teikan specified that only the President (and Auditors) were required to sign or seal the Board of Directors minutes (this affects whose seal certificates would be necessary).
     • The President was selected via a "deemed resolution" of the Board of Directors (i.e., by a unanimous written consent procedure), if such a procedure was permitted by the Teikan.
5. Power of Attorney (委任状 - Ininjō): If a judicial scrivener or other authorized agent was filing the registration application on behalf of the President.
6. New Seal Registration Form (印鑑届書 - Inkan Todoke-sho) for the President's Official Seal:
   • If the newly appointed President intended to use a new official seal for their capacity as the representative of the SWF, or if the SWF itself was registering a new official corporate seal at this time, a Seal Registration Form had to be submitted. This form must be accompanied by the President's personal municipal seal certificate to verify their identity.
   • This was not required if a re-elected individual continued as President (though less common in this specific transitional scenario) and intended to use the exact same representative seal already on file with the Legal Affairs Bureau for the SWF.

IV. Addressing Pre-Reform Registered Director Authority (Extinction of Old Provisions)

A significant legal consequence of this leadership transition concerned previously registered powers of directors.

A. Background of Pre-Reform Director Authority

Under the Social Welfare Act before the 2017 amendments, it was possible for multiple directors within an SWF to hold representative authority. Furthermore, any specific limitations or defined scope of such representative authority for individual directors could be, and sometimes were, registered with the Legal Affairs Bureau.

B. Impact of the 2017 Reforms on Representative Authority

The 2017 reforms fundamentally changed this by centralizing the comprehensive representative authority of the SWF solely in the position of the President (Rijichō) (Social Welfare Act, Art. 45-17(1)).

C. Extinction (Shōmetsu) of Old Registered Provisions

With the legally mandated retirement of all pre-reform directors at the conclusion of the first regular Councillor Council meeting held after April 1, 2017 (as per Article 14 of the Amended Act's Supplementary Provisions), any provisions that had been previously registered concerning the scope or limitations of those former directors' representative authority automatically became extinct (消滅 - shōmetsu). Their roles, and thus their specific registered authorities, ceased to exist.

D. Registration Requirement for Extinction

This extinction of the old representative authority provisions was not just an internal matter; it had to be formally registered with the Legal Affairs Bureau. This registration was typically done concurrently with the registration of the appointment of the new President and the retirement of the old directors. The "Reasons for Registration" (登記の事由 - Tōki no Jiyū) section of the application form would include an item such as "extinction of provisions concerning scope of representation" (代表権の範囲に関する規定消滅).

E. No Specific Attachments Required for Registering the Extinction

Importantly, no separate evidentiary documents (like specific resolutions to extinguish these powers) were required to be attached for the purpose of registering this particular extinction. The extinction was a direct legal consequence of the transitional provisions of the Amended Act regarding director retirement, and thus occurred automatically by operation of law. The registration merely updated the public record to reflect this legal reality.

V. Key Considerations for a Smooth Transition During the 2017 Reforms

For SWFs navigating this mandatory leadership change in 2017, several factors were crucial for a smooth transition:

• Advance Planning: Proactive planning for the first post-reform regular Councillor Council meeting was essential. This included identifying suitable candidates for the new directorships and, subsequently, for the presidency, ensuring they met the enhanced qualification and independence criteria of the Amended Act.
• Teikan Review and Prior Amendment: Many SWFs needed to amend their Articles of Incorporation prior to this first crucial meeting to ensure their Teikan fully complied with the new governance requirements (e.g., having robust provisions for the Councillor Council, Board of Directors, officer qualifications, etc.).
• Meticulous Documentation: The preparation of accurate and complete minutes for both the Councillor Council and Board of Directors meetings, along with the timely collection of letters of acceptance and necessary seal certificates, was vital for ensuring that the subsequent registration of these significant changes could be processed efficiently and without issues.

Conclusion

The appointment and registration of the first President (Rijichō) under the framework of the 2017 Social Welfare Act reforms marked a significant milestone for existing Social Welfare Corporations in Japan. It represented a fundamental shift towards a more robust and transparent governance model, centered around a newly empowered Councillor Council and a Board of Directors with a clearly designated representative President. The process, though involving several steps and detailed documentation, was crucial for aligning these established organizations with the new legal standards and for ensuring that their leadership structures were accurately and clearly reflected in the public corporate register. This transition underscored the Japanese government's commitment to strengthening the accountability and public trust in these vital social sector organizations.