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| ERP (Enterprise Resource Planning) |
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This is a software package, which can be introduced into a business according to the organization and operation for every user. This includes financial accounting, administrative accounting, purchase management, production control, order-received management, sales management, and stock management.
Unlike the operating systems that were developed in various parts, this software package is fit for data exchange and effective use between systems. Applications, such as SAP and PeopleSoft for big businesses, and Scala for medium-ranking companies are some of the well-known software.
The reasons behind introducing ERP into a business lie in these effects: By re-engineering the whole organization and by the extensive utilization of computers and networks, the old organization completely changes into one with a more competitive power, a changed classification and composition of its organization, and useless procedures are sharply cut-down, in addition to the improvement of the speed of decision-making. |
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| Tracking stock |
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The method of raising funds while maintaining stock control by listing the stock of specific enterprise sections or subsidiaries is called Tracking Stock.
In the present commercial law, there is regulation about preference stock or subordinated stock, but there is no clear regulation about tracking stock. Therefore, there are circumstances where tracking stocks are issued with the interpretation that the commercial law has not necessarily denied stocks other than preference stocks or subordinated stocks.
As an example, the Sony published Japanese version tracking stock is a stock that is interlocked with the achievements of Sony Communication Network (SCN), which is a 100% subsidiary of the same company, and although the company will receive a dividend according to the achievements of SCN, voting rights is used not for SCN but for the Sony parent company. In addition, under a fixed condition, refund by refund, conversion to Sony common stock, and exchange with SCN common stock are accepted |
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| Outside director |
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A director who does not take charge of actual management execution in a company is called the outside director. It seems that in many cases, outside directors are dispatched from the profits group of a company (a stockholder, a bank, a securities firm, a parent company, etc.), or a company requests assumption of office from specialists, such as managers, lawyers, and certified public accountants.
It is understood that as the importance of a company's corporate governance increases, there will be increasing circumstances where outside directors are inaugurated.
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| Securitization of real estate |
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In order to advance with the reconstruction of an established city area by effective land use, smooth reservation of a fund needed for real estate related investment is required. Securitization of real estate is one method of realizing this.
The right to real estate, such as to office and to apartment, is divided in detail, and it is made into securities, such as stocks and corporate bonds, and circulated in the market and these securitiesb are purchased. This is a technique of real estate investment where the investor does not buy the real estate itself, but buys securities as one would buy the stocks of a company and receives as a return the profit from that.
"The law (SPC method) about mobilization of the specified assets by the special purpose company" was proclaimed in June of 1998 and was enforced in September of the same year. Due to the enforcement of this law there came to be a fixed legal framework for mobilization through securitization of real estate such as: 1) The possibility of the issuing of negotiable securities that are backed up by specified assets, such as real estate through the establishment of special purpose companies. 2) The attainment of the protection of investors achieved by the making and employment of the mobilization of assets plan. |
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| Japanese version 401K (defined-contribution pension scheme) |
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This is a pension program, of which the amount of grant is determined based on the total amount of the subscribed premium frame and its employment profit. It is contrasted with a definite grant type and is also called the credit gold basis system.
Although it is not necessary for a company to subscribe additionally, for the member, there is an employment risk, and since the amount of grant is not settled, it is difficult to proceed with the life design of after-retirement.
However, in the United States, this pension method and definite donation called 401K has spread. With 401K, even if one changes one's employment, the management of his/her pension financial funds is transferred to a new position, and it is possible to receive the pension (portability).
It is thought that many companies in Japan will also adopt this as a defined-contribution pension scheme from now on. |
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| Treasury stock |
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Acquisition and possession of self-stocks, excluding the inescapable acquisition (acquisition by merger etc.), was forbidden in principle by the commercial law before its amendment. With the amendment commercial law enforced from October 1st, 2001, the possession of self-stocks became free. This is called the "Removal of the Ban on the Treasury Stock."
As for acquisition of self-stocks, the decision of a regular general meeting is needed within the limits of profits available for dividend and allowance. Although the acquisition method is based on market purchase and a take-over bid in the case of self-stocks with a market price, a negotiated transaction is also possible when sale conditions with a stockholder are secured.
Furthermore, the acquisition purpose regulation was abolished and acquisition was liberalized. One of the purposes for this is having "mobile implementation of a reorganization of a company's organization." In other words, this is something to support reorganization of mobile organization by admitting the assigning of self-stocks that a company holds in place of the new issuing of stocks published on occasion by a company's reorganization of its organization. (Substitution treasury stock)
Although self-stocks can be effaced freely by the resolution of the board of directors, and the disposal (sale) of self-stocks is also liberalized, it is presupposed by the revising method additional rule, that anything except the stock option purpose of a self-stock substitution treasury stock cannot be disposed of until the end of March 2002.
When self-stocks are acquired and a deficit arises at the end of a term, a director is burdened with obligation to pay reparations of either the amount of loss or the amount of the acquisition value of self-stocks, depending on which is lesser. |
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| Group management |
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Since we have entered the 21st century, the business-accounting system of Japan has reformed sharply. The object of connection in consolidated statements was expanded sharply, and the same goes for information disclosure, which is now focusing on connection as well. Moreover, in addition to the consolidated balance sheet and the consolidated income statement, connection cash flow statements were newly introduced.
What is common in reform is the viewpoint of seeing a company not as a simple substance but as an enterprise group. There are legal systems that have been organized, which have possibilities of building flexible organization forms that are unique to each strategy of group companies, such as: removal of the ban of a pure holding company, establishment of exchange of shares and a stock transfer system, and removal of the ban of a treasury stock. Introduction of consolidated taxation systems that are carried out in the U.S. and European countries are also planned.
Group connection management regardless of a company's scale is an essential component in a company's continuation and growth. Even in leading companies, where consolidation is not called upon by its system, in order to strengthen the management nature of a company, the company must be conscious of "connection", and a management which enlarges group company value is needed.
In order to develop group management smoothly, examination form many fields, such as, judicial affairs, taxation business, accounts, and business management is required. |
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