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The Japan Business Federation, or Keidanren, will propose the government create a law that would allow companies to hold shareholders meetings only virtually without setting up physical sites, it was learned Tuesday.

With no end in sight for the COVID-19 epidemic, Japan's leading business lobby hopes that the proposal will give companies more options about shareholders meetings so that crowds in an enclosed space can be avoided and also enhance convenience for companies and investors, informed sources said.

The group will announce the proposal soon. It will also include the proposal in a list of requests for deregulation that will center on digitalization.

The Companies Act requires companies to specify a location in order to convene shareholders meetings. Companies holding virtual meetings are forced to shoulder a heavy burden because they also have to set up physical sites.

Keidanren, which believes that efforts to promote dialogue between companies and investors are important even amid the novel coronavirus epidemic, will seek legislation like a special law for virtual-only shareholders meetings, the sources said.

As for virtual meetings held under the existing law, the group will ask the government to clarify in guidelines what responses should be taken to prevent resolutions from being canceled when disruptions in communication occur, the sources said.

There are two forms of virtual meetings. One allows shareholders to ask questions and exercise their voting rights and the other only allows shareholders to view meetings.

Over 150 companies have held virtual shareholders meetings this year, according to Mitsubishi UFJ Trust and Banking Corp.

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