Along with the move to Meguro Ward and manufacturing of the "Hansa Canon," the Precision Optical Instruments Laboratory appeared to have made steady growth during those days, but the actual situation was different. It was reported that the production volume ranged from a maximum of 10 cameras per month to barely one camera per week. Business conditions were undoubtedly tough. In order to overcome the financial difficulties, on August 10, 1937, the Precision Optical Instruments Laboratory was reorganized as a joint-stock company and its name was changed to Precision Optical Industry Co., Ltd. This date is now considered the official founding date of Canon.
Following the "Hansa Canon (Standard Model)," the company successively introduced the "S or Newest Model" and the "J or Popular Model" in February 1939 and the "NS or New Standard Model" by the end of the same year. With the introduction of the "Newest Model," the word "Hansa" disappeared from the brand name, and was replaced with only "Canon." This, however, did not mean a break in the relationship with Omiya Omiya Shashin Yohin Co., Ltd. In fact, Omiya continued to provide financial assistance to the company.
In the middle of 1937, strong voices were raised calling for production of the company's own lenses. Yoshizo Furukawa, the company's first optical engineer, developed some lenses on a trial basis such as the 50mm f/4.5 lens, the 45mm f/0.85 lens for 16mm cinecameras. He was also involved in developing lenses such as the 50mm f/3.5, 135mm f/4 and lenses for the indirect X-ray camera. The name given to these lenses was "Serenar," which connotes the word "serene" for "clear, calm and tranquil," which originates in the Sea of Serenity on the moon.
In 1942, Takeshi Mitarai (1901-1984), a friend of Saburo Uchida, became president of the company. Although he was an obstetrician by profession, Mitarai had been an enthusiastic supporter of Uchida since the early days of Precision Optical Industries Co., Ltd. After being the auditor of the company, he was appointed president of the company, and worked hard in establishing the post-war foundation of the company. He stressed the so-called "Sanbun-setsu System” (sharing of the company profits by employees, shareholders and management), in addition to the "Competence-Based Promotion System" and the "Family First Concept (GHQ or go-home-quickly)."
The Precision Optical Industry Co., Ltd. was temporarily disbanded when World War II ended on August 15, 1945, and resumed operation on October 1, 1945 through a call made by Mitarai to the former employees. The first Canon camera produced after the war by scrounging scarce raw materials from the rubble of war-torn Japan was the "J II (Post-War Popular Model)." Yet, the record showing that only three cameras were produced in that year indicates the hardships endured by the company during its restoration.