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Company Formation Japan

Types of companies in Japan

Updated on Tuesday 13th June 2017

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One of the most developed countries in the world, Japan attracts thousands of investors each year, even though the cultural impact is strong in the beginning, especially for EU or USA entrepreneurs. The forms of business are mostly similar with the worldwide forms of business.
There are the sole proprietorships, the companies and the partnerships. 
The partnerships are divided into general partnerships (Go-mei Gaisha) and limited partnerships (Go-shi Gaisha). The companies may be joint stock companies (Kabushiki Kaisha) or limited liability companies (Goudou-Gaisha). 

Our company registration specialists in Japan can offer you more information about each type of company and can help you choose the most suitable one for your business needs.

 
The sole proprietorship in Japan

 

The sole proprietorship is the basic form of business in Japan. Is formed by a single owner, fully liable for the business debts but who can keep the profit of the company. In the event of liquidation his personal assets are not protected from the creditors’ claims.

 
The joint stock company 
in Japan
 

The joint stock company may be open or closed. The main difference between the two forms is that in a close joint stock company the shares cannot be transferable to a third party without the consent of the shareholders, while the shares of an open joint stock company may be subscribed at the Stock Market and be freely transferable.

 

Also, the management of an open Kabushiki Kaisha is assured by a board of directors, which consists in at least three members, while the management of a closed joint stock company is provided by a single director.

 

The directors of an open joint stock company are elected for a period of two years and the auditors have a statutory term of four years. The directors of the open joint stock company are elected for an undetermined period of time. All the joint stock companies must have at least one director resident in Japan.

 

There is no need to subscribe a minimum share capital at registration of a joint stock company, only the registration fees must be paid.

 

The incorporation of a joint stock company is based on the Articles of Association, which must state: the name of the company, the address of headquarter, the name and address of the founder, the goals of the company, the value of the authorized capital and if applicable, the amount of non cash contribution and the number of shares issued for that and the name of the members who provides non cash contribution. Sometimes, the articles of association mention the maximum number of auditors and directors.

 

The Articles must be registered at the Japan Legal Affairs Bureau which will provide a certificate of registration. If you need help in the procedure of starting such a company in Japan, you should know that we can elaborate the Articles of Association and we can take care of the entire registration procedure of this company type.
 

The limited liability company in Japan
 

The limited liability company (Goudou Gaisha) was introduced by the new Commercial Code of Japan in 2006, replacing the former Yugen Gaisha. As the name suggests, the members of a limited liability company in Japan have their liability limited by their contribution to the capital. It is managed by a manager, natural person or corporate body. The managers are elected for an undetermined period of time. A goudou gaisha may be reorganized as a joint stock company if all the company’s members agree with the decision.

 
The 
general partnership
 

A general partnership is a form of business usually formed by members united under the same name, with the same objectives. The difference between the usual general partnership and the Japanese general partnership is that the last one may be formed by a single member.

 

The risks of incorporating this type of business are indisputable: if the partnership cannot pay its debts and obligation, the personal assets of the partners may be seized.
 

The limited partnership 
 

The limited partnership is formed by two types of members: with unlimited liability, called general partners or with liability only in extend of their contribution to the partnership’s capital called silent partners. Just like in the case of the general partnerships, the assets of the members are not protected in case of liquidation.

Our Japan company formation agents are experienced in registering companies and are ready to assist businessmen no matter the legal structure chosen by them.


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