Kabushiki-Kaisha(KK) versus(vs) Godo-Kaisha(GK). Comparison and differences

Kabushiki-Kaisha versus (vs) Godo-Kaisha. Registration, Incorporation, Formation. Difference between Setting-up and Opening of a Kabushiki-Kaisha (KK) and Godo-Kaisha (GK) and comparison.

Some Basic Features of Kabushiki-Kaisha (KK) and Godo-Kaisha (GK)

Kabushiki-Kaisha(Joint-Stock Company): A Kabushiki Kaisha has commonly abbreviated KK. The term KK is often referred to in English as "Joint-Stock Corporation." However, as a company name in English, "KK" is used as "Co. Ltd.," "Corporation," and or "Incorporated." A KK can be registered with a capital of 1(one) yen and with only one Investor/Promotor as "Shareholder and Director." A KK is Japan's most widely known and credible type of company structure. Shareholders and Directors can all be non-residents, and a resident in Japan is not mandatory.

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Kabushiki Kaisha(KK) vs. Godo Kaisha(GK)

Godo-Kaisha (Limited Liability Company) (LLC): A Godo Kaisha has commonly abbreviated GK introduced in the Companies Act of Japan" in May-2006. GK is similar to the UK's Private Limited Company (Ltd) or the American Limited Liability Company (LLC). A foreign entrepreneur or a corporation can register a GK in Japan without a "Local Resident in Japan" under the amendment in the Companies Act introduced in March-2015.

Kabushiki-Kaisha(KK) versus(vs) Godo-Kaisha(GK) Features

Features of Kabushiki-Kaisha (KK) and Godo-Kaisha (GK) At a Glance.

KK, GK Incorporation without Japan Resident

Capital: 1(one) yen or more. [Establishment with zero yen capital is theoretically possible but in practice to incorporate without paying capital is not possible.]
Investors: 1(one) or more
Corporation as an Investor: Possible
Liability of Investors: Limited to amount of investment / equity participation.
Directors / Executive officers: 1(one) or more (In case of a GK in principle, all members are executive officers, but may be stipulated otherwise in “Articles of Association”)
Legally stipulated term of office of Directors / Executive officers: In case of KK (with capital less than 500 million and without committee [Kabushiki Joto Seigen Kaisha]) 2 years in principle and extendable up to 10 years. In case of GK no legally stipulated term.
Transfer of share / equity: In case of KK it can be transferred freely in principle unless it is stipulated in “Articles of Association” that it requires approval of board of directors. In case of a GK unanimous approval of members (equity holders) required.
Resident of Japan: A foreign entrepreneur or a corporation can register a KK or GK in Japan without a "Local Resident in Japan" under the amendment in the Companies Act introduced in March-2015.
Registered Office: A local address in Japan is required. (physical address and not a P.O. Box)
Co. Secretary: Not required
Yearly Auditing of Accounts: Not mandatory

Comparison between Japanese KK and GK

	Kabushiki-Kaisha(KK) (Kabushiki Joto Seigen Kaisha) Joint-Stock Company	Godo-Kaisha(GK) LLC Limited Liability Company
Transfer of equity participation share	May be transferred freely in principle. May be stipulated in articles of incorporation so that approval of Board of Directors is needed for transfer of shares.	Unanimous approval of equity participants (members) required
Number of executives required	Appointment of 1 or more required. Representative director with right to execute business. If no representative director is appointed, executive officers each have the right of representation.	No legally stipulated minimum. In principle, all members are executive officers, but a representative member may be appointed.
Legally stipulated term of office for executives	2 years in principle. Extendable up to 10 years	No legally stipulated term
Possibility of a Company to be a Director	Not possible	Possible. However, the co should nominate an individual staff from the co.
Director must be from shareholder /member	Not necessarily	In principle, all members are executive officers, but may be stipulated otherwise in “Articles of Association”
Regular general meeting of shareholders / members	In principle, must be held every year	Not required
Possibility of public offer of stock	Possible	Not possible
Possibility of reorganization	A joint-stock corporation (KK) may be reorganized into a limited liability company (LLC) (GK).	A limited liability company (LLC) (GK) may be reorganized into a joint-stock corporation (KK)
Distribution of profits and losses	Allocated according to equity participation ratio	May be allocated at a different ratio from equity participation ratio if specified in Articles of Association

Time-frame for registration: For the procedure, please refer to the registration flowchart of Kabushiki-Kaisha (KK) and Godo-Kaisha (GK). Upon applying to Legal Affairs Bureau for registration, it takes about 2(two) weeks to obtain the registration certificate.

A foreign entrepreneur or a corporation can register a Kabushiki-Kaisha [KK] or Godo-Kaisha [GK] in Japan without a "Local Resident in Japan" under the amendment in the Companies Act introduced in March-2015.

Japan Types of Companies(legal-entity) - Comparison At a Glance

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