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"Since 1993"
"One Stop Solution" for Business & Administrative requirements pre-entry & post-entry level support (Page 1 of 9)
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ABriefSummaryreJapanBusinessEstablishment
OpeningaCompanyinJapan
Howaforeigncompanyorentreprenuersetsupbusinesspresenceintermsofformationofalegalentitydependsuponthenatureandmagnitudeofthebusiness,proposedbusinessoperation,aswellaslegal,taxandotherconsiderations.Manyoptionsexist,rangingfromaBranchofficeoralocalJapanesesubsidiarycompanysuchasKabushiki-Kaisha(KKCo),Godo-Kaisha(GKCo)andthereareseverallocaltypesofcompanyformationsavailable.ThereisalsoaJapaneseversionofalimitedliabilitypartnership(LLP),isnotacorporation,butapartnershipformat.ForeigncompaniesdoingsomeresearchwillfindthatadministrativelegalmattersredoingbusinessinJapanmayevensometimeseasiercomparetotheirownhome-country(dependinguponthenationalityoftheforeigncompany).Withrightprofessionalassistance“SettingUpCompany,AdministrativeOperation&DoingBusinessinJapan”isquitesimpleandnotthatverydifficulttask,asmanyforeigncompaniesorentreprenuermighthaveperceivedit!InrecentpastJapanesegovernmenthasalsotakeneffortsforattractingforeignbusinessestoJapanandmadepromisestosolveinconveniencebyremovinglanguagebarriersinretailoutlets,enhancingeducationalenvironmentforexpatriatechildren,furtherimprovinginternetconnectivity(FreeWi-Fi)etc.
SettingupabusinesspresenceinJapan
AforeigncompanycansetupabusinesspresenceinJapaninanyoneoffollowing4(four)formats:
Ø RepresentativeOfficeØ BranchOfficeØ SubsidiaryCompanyØ LimitedLiabilityPartnership(LLP)
RepresentativeOffice:
Representativeofficesaregenerallyestablishedforcarryingoutmarketresearch&liaisonactivitiesonbehalfofheadoffice.ItdoesnotallowtoconductcommercialbusinessactivitiesinJapanandnoregistrationisrequiredundertheCommercialCodeinprinciple.
BranchOffice
ThesimplestmodeforaforeigncompanytoestablishalegalentityforcommercialbusinessoperationsinJapanistosetupabranchoffice.Intermsoftherangeofbusinessactivitiesallowed,therearenobasicdifferencesbetweenbranchofficeanddomesticcorporations.Taxedonbranchincomeonlybutrateissameaslocalco.Forregistrationthereisnorequirementtoestablishstatutoryofficers/managementbody,itonlyneedsalocalphysicaladdress(notPOBox)&aRepresentativeinJapan(mustbearesidentofJapan).
SubsidiaryCompany
Aforeigncompanywillingtoestablishasubsidiarycompanymaychoosefromthefollowings:
(a) Joint-stockcorporation(Kabushiki-Kaisha)[K.K.](b) LimitedLiabilityCompany(LLC)(Godo-Kaisha)[G.K.]orsimilarentitystipulatedbyJapan'sCompaniesAct.
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Thereareformatssuchasunlimitedpartnerships(Gomei-Kaisha)andlimitedpartnerships(Goshi-Kaisha)undertheCompaniesAct,buttheyarerarelychoseninpracticebecauseequityparticipantsburdenunlimitedratherthanlimitedliability.
Asubsidiaryisaseparatelegalentityfromtheforeigncompany,thereforeforeigncompanywillbeartheliabilityofanequityparticipantstipulatedbylawforalldebtsandcreditsgeneratedbytheactivitiesofthesubsidiary.
MinimumrequirementforestablishingasubsidiarycoinJapanistohavealocalphysicaladdress(notPOBox)andalocalresidentinJapan.
However,effectiveMar’15JapanesegovernmenthasallowedforeigncompanytoregisteraJapaneseKKcowithdirectorsresidingabroadandthemandatoryrequirementofatleastonelocalResidentDirectorhasbeenrelaxed/abolished!(Butfortheprocedureof“paid-upcapital”ofthelocalcoalocalresidentshareholderisrequiredatthetimeofregistration&uponcompletiontheshareoflocalresidentcanbetransferredbacktoforeigncoorindividualforholding100%shareintheJapanKKCo.).PleaserefertonotebelowwithregardtoK.K.CoformationunderthenewregulationeffectiveMar’15.Forfurtherdetailsandorclarificationpleasecontactus.
LimitedLiabilityPartnership(LLP)
ThisformatisalsoallowstodobusinessbyusingaYugenSekininJigyoKumiai.ItisconsideredasJapaneseversionofalimitedliabilitypartnership(LLP),isnotacorporation,butapartnershipformedonlybytheequityparticipants,whohavelimitedliability.
TaxesareleviedonprofitsallocatedtoequityparticipantsbutnotaxonLLP.Theformatisnormallyusedforcarryingoutatimeboundproject.
However,pleasenotethatforallformatsofformingalegalentity(Branchorasubsidiarycompany)inJapan“aregisteredofficeaddressinJapan”(notP.O.Box)ismandatory.OptionreformationofalegalbusinessentityinJapanforcommercialbusinessactivities:
TheoptioniseithertoestablishaBranchOfficeoraLocalSubsidiaryCo(eitheraJoint-stockcorporation(Kabushiki-Kaisha)[K.K.]orLimitedLiabilityCompany(LLC)(Godo-Kaisha)[G.K.]).ForanyofthesaidformatstheminimumrequirementisalocaladdressinJapan(notPOBoxaddress)andalocalresidentinJapan(exceptK.K.Co)(eitheraJapaneseoraforeignnationalbutincaseofaforeignnationalthepersonmusthaveanappropriatestatusofresidenceormayrequirechangeofstatusofresidence).
Branchofficeallowsamaximumof2(two)RepresentativeinJapantoberegisteredandashareholder/director/stafffromheadofficecanberegisteredasaRepresentativeinJapanwithoverseasaddressinadditiontothelocalresident.
LocalSubsidiaryCoallowsregisteringdirectorswithoverseasaddressinadditiontothelocalresidentdirector.v NotewithregardtoK.K.CoformationunderthenewregulationeffectiveMar’15.PleasenoteeffectiveMar’15theJapanesegovernmenthasallowedforeigncompanyandorindividualtoregisterJapaneseKKCompanywithdirector(s)andshareholdersresidingabroadandthemandatoryrequirementofatleastonelocalResidentDirectorhasbeenrelaxed!(Butfortheprocedureof“paid-upcapital”
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ofthelocalcoalocalresidentshareholderisrequiredatthetimeofregistration&uponcompletiontheshareoflocalresidentcanbetransferredbacktoforeigncoorindividualforholding100%shareintheJapanKKCo.).
AndthereafterthereportingtoNational&LocalTaxauthoritiesisdonewith100%foreignshareholding.(However,ontheBankofJapanreportingofforeigninvestmentitwillonlyreflectthefactatthetimeofregistrationi.e.99+1share!)
ThepracticalhurdlesthattheforeignownedKKcowithoutalocalresidentdirectormightface(dependinguponthecase)intheareassuchas:
§ InopeningaCorporatebanka/cinJapan;anddependingonthebank&localKKcompany’sproposedactivitiesthesituationmayvarycasebycase!JFYI,localbanksareverystrictinopeningupanordinarycorporatebankaccountevenforlocalJapanesecompanyownedbythelocalcitizenorresident.Usuallyittakesabouttwo(2)weeksforthemtocheckthedocumentsandtoevaluatetoformtheirfinaldecision.
§ Andtheperceptionoflocalbusinesspartner(s)andorclient(s)inJapanabouttheforeignownedlegalentity(KKCo)withoutanylocalresidentdirectorfordoingbusinessinJapan!Thiswouldalsogoingtovarycasebycasedependinguponthenewcompany’spurposeandactivitiesinJapan!
v Tosuggestasuitablelegalformatdependsonanswersonthefollowingissues!:
Choosingtherighttypeoflegalentityformationdependingonthespecificrequirementoftheclient.Andhencetheyneedtoaddressthefollowingbasicissueswhilesendingtheinquiryforquotation:
1](a)Mainreason(s)toestablishalegalentityinJapan?Briefinfo.repastorpresentbusinessactivitiesinJapan(ifany)?(b)BusinessobjectivesandactivitiestobeconductedthroughNewCompany/legalenityinJapan?
2](a)Proposedformofentity:incorporatebranchoralocalsubsidiarycompany?(intheeventyouhavealreadygatheredandstudiedpreliminaryinformationonthesettingupabusinessentityinJapan)
(b)Incaseoflocalsubsidiarycowhatwillbeshareholdingstructure,i.e.IndividualorForeignCompany?
3]WhowillbecomeLocalRepresentativeinJapan(incaseofbranch)&LocalResidentDirector(incaseoflocalsubsidiarycompany)?[KKcanberegisteredwithoutlocalresidentdirector]Theregisteredofficeaddress?Incaseofalocalsubsidiaryco.whatwillbecapitalization?InJ.yen?(Paid-up-capitalamount)
4]Otherrelatede.g.briefinformationonforeigncoorentreprenuer?URL,Coprofile,etc!
Furthermore,informationonthefollowingareawouldbehelpfulinpreparingthecostestimation:
ü Requirementofpost-incorporationmandatoryadministrativeservicessuchas:corporatetaxreturn,book-keeping,staffpayroll,annualyear-endwithholdingstafftaxadjustment,socialinsurance,etc.
ü Anyotheradministrativebusinessservicesandorbusinessoperationalsupportrequired(ifrequired)?
JapanRepresentativeOffice
Representativeofficeisgenerallyestablishedforcarryingoutpreparatoryandsupportingtasksaimedatenablingforeigncompaniestoengageinfull-scalecommercialbusinessoperationsinJapaninfuture.
Representativeofficeisgenerallyestablishedforcarryingoutmarketresearch&liaisonactivitiesonbehalfofheadoffice.ItdoesnotallowtoconductcommercialbusinessactivitiesinJapanandthereforenoregistrationisrequiredatthelegalaffairsbureaunorbesubjectedtocorporatetaxunderJapanesetaxlaws.However,representativeofficesestablishedbyforeignbanks,insurancecompanies,securitiescompanies,orother
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financialinstitutionsareexceptions;priornotificationmustbeprovidedtotheFinancialServicesAgencyforsuchrepresentativeoffices(asstipulatedintheBankingLaw,SecuritiesExchangeLawandotherlaws).
Inprinciple,arepresentativeofficeisnotacompany,whichisregisteredasacorporation.Theofficeformatmaybeusedbyforeigncorporations,whichdonotconductcommercialbusinessinJapanbutexpecttocarryouttheactivitiessuchas:
Ø Advertisingandpromotionalactivities,providinginformation,carryingoutmarketresearch,conductingbasicresearchandotheractivitiestosupporttheundertakingsoftheforeigncorporation.
Ø Purchasing&storingofgoodsonbehalfoftheheadoffice(parentcompanyinoverseas).
MainFeaturesofaRepresentativeOffice
v NoregistrationisrequiredundertheCommercialCodeinprinciple.
v NoreportofdirectinwardinvestmenttotheMinistryofFinanceviatheBankofJapanisrequiredundertheForeignExchangeLaw.
v SincerepresentativeofficesdonotconductbusinessinJapan,theyarenotregardedaspermanentestablishmentsandarethereforenotsubjecttocorporatetaxes.
v Theadvantageofnorequiredreportingdoesnotapply,however,inthecaseoffinancialinstitutionssuchasforeignbanks,insurancecompanies,orsecuritiescompanies.Underthelawsconcerningbanking,foreigninsuranceoperations,andforeignsecuritiesbrokers,suchinstitutionsmustsubmitareportinadvancetotheMinistryofFinance,eventoestablisharepresentativeoffice.
v Theleaseforarepresentativeoffice’sofficespacemaybesignedbetweentheheadofficeinthehomecountryandtheJapanesebuildingowner.Inmanycases,however,theownerwillrequirethattherepresentativeofficehaveaguarantor(residentofJapan)residentinJapan.
v ItispossibleforarepresentativeofficetoopenanordinarysavingsaccountataJapanesebankusinganaccountnamesuchas“TomSmith,XXXInc.RepresentativeOfficeinJapan,”ahybridofindividualandcorporatestatus.
v ArepresentativeofficemaynotdobusinessinJapan,whetheritexpectsaprofitornot.
v ForeigncorporationsintendingtodocommercialbusinessactivitiesinJapanmay,however,notusetherepresentativeofficeformat.Theirchoicesareestablishingabranchofficeorformingasubsidiarydomesticcorporation(LocalCompanyinJapan).
JapanBranch
ForeigncompanieswillingtoengageincommercialbusinessoperationsinJapanmustestablishabranchofficeoralocalsubsidiarycompanyasalegalentityinJapan.
ThesimplestmodeforaforeigncompanytoestablishalegalentityforbusinessoperationsinJapanistosetupabranchoffice.Branchofficecanstartbusinessoperationsassoonasregistrationiscompletedwiththelocalauthorityandallnecessarypost-registrationmandatoryreportingarecompleted.
AbranchofficeofaforeigncompanycarriescommercialtransactionsinJapanasperthedecision/instructionoftheparentcompany,andusuallyisnotexpectedtoindependentdecision-making.
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Abranchofficedoesnothaveitsownindependentlocallegalcorporatestatus,butinsteadisdeemedtobewithintheumbrellaofcorporatestatusoftheparentcompanyoutsideofJapan.AtthetimeofregistrationofabranchinJapanthusthereisnorequirementtoestablishstatutoryofficers/managementbodysuchasdirectors,auditors,abranchneedsarepresentativeonly(aresidentofJapan).
Ingeneral,therefore,theforeignparentcompanyisultimatelyresponsibleforalldebtsandcreditsgeneratedbytheactivitiesofitsJapanbranchoffice.
Abranchoffice,however,canopencompanybankaccountsandleaserealestateinitsownname,carrycommercialactivitiesaspercorporateobjectivesderivedfromparentco,onceitsregisteredinJapan.
Intermsoftherangeofbusinessactivitiesallowed,therearenobasicdifferencesbetweenbranchofficesanddomesticcorporations.
AbranchofficeinJapanisobligedtosubmitcorporatetaxreturntolocalauthoritywithintwomonthsfromthedateofclosingoffiscalyearandfiscalyearisregisteredinJapanaspertheparentcompany'sfiscalyearestablishedin-homecountry.TaxappliesonthenetincomegeneratedinJapanasperlocalregulationandratesappliedaresameasdomesticcompany.
Theproceduresforclosingabranchofficemustalsobecompletedwhenupgradingabranchofficetoasubsidiarycompany.Becauseabranchofficecannotbedirectlyreorganizedintoajoint-stockcorporation(Kabushiki-Kaisha{K.K.})oralimitedliabilitycompany(Godo-Kaisha{LLC}),thebranchofficeclosureproceduresandthesubsidiarycompanyestablishmentproceduresmustbecarriedoutsimultaneously.Insuchinstances,however,thebranchoffice'sassetsmaybepassedontothesubsidiarythroughinvestmentinkind.
SomeBasicdifferencesbetweenOpeningaBranchandEstablishingaDomesticCorporationinJapan
Intermsoftherangeofbusinessactivitiesallowed,therearenobasicdifferencesbetweenbranchofficesanddomesticcorporations.Butregardlessofthefirmbeingforeignornot,somecompanies,dependingonthecategoryofbusiness,arerequiredtosecureauthorizationofthesupervisoryministriesatthetimeoffounding.
ABranchofficeisnotregardedasanindependentlegalentity,butasactingonthebasisofdecisionsandinstructionsfromtheheadofficetoprovideservicesandcarryoutbusinessactivities,includingpurchasing,importing,andsales.Intransactionswithotherbusinesses,thebranchofficeconcludescontractsastherepresentativeofitsheadoffice.
SomemajordifferencesbetweenabranchofficeandAdomesticJapanesecorporation
Eitherabranchofficeoradomesticcorporationmayenterintobusinessactivitiesbyitsownnameasanentity.Taxratesarealsofundamentallythesameforabranchofficeoradomesticcorporation.
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1)Anewmanagementbodyneednotbesetupforabranchandthereisnodetailedstatutoryrequirementforthemanagementofabranch.Whileadomesticcorporationmusthavestatutoryofficersoramanagementbodysuchasdirectors,auditors,boardofdirectorsmeetingsandshareholdersmeetings,abranchdoesnotrequiretodosobutonlyneedsaRepresentativeinJapan.
2)Dividendspaidbyadomesticcorporationtoaforeignshareholderaresubjecttowithholdingtax,whileremittanceofbranchprofitsaftertaxtoitsheadofficeisnotsubjecttowithholdingtax.
3)Expensesincurredbytheheadofficeforitsbranchmaybeallocatedtoitsbranch.
4)Interestorroyaltypaidbytheheadofficeforactivitiesofitsbranch,maybedeductedbyitsbranchalthoughsuchinterestorroyaltyissubjecttowithholdingtax.
Note:InbothbranchorasubsidiaryCoalocalresidentisrequired(RepresentativeinJapanforbranch&LocalResidentDirectorforsubsidiaryCo[exceptforK.K.Co.]),eitheraJapanesenationaloraforeignerwithproperresidentpermitinJapan,andalocalphysicaladdressisrequiredforregistrationofabranchorsubsidiaryCoandnotaP.O.address.
EstablishingaSubsidiaryCoinJapanKKCo(Kabushiki-Kaisha)[Joint-stockcorporation]{KabushikiJotoSeigenKaisha–(IfNoCommitteeisEstablished)}
Or
GKCo(Godo-Kaisha)[LimitedLiabilityCo]LLC
ForincorporationofeitheraKKorGKtheminimumcommoncriteriaisasfollows:-1. Alocalphyisicaladdressforalocalsubsidiaryco’s“RegisteredOfficeaddress”(physicaladdress¬a
POBoxaddress)2. Alocalresident(Japaneseorforeigner)asa"ResidentDirector"(incaseofaforeignerhis/herVisa
statusneedtobeverifiedandifrequiredchangeofstatusmayneedtobeappliedattheimmigrationbureau)[ExceptforK.K.Co.]
ThefollowingfeaturesappliestobothKKandGK:
1.MinimumNumberofDirectors:1(one)(ButincaseofoneorseveralonemustberesidentofJapan[ExceptforK.K.Co.])2.ResidentDirectorRequired:Yes,atleastonemustberesident.[ExceptforK.K.Co.] 3.MinimumNumberofShareholders:1(one)[IncaseogGKeuityholders(Member)&alldirectorsmustbefromMembers]4.CorporateShareholderAllowed:Yes(Incaseofcorporateshareholdingprocedureislengthy&complex)5.ResidentShareholder(Member)Required:No.[Forincorporationprocedureitisnecessarytoallocate1(one)shareinthenameofthelocalresidentshareholder/directorandusehis/herpersonalbanka/ctotransferthecapitalamountfromabroadasforeignconoraforeignresidentcanholdalocalbanka/cinJapan.Uponcompletionofregistrationthisshareistransferredback{throughinternalcodocstatingthetransfer}.Theactualsharepositionneednotificationtotaxofficeandthenameofthepromoter&actualsharepositionreflectsontaxreturndocs.]P.S.Theabove-procedureisadoptedbothforKK&GK.ButincaseofGKthedirectorofacomustbeashareholder/equityholder[Member].(However,ifGKpromoterdecidestostayoutsideofJapanthenthereisnootheralternativebuttoholdshare(equity]remaininthenameoftheresidentdirector/member.)6.Liabilityofequityparticipants/parentcompanytowardcreditors:Limitedtoamountofequityparticipation7.CompanySecretary:Notrequired8.RegisteredOffice:Yes,physicalladdressisrequiredandP.O.Boxaddressisnotallowed.9.MinimumRegisteredCapital:1(one)yen
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10.Timeframeforregistration:Dependsonthetypeofentity,thewaytheclientwantstoformthelegalbusinessestablishment,i.e.Shareholding,Directors,formingstructure,etc.andtheclient'sresponsetimeinthewholeprocess.Oncealldocumentsareready/preparedandappliedatLegalAffairsBureauforregistrationittakesabout2(two)weekstoobtaincompanyregistrationcertificateandcompanysealregistrationcertificate;andourapprox.timeframeforourpreparationofdocumentsandprocedureareindicatedintheflowchartbothforKK&GKCo.11.YearlyAuditingofaccounts:Notmandatory
BasicdifferencebetweenKKandGK:
KK(KabushikiJotoSeigenKaisha)[IfNoCommitteeisEstablished]
GK(Godo-Kaisha)[LimitedLiabilityCo]LLC
Transferofequityparticipationshare
Maybetransferredfreelyinprinciple.MaybestipulatedinarticlesofincorporationthatapprovalofBoardofDirectorsisneededfortransferofshares.
Unanimousapprovalofequityparticipants(members)required
Numberofexecutivesrequired
Appointmentof1ormorerequired.Representativedirectorwithrighttoexecutebusiness.Ifnorepresentativedirectorisappointed,executiveofficerseachhavetherightofrepresentation.#AtleastonerepresentativemusthaveanaddressinandbearesidentinJapan.#(Nomoreundernewlaweff.Mar’15)
Nolegallystipulatedminimum.Inprinciple,allmembersareexecutiveofficers,butarepresentativemembermaybeappointed.AtleastonerepresentativemusthaveanaddressinandbearesidentinJapan.
Legallystipulatedtermofofficeforexecutives
2yearsinprinciple.Extendableupto10years
Nolegallystipulatedterm
PossibilityofaCompanytobeaDirector
Notpossible Possible.However,thecoshouldnominateanindividualstafffromtheco.1(one)mustbeJapanresident.OnregistrationbothCo&individualnamewillappear.
Directormustbefromshareholder(member)
Notnecessarily Must
Regulargeneralmeetingofshareholders(members)
Inprinciple,mustbeheldeveryyear Notrequired
Possibilityofpublicofferofstock(equityparticipationshare)
Possible Notpossible
Possibilityofreorganization Ajoint-stockcorporation(KK)maybereorganizedintoalimitedliabilitycompany(LLC)(GK).
Alimitedliabilitycompany(LLC)(GK)maybereorganizedintoajoint-stockcorporation(KK)
Distributionofprofitsandlosses
Allocatedaccordingtoequityparticipationratio
Maybeallocatedatadifferentratefromequityparticipationrateifspecifiedinarticlesofassociation
Disclaimer:Thisinformationisforillustrationpurpose,nowarrantyisgiventhatitisfreefromerrororomission,andSarkarOffice®cannotbeheldliableforanydecisionmadebasedonthisinformationonly!.
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ComparisonoftypesoflegalbusinessentityinJapanForeigncompaniesorindividualsgenerallyengageinbusinessoperationsbyestablishingabranchoffice,subsidiarycompany,orlimitedliabilitypartnership,andthelegaldifferencesbetweeneachofthesearesummarizedinthefollowingtable. SubsidiaryCompany
BranchOfficeKabushiki-Kaisha
(KKCo)(Joint-stockCorporation){(KabushikiJotoSeigenKaisha)(IfNoCommitteeisEstablished)}
Godo-Kaisha(GKCo)
LimitedLiabilityCo(LLC)
LimitedLiabilityPartnership
(LLP)
Restrictionsonequityparticipation
NotificationnotrequiredwiththeBankofJapan(Exceptcertainindustries)
NotificationmustbefiledtotheBankofJapan
NotificationmustbefiledtotheBankof
Japan
NotificationnotrequiredwiththeBank
ofJapan(Exceptcertainindustries)
Capital Nocapital(sameasHO)
1yenormore(*1) 1yenormore(*1) 2yenormore(if2Partners)
Numberofinvestors Notapplicable 1ormore 1ormore 2ormore(*3)Liabilityofequityparticipants/parentcompanytowardcreditors
Unlimited
Limitedtoamountofequityparticipation
Limitedtoamountofequity
participation
Limitedtoamountofequity
participation
Transferofequityparticipationshare
Noequityparticipationshare
Maybetransferredfreelyinprinciple.MaybestipulatedinarticlesofincorporationthatapprovalofBoardofDirectorsisneededfortransferofshares.
Unanimousapprovalofequity
participants(members)required
Unanimousapprovalofpartnersrequired
Numberofexecutivesrequired
RepresentativeinJapan
1or2(*2)
Appointmentof1ormorerequired(*2).
Representativedirectorwithrighttoexecutebusiness.
Ifnorepresentativedirectorisappointed,executiveofficerseachhavetherightofrepresentation.
Nolegallystipulatedminimum.
Inprinciple,allmembersareexecutiveofficers,buta
representativemembermaybeappointed(*2).
Nolegallystipulatedminimum.Allpartnersareexecutiveofficers(*3).
PossibilityofaCompanytobeaDirector
Notapplicable Notpossible Possible.However,thecomustnominateastafffromtheco.(*2)
Notapplicable
Directormustbefromshareholder(member)
Notapplicable Notnecessarily Must Notapplicable
Legallystipulatedtermofofficeforexecutives
Nolegallystipulatedterm
2yearsinprinciple.Extendableupto10years
Nolegallystipulatedterm
Nolegallystipulatedterm
Regulargeneralmeetingofshareholders(members)
Notrequired
Inprinciple,mustbeheldeveryyear
Notrequired
Notrequired
Possibilityofpublicofferofstock(equityparticipationshare)
Noequityparticipationshare
Possible Notpossible Notpossible
Possibilityofreorganizationintojoint-stockcorporation
Notpossible.Needtoseparatelyclosebranchofficeandestablishjoint-stockcorporation(*4)
- Possible Notpossible.Needtoseparatelydissolvepartnershipandestablishjoint-stockcorporation(*5)
Possibilityofreorganization
Notpossible Ajoint-stockcorporation(KK)maybereorganizedintoalimited
liabilitycompany(GK).
LLP(GKCo)maybereorganizedintoaKK
Notpossible
Distributionofprofitsandlosses
- Allocatedaccordingtoequityparticipationratio
Maybeallocatedatadifferentratefromequity
participationrateifspecifiedinarticlesofassociation
Maybefreelyallocatedwiththeunanimousapprovalof
partners
Taxationofprofits
IncomearisingwithinJapanisinprinciple
taxed
TaxedonprofitsaccordingtoalocalCoandprofitsallocatedtoshareholders
TaxedonprofitsaccordingtoalocalCoandprofitsallocatedto
participants
Notaxationofpartnershipsthemselves.
Taxationofprofitsallocatedtopartners
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(*1)Althoughestablishmentwithcapitalofzeroyenistheoreticallypossible,approvalisgrantedexpostfacto,anditisnotinpracticepossibletoincorporateacompanywithoutpayingincapital.(*2)AtleastonerepresentativemusthaveanaddressinandberesidentinJapan.[ExceptforK.K.CoundernewregulationeffectiveMar’15](*3)OneormorepartnermustbeanindividualwhohasanaddressinandisresidentinJapanformorethan1year,oraJapanesecorporation.(*4)Refer"Closureofbranchoffices".(*5)Refer"Dissolutionandliquidationoflimitedliabilitypartnerships".
Disclaimer:Thisinformationisforillustrationpurpose,nowarrantyisgiventhatitisfreefromerrororomission,andSarkarOffice®cannotbeheldliableforanydecisionmadebasedonthisinformationonly!.
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