Stock Company Incorporation (Kabushiki Kaisha)
Stock Company Incorporation Overview
The Stock Company (KK) is one type of corporate entity which can be incorporated under the Companies Act of Japan.
Through the incorporation of a KK, the investors (either individuals or corporations) become shareholders of the new company and each shareholder assumes limited liability up to the amount which they have invested.
Shareholders acquire the right to vote at company shareholder meetings and receive dividends from company earnings.
A KK differs from the branch of a foreign company in that it is a completely independent entity and all credits and liabilities belong directly to the company.
The KK has a much longer history than other forms of corporate entities, such as a Godo Kaisha, and therefore is by far the most common and well-known type of business entity in Japan.
Stock Company Incorporation Procedures
When incorporating a KK, basic company details such as the Trade Name, Head Office Location, Business Purposes, Company Officers, Capital and other matters must first be decided. When deciding on these details, numerous factors must be considered.
The process of incorporation can be broadly separated into (i) drafting of the Articles of Incorporation, (ii) notarization of the Articles of Incorporation, (iii) investment of paid-in capital and (iv) incorporation registration.
In addition, the incorporation procedures require the creation of numerous other documents all of which must be written in Japanese.
The following chart briefly summarizes the steps required to incorporate a KK.
Please expect the process to take approximately one to two months from commencement to the completion of registration.
- 1. Decide details of the Company
- The investor (promoter) decides on the basic matters of the company such as the Trade Name, Head Office Location, Business Purposes, Officers, and Capital Amount.
- 2. Drafting the Articles of Incorporation
- After the details of the company have been decided, Articles of Incorporation must be created which specify the Trade Name, Head Office Location, Business Purpose and other rules of the company.
- 3. Notarization of the Articles of Incorporation
- The Articles of Incorporation of the company need to be notarized by a Notary Public in Japan. This is one major difference from a Godo Kaisha, which does not require notarization of the Articles of Incorporation.
- 4. Payment of capital contribution
- Once the Articles of Incorporation have been notarized, the investor (promoter) must deposit the capital amount into a bank account of a financial institution in Japan registered under the name of the promoter or the Representative Director.
- 5. Incorporation registration of Stock Company
- Submit an application for registration with supporting documentation to the Legal Affairs Bureau to register the Trade Name, Head Office Location, Business Purposes, Officers, Capital and other matters of the company.
- 6. Commence business activities
- Business activities may commence from the date of registration. Once the registration has been completed, company bank accounts may be opened and various notifications to the tax and social insurance authorities must be submitted.
Generally speaking, the following documents are required for KK incorporation.
All documents must be created in Japanese (English versions are only considered reference translations).
Articles of Incorporation
This document sets forth the basic rules with respect to the company to be incorporated. The Articles of Incorporation must be notarized by a Notary Public in Japan.
Registered Seal Certificate (or Signature Certificate) of the Promoter or Representative Director
As part of the process for the notarization of the Articles of Incorporation, the registered seal certificate of the promoter or Representative Director must be submitted to a Japanese Notary Public. For foreign nationals who have not registered a personal seal with their local government office, a Signature Certificate may be used as an alternative. The Signature Certificate must be notarized by a Notary Public or consul of the foreign national’s same nationality. We can provide a Signature Certificate template as a part of our services.
Proof of Paid-In Capital
This refers to documentation that demonstrates that the capital amount has been paid-in. A copy of the bankbook of the Japanese account into which the capital was paid is submitted as part of the incorporation registration for this purpose.
Acceptance of Office Letters from each Officer
All officers at the time of incorporation of the company must provide an Acceptance of Office letter with a seal attached. In the case of foreign company officers who do not have seals, signatures are accepted as an alternative.
Registered Seal Certificate of Officers (Signature Certificate)
The registered personal seal certificate of each Director is required. For foreign nationals who have not registered a personal seal with their local government office, a Signature Certificate may be used as an alternative. The Signature Certificate must be notarized by a Notary Public or consul of the foreign national’s same nationality. We can provide a Signature Certificate template as a part of our services.
In Japan it is customary to use seals rather than a signature on official documents. Therefore, a Company Seal is required, and an imprint of the seal of the Representative Director will need to be registered with the Legal Affairs Bureau of Japan. We can order the necessary seals for our clients. The cost of seals can vary considerably depending on the material used to make the seal.
For cases when the promoter is a corporation
Certificate of Registered Matters (or Affidavit) of the Promoter (corporation)
When the promoter is a corporation, at the time of notarization of the Articles of Incorporation, a Certificate of Registered Matters (of the promoter) must be submitted to the Notary Public.
In the case of foreign (non-domestic) corporations where a Certificate of Registered Matters is not obtainable, an Affidavit containing the necessary details is prepared and notarized by a Notary Public of the home country of the corporation, or a consul of the home country of the corporation at an embassy or consulate in Japan. As part of our incorporation service, we will draft the required Affidavit; however, we will require copies of the Articles of Incorporation of the foreign company and other documents which form the basis of the Affidavit.
The Affidavit will need to be signed by an officer of the foreign company.
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