Stock Company vs. Godo Kaisha
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| Stock Company (Kabushiki Kaisha) |
Godo Kaisha | ||
|---|---|---|---|
| Setup | Incorporation Expenses (Does Not Include Professional Fees) | Approximately 250,000 yen | Approximately 100,000 yen |
| Registration Tax: Capital amount multiplied by 0.7% (minimum 150,000 yen) Notarization of Articles of Incorporation: approximately 50,000 yen |
Registration Tax: Capital amount multiplied by 0.7% (minimum 60,000 yen) Notarization of Articles of Incorporation: not necessary |
||
| Incorporation Procedures | Since notarization of the Articles of Incorporation is required, procedures are somewhat more complex | Since notarization of the Articles of Incorporation is not required, procedures are somewhat simpler | |
| Time Required | Normally 1 to 2 months | Normally 1 to 2 months | |
| Features | Corporate Status | Yes | Yes |
| Investor Liability | Limited liability | Limited liability | |
| (Limited to the amount invested) | (Limited to the amount invested) | ||
| Recognition | Most common type of company in Japan, highly recognized due to its long history in the Japanese corporate world | Relatively new type of corporate entity (introduced in 2006) and thus generally less recognized | |
| Not an issue depending on the industry type | |||
| Minimum Capital | 1 yen | 1 yen | |
| Minimum Persons Required | Can be incorporated by one (1) person | Can be incorporated by one (1) person | |
| When the investor is a company (promoter), in addition, one person is required as a Director | When the investor is a company (member), in addition, one person is required as an operation manager | ||
| Articles of Incorporation | Corporate governance rules set in the Articles of Incorporation are limited to the regulations in the Companies Act | Relatively more relaxed as compared with a KK (distribution of profits and other matters may be freely decided) | |
| On-Going Requirements (Under the Companies Act) | ・Annually: Annual General Meeting of Shareholders, public notification of financial statements | ・Annually: none | |
| ・Term of Office of officers: Re-appoinment of officers, registration | ・As officers do not have Term of Office limitations, re-appointment not necessary | ||
Additional Notes
- Both entities have corporate status and the liability of investors is limited to the amount invested, thus for small sized businesses, there is little difference.
- If considering future business expansion, it may be easier to attract future investment with a KK.
- Conversion from a Godo Kaisha to a Stock Company is possible.
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