What the differences between a joint stock company(Kabushki-gaisya) and a limited liability company(Godo-gaisya)?
There are multiple forms of companies in Japan.
When setting up a company for your business, it is common to choose a joint stock company(Kabushiki-gaisya) or a limited liability company(Godo-gaisya).
You can also start your own business as a sole proprietorship without setting up a company. However, if you need a visa, it is better to set up a joint stock company or a joint-stock company.
If a foreigner wants to start a business in Japan, it is not necessary to find a Japanese collaborator.
Only one foreigner can be an investor and set up a company.
What’s the difference between a joint stock company(Kabushiki-gaisya) and a limited liability company(Godo-gaisya)?
A joint stock company(Kabushiki-gaisya) and a limited liability company(Godo-gaisya) are both limited liability companies and must be registered.
It’s also the same treatment in taxes and in employment.
There is no major difference between a joint-stock company(Kabishiki-gaisya) and a limited liability company (Godo-gaisya) in the establishment procedure except for the cost, but there is a difference in the management of the company.
They differ in the following ways
- Profit sharing
- Role of the investor
- Whether the company can be listed or not
- Fees required for establishment (certification and registration)
- Term of office of officers
- Creditworthiness in Japan
Think carefully about what kind of business you’re going to do and who you’re going to be doing business with.
Profit sharing
In a joint stock company(Kabushiki-gaisya), the investors become shareholders, and profits are distributed according to the percentage of investment.
In a limited liability company(Godo-gaisya) , on the other hand, it is not a percentage of the company’s investment, but rather a decision freely made by the employees who are the investors.
However, as profits grow, there is a possibility that there will be a dispute over profit sharing.
Role of the investor
In a joint-stock company(Kabushiki-gaisya), the investors become shareholders after the establishment of the company.
The investor does not automatically become an officer involved in the management of the company.
In a limited liability company(Godo-gaisya), the investors become responsible person and participate in the management of the company.
Whether the company can be listed or not
A joint-stock company(Kabushiki-gaisya) can be listed.
On the other hand, a limited liability company(Godo-gaisya) can NOT be listed.
Fees required for establishment(certification and registration)
| A joint-stock company(Kabushiki-gaisya) | |
| Certificate of Incorporation | \50,000- |
| Registration and License tax | \150,000~ |
| A limited liability company(Godo-gaisya) | |
| Certificate of Incorporation | No certification required |
| Registration and License tax | \60,000- |
Term of office of officers
In the case of a joint stock company(Kabishiki-gaisya), the term of office of the officers is between 2 and 10 years.
You can choose a term of office between 2 and 10 years.
If you want to continue as an officer after the end of your term of office, you will have to register again.
A limited liability company(Godo-gaisya), on the other hand, does not have to set the term of office of its officers.
Creditworthiness in Japan
If you are in the business of doing business between companies, a joint stock company(Kabushiki-gaisya) is more likely to be trusted.
In Japan, a joint stock company(Kabushiki-gaisya) is still more credible in BtoB business.
If your business is aimed at the general public, a limited liability company(Godo-gaisya) would also be a good choice.
For financing, neither form of financing is different, as it is judged by previous performance and business plan.
There is no major difference between a joint-stock company(Kabishiki-gaisya) and a limited liability company (Godo-gaisya) in the establishment procedure except for the cost, but there is a difference in the management of the company.
Think carefully about what kind of business you’re going to do and who you’re going to be doing business with.