{"id":358,"date":"2018-09-28T16:07:26","date_gmt":"2018-09-28T07:07:26","guid":{"rendered":"https:\/\/shimada-associates.com\/en\/?p=358"},"modified":"2018-09-28T16:09:38","modified_gmt":"2018-09-28T07:09:38","slug":"differences-between-a-stock-company-kabushiki-kaisha-kk-and-japanese-llc-goudou-kaisha-gk","status":"publish","type":"post","link":"https:\/\/shimada-associates.com\/en\/differences-between-a-stock-company-kabushiki-kaisha-kk-and-japanese-llc-goudou-kaisha-gk.html","title":{"rendered":"Differences between a Stock Company &#8220;Kabushiki Kaisha (KK)&#8221; and Japanese LLC &#8220;Goudou Kaisha (GK)&#8221;"},"content":{"rendered":"<h3><span style=\"font-weight: 400;\">Types of company in Japan<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Japanese Companies Act governs four types of \u00a0company as below.<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul style=\"list-style-type: square;\">\n<li><strong>Stock Company\u00a0&#8220;Kabushiki-Kaisya (KK)&#8221;<\/strong><\/li>\n<li><strong>General Partnership Company &#8220;Gomei-Kaisya&#8221;<\/strong><\/li>\n<li><strong>Limited Partnership Company &#8220;Goushi-Kaisya&#8221; and<\/strong><\/li>\n<li><strong>Limited Liability Company &#8220;Goudou-Kaisha (GK)&#8221; which is known as LLC (Japanese)<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Among these, LLC (Japanese) is relatively new and was created by the Companies Act enforced on 1<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> May 2008.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A General Partnership Company is organized by investors of unlimited liability and a Limited Partnership Company is organized by those of both unlimited and limited liability. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since they need unlimited partners, these two types have not lately been used to establish a company. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"text-decoration: underline;\"><strong>Generally, it would better for foreign investors to choose Stock Company or LLC (Japanese) for their company type.<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">What is LLC (Japanese) ?<\/span><\/h3>\n<p>LLC (Japanese) is officially Goudou-Kaisya (GK) as above.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A characteristic of LLC ( Japanese) is that investors are the same as managers and they are limited liability partners. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Therefore <span style=\"text-decoration: underline;\">management can make a quick decision<\/span>. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, they do not take responsibility beyond investment and a risk is limited compared with unlimited liability partners. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">As far as these characteristics are concerned, LLC (Japanese) is similar to LLC (America).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Pros and cons of LLC (Japanese)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A merit of LLC (Japanese) is that the expense to establish LLC (Japanese) is relatively low.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">With regard to certification of articles of incorporation, it is necessary for a Stock Company to be certified by a notary public at 50,000 yen, on the contrary no certification is required for LLC(Japanese). <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since it takes a certain amount of time and requires a lot of paper work to get notary public certification, no certification is preferable if you need to shorten the time to incorporate. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Another merit is that the minimum amount of registration and license tax for incorporation is 150,000 yen for a Stock Company whereas it is 60,000 yen for LLC (Japanese).<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In addition, high flexibility of profit distribution and non-mandatory public notice of financial statements are also merits of LLC (Japanese).<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">LLC (Japanese) is a relatively new company type created in 2008 and less recognized compared with Stock Company. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">However awareness of LLC (Japanese) has lately been increasing, therefore the number of investors choosing LLC (Japanese) is also increasing. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is a risk that if an investor resigns and requests withdrawal of his investment, capital decreases even though the Companies Act sets a certain limit. <\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">Comparison between Stock Company and LLC (Japanese)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Comparison between Stock Company and LLC(Japanese) is as follows.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-365\" src=\"https:\/\/shimada-associates.com\/en\/wp-content\/uploads\/comparison-between-stock-company-and-LLC-Japanese.png\" alt=\"comparison between stock company and LLC (Japanese)\" width=\"810\" height=\"557\" srcset=\"https:\/\/shimada-associates.com\/en\/wp-content\/uploads\/comparison-between-stock-company-and-LLC-Japanese.png 810w, https:\/\/shimada-associates.com\/en\/wp-content\/uploads\/comparison-between-stock-company-and-LLC-Japanese-300x206.png 300w, https:\/\/shimada-associates.com\/en\/wp-content\/uploads\/comparison-between-stock-company-and-LLC-Japanese-768x528.png 768w\" sizes=\"auto, (max-width: 810px) 100vw, 810px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">How Japan\u2019s tax law handles LLC (Japanese) <\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Goudou-Kaisya &#8220;GK&#8221; is expressed as Limited Liability Company in English but foreign investors should take note that LLC (Japanese) is different from LLC (America) on taxation.<\/span><\/p>\n<p>Both LLCs have limited liability investors and juridical personality, however LLC (Japanese) cannot choose pass-through taxation and is imposed to corporate tax.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Foreign investors should pay attention that they should not believe LLC (Japanese) can choose pass-through taxation because of the same abbreviation as LLC (America). Otherwise, it might happen that they have to reorganize LLC (Japanese) to become a Stock Company if their purpose only focuses on a merit of pass-through taxation.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">With regard to tax on profit, a Stock company is subject to taxation on corporate profit and dividends to shareholders and LLC (Japanese) is also taxed on their profit and dividends to partners. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Therefore, from the tax point of view there is no difference between a Stock Company and LLC(Japanese) in Japan.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>Other Articles<\/p>\n<ul style=\"list-style-type: disc;\">\n<li><a href=\"https:\/\/shimada-associates.com\/en\/corporate-income-tax-return-in-japan.html\" target=\"_blank\">Corporate income tax return filing in Japan<\/a><\/li>\n<li><a href=\"https:\/\/shimada-associates.com\/en\/individual-income-tax-return-in-japan-2017-2018-latest.html\">Individual income tax return filing in Japan for foreigners<\/a><\/li>\n<li><a href=\"https:\/\/shimada-associates.com\/en\/comparison-subsidiary-company-branch-office-doing-business-in-japan.html\" target=\"_blank\">Comparison of &#8220;Subsidiary company&#8221; and &#8220;Branch office&#8221; Which is better for doing business in Japan<\/a><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Types of company in Japan Japanese Companies Act governs four types of \u00a0company as below. &nbsp; Stock Company\u00a0&#8220;Kabushiki-Kaisya (KK)&#8221; General Partnership Company &#8220;Gomei-Kaisya&#8221; Limited Partnership Company &#8220;Goushi-Kaisya&#8221; and Limited Liability Company &#8220;Goudou-Kaisha (GK)&#8221; which is known as LLC (Japanese) &nbsp; Among these, LLC (Japanese) is relatively new and was created by the Companies Act enforced [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-358","post","type-post","status-publish","format-standard","hentry","category-incorporation-visa","category-latest-news"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/posts\/358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/comments?post=358"}],"version-history":[{"count":11,"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/posts\/358\/revisions"}],"predecessor-version":[{"id":370,"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/posts\/358\/revisions\/370"}],"wp:attachment":[{"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/media?parent=358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/categories?post=358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shimada-associates.com\/en\/wp-json\/wp\/v2\/tags?post=358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}