The Kabushiki Kaisha (KK) is the most common type of company in Japan. In English it is often translated or referred to as a “joint stock corporation,” and KKs typically use “Corporation,” “Incorporated,” or “Co., Ltd.” in their name.
In order for a company to qualify as a KK, it must have a Representative Director and a shareholder. The titles may be carried by the same individual, as long as he or she is able to fulfill the mandatory qualifications for both positions.
Advantages of incorporating as a Kabushiki Kaisha (KK)
Compared to Godo Kaishas (GKs), KKs enjoy the benefit of being an easily recognized and trusted business structure with banks, investors, other companies, and the general public. This is a result of it being a more widely known company structure, as the GK was only introduced in 2006. A KK also has the ability to sell company shares, issuing stock options, and other methods to raise funds. This allows a KK to have more potential for expansion.
In addition to this, the KK structure is appropriate when a company needs directors who are not shareholders, or investors who would prefer not to be involved in the daily duties of operating a company.
Procedure for establishing a Kabushiki Kaisha (KK)
Before beginning the process of incorporating a company as a KK, some materials should be prepared. These include:
- A personal seal: For the director and investor. It is possible to use signature as an alternative, but a certified proof of signature would be required from the local Japanese consulate or notary republic.
- A corporate seal: A corporate seal is required for validating or accepting documents on the behalf of the company. Must be registered under the name of the representative directors of the company with the bureau for official use.
- An office address: A location where the company can be registered. Depending on the circumstance, it may also be required to have a dedicated physical office space.
- A Japanese bank account: A bank account is needed to receive initial capital. Many banks in Japan require that the holder of the account be a resident. (This doesn’t need to be the company’s account. It’s just a holding account in Japan to be used until the company is able to establish its own bank account.)
- A Representative Director: Although not necessary, it is recommended to appoint a local representative, as a resident is often needed to open a bank account and for the initial incorporation.
- Articles of Incorporation (Teikan): Should include company name, company address, company’s activities, a list of the administration, amount of initial capital, fiscal year.
Once a office address is found and the Articles of Incorporation (Teikan) are prepared, the Articles must be notarized and the revenue stamp fee paid. This can be done at the Notary Office (Koshonin Yakuba). Following this, initial capital must be deposited using an investor’s personal Japanese bank account. Additional documents (eg. notification of the company’s seal, letter of agreement from directors, etc.) must then be prepared. The application for the company registration must then be filed at the Registry Office (Honmokyuku). On registration is completed, it is possible to acquire a registry certificate and company seal certificate. A bank account under the company’s name may then be opened.
This process typically requires a total of 2 to 4 weeks, but may take longer if special business licenses are required.
Costs of establishing a Kabushiki Kaisha (K.K.)
- Notarization fee: 50,000 yen
- Revenue stamps: 40,000 yen
- Registration fee: Minimum 150,000 yen
- Administrative fees: 150,000-300,000 or more depending on the firm used.
Please note that it is possible to change from Kabushiki Kaisha (KK) to Godo Kaisha (GK.) in the post incorporation. In general, if there are sufficient funds and will work often with Japanese companies, KK should be chosen. In addition to this, if it is intended to have other investors in the future or shares will be transferred or sold, KK should be chosen.
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