Godo Gaisha Vs Kabushiki Gaisha: A Comparison

Steve Crane chats with Yoko Majima, a certified Japanese gyosei shoshi lawyer who specialises in market entry for international companies, to learn about the various options for setting up a business in Japan. View our podcast here and read the overview below:

Differences between Godo Gaisha and Kabushiki Kaisha

Kabushiki Kaisha, commonly referred to as KK, and Godo Gaisha, abbreviated to GK, are both types or corporations in Japan. Only KKs, however, can be publicly traded in Japan.

KKs are typically larger, more akin to medium or large sized companies, while GK are closer to small and medium sized enterprises. KKs also have more requirements and set-up costs than GK.

Switching from a KK to a GK or a GK to a KK is feasible, but can be a complex process in Japan.

Similarities Between Kabushiki Kaisha and Godo Kaisha

Both GKs and KKs are subsidiary companies, and are considered to be separate from their parent companies abroad. In both cases investors face limited liability, and this is relative to the amount of money invested in the corporation.

It takes just one person to establish either type of corporation in Japan, and shareholders may be of any nationality.

The timeframe for incorporation is one to two months.

With new regulations having been implemented in 2006, the minimum capital required is only JPY1, but a minimum amount of registration tax is due when incorporating. This registration tax is calculated as the capital multiplied by 0.7%, with a minimum sum of JPY150,000 for KKs and JPY60,000 for GKs.

Differences Between Kabushiki Kaisha and Godo Kaisha

KKs are the more common type of subsidiary in Japan, as they date back to 1873, the date of the very first incorporation in Japan. GKs in comparison have only been around since 2006, when the Japanese Government changed regulations of companies doing business in Japan.

KKs face a higher registration fee when incorporating, and must also notarise special documents called articles of incorporation. These usually comprise Articles of incorporation usually comprise the following information: the names of your business and management, the amount of capital, share information, a detailed business plan, your head office location and the method of public notice.

Annual requirements that KKs face include shareholder meetings and public announcements of financial statements. Neither of these are required of a GK.

With a GK, when voting on important company matters, any decision must be approved unanimously, whereas voting power in a KK is relative to the amount of financial investment.

Last updated January 2024: Steve Crane OBE


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