Even while the cultural impact is substantial at first, especially for EU or US entrepreneurs, Japan, as one of the most industrialized countries in the world, attracts thousands of investors each year. The business models are mainly comparable to those used around the world.
There are three types of businesses: sole proprietorships, corporations, and partnerships. Limited partnerships (Go-shi Gaisha) and general partnerships (Go-mei Gaisha) are the two types of partnerships. The firms may be limited liability companies (Goudou-Gaisha) or joint-stock companies (Kabushiki Kaisha).
The sole proprietorship in Japan
In Japan, a sole proprietorship is the most common business structure. Is founded by a single owner who is liable for the company’s debts but can keep the profits. His assets are not protected from creditors’ claims in the event of liquidation. In comparison to other business forms, company registration in Japan is easier for this one.
The joint-stock company in Japan
Those looking to start a business in Japan prefer the joint-stock company since it may be formed with a minimal amount of money, as low as 1 JPY. It must have at least one founder who is also the sole shareholder; the founder might be a natural or legal person.
An open Kabushiki Kaisha’s management is ensured by a board of directors, which must include at least one film director. According to the Companies Law, in circumstances where the participation of all the appointed directors is required, the company chairman and president may have limited decision-making authority. The directors of this form of a company are appointed for one to 10 years and can be reelected or appointed for a two-year fixed term. The distinction is between the firm’s capital and total liabilities, as well as whether or not the corporation is subject to share transfer limitations.
A representative director will be required for a joint-stock corporation who will have the authority to engage in business and carry out the activities. If no such director is nominated, the company’s executive officers will be able to represent it.
The limited liability company in Japan
In Japan, the limited liability company (Godo-Kaisha) is a popular corporate structure for small and medium businesses. Members of a limited liability company in Japan have their responsibility limited by their capital contribution, as the name implies. It is not required to have a minimum number of legally mandated executives or a regular general shareholder’s meeting. The managers are chosen for an unspecified amount of time.
The major distinction between a joint-stock corporation and a limited liability business is that the former can sell its stock to the general public, whereas the latter cannot. If all of the company’s members agree, a Godo-Kaisha may be reformed as a joint-stock company if the founders believe it is a good idea or if they want to expand the firm.
The general partnership
A general partnership is a type of business in which members come together under the same name and share the same goals. The Japanese general partnership differs from the traditional general partnership in that the latter can be created by a single member.
The hazards of forming this sort of company are undeniable: if the partnership is unable to pay its debts and obligations, the participants’ assets may be taken.
The limited partnership
The limited partnership is made up of two sorts of members: general partners with unlimited liability and silent partners with liability restricted to their contribution to the partnership’s capital. The members’ assets, like those of general partnerships, are not protected in the event of liquidation.
A limited liability partnership can be formed by investors. As its name implies, it provides the same limited liability (up to the amount of capital contributed) as a limited company, but with the advantages of a partnership (sharing the business goals and collaborating towards them).
The branch of a foreign company
Aside from forming a limited liability company or a joint-stock company, foreign investors who want to start a business in Japan can organize a branch office. As the branch representative, a Japanese resident must be nominated. A simpler formation method benefits foreign companies: they must designate a local representative, forward the foreign company’s documentation, and establish a local business location. For earnings earned in Japan, branches are taxed at the same corporate income tax rate as their parent company.
