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Voting right of Stock company and LLC in Japan

Stock company can invite investors  


Stock company can invite investors

When you want to incorporate a company in Japan ( you are incorporator ), you can select Kabushiki kaisha ( KK = Joint stock company = 株式会社 )  or Godo kaisha ( limited liability company = LLC =GK =  合同会社 ).

If you have incorporated Kabushiki kaisha or Godo kaisha, you can obtain legal personality.
Basically, there is not difference between two as for taxation.
And liability of investor ( shareholder ) is limited in both cases.

Main differences are whether there is distinction between ownership and management, cost to incorporate.

When someone wants to collect money to launch business, they incorporate joint stock company and find investors.

Investors ( = shareholders ) can receive dividends when business of the company goes well.

In the case of Godo kaisha, ownership and management coincide with each other.

When Mr Yamada invests his money to incorporate Yamada Godo kaisha, in general he manages this company.

He can not appoint a person as representative person other than investors to this company.

However, when there are some investors ( shareholders ), all investor can appoint managing person from investors, termed “managing partner” .

He is called ” Gyomu shikko shain  “.

He is similar to director of joint stock company with board of directors.

Comparison of cost to incorporate stock company and LLC

Stock company needs to file registration periodically

In order to make stock company, bank account in Japan is necessary

She (a person who hopes to incorporate a company in Japan )needs to determine incorporator.

If she wants to make a joint stock company with other person ( Named Mr.Taro ), Taro can contribute some money.

Assumed that  she contributes 2 million yen and Taro contributes 1 million yen ( Taro is one of incorporator.  Stated capital amount is 3 million yen ).  In this case, proportion of shares should be she : Taro = 2 : 1.

And voting right of she and Mr.Taro will be 2:1 basically.

However in the case of Godo Kaisha, proportion of voting right does not coincide with proportion of amount invested basically.

So, she and Mr.Taro has equal voting right.

When she solicits contribution from other person, she needs to select reliable person. If she and Taro make conflict each other in the future, it will inflict operation of her business.

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