Strictly speaking, 5 types of companies exist in Japan and list them as
below by the order of popularity in recent years:
| List of 5 company types | ||
| 1. | Company Limited (Co.,Ltd.) | Most popular traditional type. |
| 2. | Limited Liability Company(LLC) | Similar to U.S. version of LLC. |
| 3. | Limited Company(YUUGEN-GAISYA) |  No longer establishable |
| 4. | Partnership(GOUSHI-GAISYA) |  A small company for min. 2 persons required. |
| 5. | Unlimited Partnership(GOUMEI-GAISYA) | A small company for min. 1 person required. |
As stated above, 1. Company Limited (Co.,Ltd.) is a traditional company type and consists majority of companies in Japan and 2. Limited Liability Company (LLC) comes in the second position.
Please importantly be noted that the past requirement of minimum capital
amount of JPY10million for establishing Company Limited (Co.,Ltd.) was abolished in 2006, and the company type can now theoretically
be establishable with JPY 1 like the case of Limited Liability Company (LLC).
However, you had better not take it literally since nothing much you can
do with just having JPY 1.
Considering reality, as a foreign resident, minimum 5 million JPY should at least be made for capital amount because there exists a requirement with a minimum capital amount of JPY 5 milliom for the company in case you apply for the visa status, Business Management.
No.3, Limited Company(YUUGEN-GAISYA) is an old company style and no longer establishable.
No. 4 Partnership(GOUSHI-GAISYA) and No. 5. Unlimited Partnership(GOUMEI-GAISYA) are quite unpopular and old style, and thus we do not recommend you to consider for these companies for your establishment.
Contrast the major 2 company types - Company Limited (Co.,Ltd.) and Limited Liability Company (LLC).
Please see the list of contrast bewteen the 2 major company types, - 1. Company Limited.(Co., Ltd.)
- 2. Limited Liabiity Company (LLC)
| 1. Company Limited(Co.,Ltd.) | 2. Limited Liability Company(LLC) | |
| Decision Making | Stockholder's meeting | General Meeting of members |
| Ownership | Stockholders | Each Representative Partner |
| Executor | Director | Executor |
| Relationship between Ownership and management | Divided | No distinction |
| Length of Director | Usually 2years, 10years for the longest. | Unlimited |
| Number of auditor | Minimum 1 person | Not required |
| Representative of the company | President | Each representative Partner |
| Publication of financial Satement | Mandatory | Not required |
| Article of Association | Must Publicly be authorized | No authorization required |
| Gainsharing | According to proportion of investment ratio | Irregardless proportion of investment ratio by Article of Assiciation, |
| *Cost of Establishment | JPY280,000+ | JPY160,000+ |
| Fund Raising | Stock Market, etc. | Can not issue Stocks |
| SUMMARY | ||
| In terms of freedom of running a company, Limited Liability Company(LLC) is more suitable due to existence of clear distinction bewteen ownership and decision making. Whereas credibility is higher with Company Limited (Co., Ltd.) since majority of large companies in japan are this type and many of them are stock listed companies. However, the trend has been less prominent than before especially knowing the fact that AMAZON Japan and GOOGLE are both Company Limited (LLC). | ||
Points to think of when establishing a company
It would be constructive if you take into account of the points in the chart below as determining factors for choosing type of company under your plan.
| Company Limited(Co.,Ltd.) | Limited Liability Company(LLC) | |
| Description of Business | "Things(produtcs)" will be center of capital. | "People" will be center of capital. |
| Scope of Business | You think that your target business partners are big companies irregardless the size of your company. | A small size company in a stage of startup. |
| Fund Rasing | -Rasing funds from stock market. - Trying for stock listing your company. |
Not requiring fund rasing on a big scale. |
| Other | - You need the title of "Representataive Director". - Wishing to improve your external credibility. |
- Incorporation for a small amount of money or needing legal status urgently. -You value management freedom. |
Having covered mianly the major 2 company types, if you wish to check further on the other minor 2 company types, please check them from the left side bar.
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