II. Procedure for Setting Up a K.K.

http://www.japanlaw.co.jp/corp/incorp.html

II. Procedure for Setting Up a K.K.

V. Procedure for Setting Up a K.K. Most Japanese corporations are in either the Kabushiki Kaisha (`KK`) or Yugen Kaisha (`YK`) forms, and since setting up a KK is most popular among both Japanese and foreign investors, we will explain about setting up a KK in this WebPage. Steps Incorporators The Commercial Code specifies that there must be an incorporator in order to incorporate a K.K. Only one incorporator may incorporate a K.K. The Commercial Code does not restrict who can be an incorporator, so generally, any entity can be an incorporator. A corporation can be an incorporator as long as its involvement in the incorporation process is within the purposes of the corporation specified in its Articles of incorporation. There are no restrictions on foreigners being an incorporator. Articles of Incorporation (Teikan) The first step for the incorporator(s) is to make and execute the articles of incorporation. The provisions of the articles of incorporation can be divided into 3 legal categories: Category 1 (necessary provisions) consists of provisions that must be included in the articles of incorporation and legal for the articles of incorporation to be valid. Category 2 (relative provisions) consists of provisions that will not affect the validity of the articles of incorporation, but those that will affect the legal relationship of the company. Category 3 (optional provisions) consists of provisions that will affect neither the validity of the articles of incorporation nor the legal relationship of the company, but those that will make the running of the corporation more convenient and efficient. Articles of incorporation must be in Japanese and should include the following provisions: 1) Purpose(s) of KK The Office of Corporate Register in Japan (Homu-Kyoku) will not accept all purpose clauses (which are commonly used in the U.S.), and the articles of incorporation should be specific as to the purpose(s) of the K.K. If the provisions of the purpose clause include vague or ambiguous words, Homu-Kyoku will require you to correct the provisions. Thus, you should consult with Japanese attorneys, legal subscriber (Shiho Shoshi) or Homu-Kyoku on this point. Homu-Kyoku has an information table, and consulting with them is the least expensive method, but you should be able to speak and write Japanese to communicate with a staff of the Homu-Kyoku. You are encouraged to include in the purpose clause all potential types and kinds of dealings that the business might be interested in, since amendments to the articles of incorporation will need the approval of shareholders and incur costs. 2) Corporate Name There are several guidelines for the corporate name. a) The name must include `Kabushiki Kaisha`, in such ways as `Kabushiki Kaisha XXX` or `XXX Kabushiki Kaisha` b) The part of the name (the above XXX part) should be in Japanese language, at least in Katakana. `Kabushiki Kaisha` should be in Chinese character (Kanji). c) If a corporation of any similar name is already registered or such name is reserved at Homu-Kyoku (reserving a name for one year is allowed, for a fee) in

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000. etc. and it should do it in the way provided for in articles of incorporation. but there is an indirect restriction from minimum capital amount mentioned in (6) below.000. The articles of incorporation becomes effective after being sealed by incorporators and notarized before a Japanese Notary Public. Procedure for Setting Up a K. Also. http://www. 7) Deleted.000. 8) Address of Principal Office There is no system to register a business address separately from registered address. Asahi. In addition.jp/corp/incorp. in such case the price of such unvalued share should be at least Yen 50. 5) Deleted. 4) Amount of Valued Share The minimum value per share is Yen 50.K. In certain situations.html the same venue at the Homu-Kyoku where the new corporation is planning to have its registered office.000. you should check with the Patent Office if there is a similar trade name or service name registered there. Its costs are detailed in the next section.000 (Yen 3. Homu-Kyoku will reject the application for registration in such a name. such as Nihon Keizai Shimbun. except the commission of Notary Public for notarization of Articles of Incorporation and the commission of bank for handling the receipt of the amount of shares. Mainichi. There are few cases where unvalued shares are issued. After creating the articles of incorporation. the one who has used such a name could protest against you under the Law for Preventing Unfair Trade for your use of such a name in the same industry. Notice in local newspapers. because even if such name is not registered at Homu-Kyoku or Patent Office. this number should not be more than four times as many as the number of shares already issued.000.000 or more. you should refrain from using well-known trade names.japanlaw. you should first check if there is a corporation of similar name in the same venue at the Homu-Kyoku. 9) Way of Public Notice. Also. non-daily newspapers or newspapers in a particular industry will not meet the notice requirement. 6) The Number and Kinds of Shares issued at the time of incorporation The minimum capital amount of KK is Yen 10.000 for Yugen Kaisha). Commercial Code requires KK to make a public notice. 3) The Number of Shares to be issued Authorizing the issuance of only one share is not prohibited by the Commercial Code. the incorporators shall invite 2 of 3 10/4/10 12:12 AM . Many corporations provide the notice by Government Gazette to save costs. the provisions to set the procedures and details are to be included in articles of incorporation in accordance with Article 168.co.II. 10) Names and Addresses of Incorporator(s) 11) Others If the following situation occurs during the process of incorporation. a) whether any incorporator will receive any reward or benefit. Others designate a certain national daily newspaper. Therefore. b) whether any incorporator will submit any asset or benefit other than cash at the time of incorporation of the KK c) whether KK will assign any of the assets of KK after incorporation d) whether KK will pay any cost for setting up KK. and the value of a share times the number of shares issued at the time of incorporation should be Yen 10.

Copyright 1996. the incorporation process is completed. For registration before Homu-Kyoku. In case the situations provided in Article 168 occurs as mentioned above.II.Relevant Provisions Attachment 4 Sample Articles of Incorporation Back to Home Page 3 of 3 10/4/10 12:12 AM . Procedure for Setting Up a K. the incorporators must convene a constituent general meeting.K. In the constituent general meeting. the incorporators must apply to the Court for an appointment of an inspector to investigate particulars mentioned in Article 168.K.jp/corp/incorp. Japan OUTLINE of Setting up a corporation in Japan I. Nakamura & Associates.html subscriptions for shares.japanlaw. http://www.) or 173-2 (Investigation of procedure for incorporation) has been completed. Tokyo. the registeration of the company must be made within two weeks of the date of when a constituent general meeting has been completed or if applicable when the procedure mentioned in Art 173 (Investigation by inspector. officers shall be appointed.co. The incorporators must receive payments for the shares. you need the certificate of a bank to certify that the amount of capital is received by a particular account for KK.Relevant Provisions Attachment 3 Yugen Gaisha Law . etc. Attachment 1 Sample Purposes of Incorporation Clause Attachment 2 Commercial Code of Japan . After all the payments have been made. Types of Business Organizations Recognized in Japan II. Finally. Procedure for Setting Up a K. When all these steps are taken.

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