Joint-Stock Company (“kabushiki kaisha”) Incorporation
1. Overview
The joint-stock company is one type of corporate entity which can be incorporated under the Companies Act of Japan.
Through the incorporation of a joint-stock company, the investors become shareholders of the new company and each shareholder assumes limited liability up to the amount which they have invested. Shareholders acquire the right to vote at company shareholder meetings and receive dividends from company earnings in proportion to the amount which they invest.
A joint-stock company differs from the branch of a foreign company in that it is a completely independent entity and all credits and liabilities belong directly to the company. The joint-stock company has a much longer history than godo kaishas and other types of corporate entities and therefore is by far the most common and well-known type of business entity in Japan.
2. Joint-Stock Company Incorporation Procedures
The process of incorporation can be broadly separated into (i) drafting of the Articles of Incorporation, (ii) notarization of the Articles of Incorporation, (iii) investment of paid-in capital and (iv) incorporation registration. The following briefly summarizes the steps required to incorporate a joint-stock company. To manage expectations, it is generally advised to expect the process to take approximately six to eight weeks from commencement to the completion of registration.
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1. Decide on details of joint-stock company
The investor (promoter) decides on the basic matters of the company such as its trade name, head office location, business purposes, officers and amount of capital. -
2. Draft the Articles of Incorporation
After the details of the company have been decided, Articles of Incorporation which specify the trade name, head office location, business purposes and other rules of the company are created. -
3. Notarization of the Articles of Incorporation
In the case of a joint-stock company, the Articles of Incorporation must be notarized by a Japanese Notary Public. -
4. Payment of capital contribution
Once the Articles of Incorporation have been notarized, the investor (promoter) must deposit the initial capital amount into a bank account at a financial institution in Japan. -
5. Incorporation registration
Register the company incorporation with the Legal Affairs Bureau. -
6. Commence business activities
Business activities may be commenced from the date of registration. Once the registration has been completed, company bank accounts may be opened and various notifications to the tax and social insurance agencies may be submitted.
3. Necessary Documents
Generally speaking, the following documents are required for joint-stock company incorporation.
This document sets forth the basic rules with respect to the company to be incorporated. The Articles of Incorporation must be notarized by a Japanese Notary Public.
As part of the process for the notarization of the Articles of Incorporation, the registered seal certificate of the promoter must be submitted to the Notary Public. For foreign nationals who have not registered a personal seal with their local government office, a Signature Certificate may be used as an alternative. The Signature Certificate must be notarized by a Notary Public or consular office.
This refers to documentation that demonstrates that the capital amount has been paid-in. A copy of the bankbook of the account to which the capital was paid to is submitted as part of the incorporation registration for this purpose.
All initial officers of the company must provide an Acceptance of Office letter with a seal attached. In the case of foreign company officers who do not have a seal, a signature is accepted as an alternative.
The registered personal seal certificate of each director is required. For foreign nationals who have not registered a personal seal with their local government office, a Signature Certificate may be used as an alternative. The Signature Certificate must be notarized by a Notary Public or consular office.
In Japan it is customary to use seals rather than a signature on official documents. Therefore, an imprint of the seal of the representative director must be registered with the Legal Affairs Bureau of Japan. We are able to order the necessary seals for our clients. Note that the cost of seals can vary considerably depending on the material used to make the seal.
When the promoter is a corporation, at the time of notarization of the Articles of Incorporation, a Certificate of Registered Matters (of the promoter) must be submitted to the Notary Public. In the case of foreign (non-domestic) corporations where a Certificate of Registered Matters is not obtainable, an Affidavit containing the necessary details is prepared and notarized by a Notary Public or consular office.