Godo Kaisha Incorporation

1.Godo Kaisha Incorporation Overview

The Godo Kaisha is a new type of corporate entity introduced with the enactment of the Companies Act in 2006, that places emphasis on the personal relationship between company members, and is characterized by giving the company considerable flexibility with respect to methods of decision making with respect to operations, distribution of profits and other internal matters.

While the investors in a Stock Company are referred to as “Shareholders”, the investors in a Godo Kaisha are known as “Members,” and in principle each Member in addition to executing operations, possesses company representative rights. (It is possible to designate executional powers and representative rights to specific Members.)

Members of a Godo Kaisha have limited liability, similar to the shareholders of a Stock Company, and each Member's liability to the company is limited to the amount which they have invested.

The Godo Kaisha is characterized by relatively simple setup and operations as compared to a Stock Company, and startup costs are not as much as that needed to incorporate a Stock Company.

2.Godo Kaisha Incorporation Procedures

When incorporating a Godo Kaisha, matters such as the company name, business purposes etc of the company must be decided, and Articles of Incorporation of the company are drafted by the Members. The godo kaisha may be incorporated by just one Member, however, a minimum of one of the Representative Members must be a resident of Japan.

While the Articles of Incorporation of a Stock Company must be notarized by a Notary Public before having legal effect, the Articles of Incorporation of a Godo Kaisha do not require Notary Public notarization.

Once the Articles of Incorporation have been drafted, each Member must make their appropriate capital investments, and an incorporation application is submitted to the Legal Affairs Bureau with various supporting documentation verifying that the incorporation procedures have been followed. All documents attached to the application must be written in Japanese.

The following chart briefly summarizes the steps required to incorporate a Godo Kaisha.

Please expect the process to take approximately one to two months from commencement to the completion of registration.

1. Decide on details of Godo Kaisha
Decide the basic matters of the company such as the Trade Name, Head Office Location and Business Purpose.
↓
2. Drafting the Articles of Incorporation
Create the Articles of Incorporation of the Godo Kaisha. In addition to Trade Name, Business Purposes, name, address and investment particulars of each Member, Members have flexibility in specifying rules for execution of operations and distribution of profits in the Articles of Incorporation.
↓
3. Payment of capital contribution
After the Articles of Incorporation have been created, each Member must make their investment. The investments of the Members are managed by the Representative Member, and temporarily placed into his/her bank account.
↓
4. Incorporation registration application
Make an application for incorporation registration with supporting documentation verifying that all incorporation procedures have been completed. Please click here for a list of documents needed for registration.
↓
5. 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 authorities may be submitted.

3.Necessary Documents

Generally speaking, the following documents are required for Godo Kaisha incorporation.

1. Articles of Incorporation

Articles of Incorporation are drafted, signed or sealed by all Members.

2. Proof of Paid-In Capital

This document demonstrates that each Member has made his/her capital investment.
A copy of the bankbook of the account of the Representative Member is submitted as part of the incorporation registration for this purpose.

3. Company Seal

In Japan it is customary to use seals rather than a signature on official documents. Therefore, an imprint of the seal of the Representative Member will need to be registered with the Legal Affairs Bureau of Japan. To do this, a seal is required. We can order the necessary seals for our clients. The cost of seals can vary considerably depending on the material used to make the seal.

4. Registered Seal Certificate (Signature Certificate)

The registered personal seal certificate of the Representative Member is required to register the company seal with the Legal Affairs Bureau. 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. We can provide a Signature Certificate template as a part of our services.

4. For cases when a non-domestic corporation is a Member

When a non-domestic corporation is to become either an Executive Member or Representative Member, the following procedures are also required.

1. Election of an Operation Manager

The Operation Manager can be thought of as the individual belonging to the non-domestic corporation, charged with being responsible for the Godo Kaisha, for cases where a corporation is the Representative Member (or Executive Member) of the Godo Kaisha.

The selection of an Operation Manager is required since when the Representative Member or Executive Member of the Godo Kaisha is a corporation, it may be unclear as to where actual responsibility for the Godo Kaisha lies.

2. Affidavit summarizing the corporation

When the Representative Member (or Executive Member) is a corporation, and Affidavit summarzing details of the corporation (including the trade name, location of head office, business purposes, capital, shares, officers) must be submitted to the Legal Affairs Bureau. The Affidavit must be notarized by a Notary Public or consular office in the home country of the corporation.

First time consultation is free either in person or by telephone appointment. Consultation provided in English.