Tobita & Partners provides high quality legal advice and assistance to Japanese, foreign and foreign-based corporations and individuals.

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Kinds of companies in Japan

When you conduct business in Japan, you might hear the names of various kinds of companies such as "Kabushiki-Kaisha," "Gomei-Kaisha," "Goushi-Kaisha" or "Goudou-Kaisha".
However, the "Kabushiki-Kaisha" is the most relevant kind of company in Japan.

The number of incorporations in each type of company during 2012 is indicated in the following table:

Total

91,942

Kabushiki-Kaisha

80,862

Gomei-Kaisha

60

Goushi-Kaisha

131

Goudou-Kaisha

10,889


As you can realize from this table, "Kabushiki-Kaisha" demonstrates an overwhelming majority among Japanese companies.

There is also a type of company called “Yūgen-Kaisha” (which means limited company), but it is no longer permitted to incorporate in Japan. Only pre-existing “Yūgen-Kaishas” are allowed to continue their operations under special rules. As a result, these companies will not be covered in this article.

What is the difference between "Kabushiki-Kaisha" and the other companies?

Members of "Kabushiki-Kaisha" are called “Kabunushi” (which means share holders). The "Kabunushi" are not involved in the management of the company, but only have shares representing an equal stake in the capital of the company. As a result, they are not operators but rather owners of the company.
Moreover, they can receive a certain part of the profits made by the company according to the number of shares they have.

On the other hand, "Gomei-Kaisha," "Goushi-Kaisha" and "Goudou-Kaisha" are classified as “Mochibun-Kaisha” (which means membership company similar to partnerships). Members of “Mochibun-Kaisha” do not have shares but "Mochibun" (which means equity interests); they are not only owners, but also operators of the company.

Gomei-Kaisha:
This type is an unlimited liability company so all members are liable for any liability incurred by the business operation. 

Goushi-Kaisha:
This type is similar to a limited partnership. Members are divided into two categories: ①partners who have unlimited liability and ②partners who have limited liability only up to the amount they have invested to the company. 

Goudou-Kaisha:
This type is similar to a limited liability company. All members have limited liability only up to the amount they have invested to the company.

In any case, it's no exaggeration to say that when we say “company” it generally means only the "Kabushiki-Kaisha" currently in Japan.

We can help you to incorporate any type of the company that you would like. 
Please feel free to contact us for any inquiries.  

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We prefer “Lawsuits” to “Arbitration” in Japan.

It is popular to have clauses of arbitration in international transaction contracts.
When disputes arise, the “Japan Commercial Arbitration Association”, “ICC Japan”, ”ADR Center of JFBA” and so on have arbitrated in order to settle disputes in Japan as well.
However, the number of the cases resolved by arbitration are quite few.
In contrast, there are many cases resolved by lawsuits. 

The following statistical table shows how little arbitration is used.

The number of the civil cases that were presented to the district court during 2012 in Japan

663,954

The number of the cases that were resolved by  arbitration in  ADR Center of JFBA during 2012 in Japan

6

The number of the cases that were presented to the JCAA during 2012 in Japan

15


In Japan, we use lawsuits much more than arbitration to settle disputes.

Are you concerned about the quality of courts in Japan?
From my 17 years exprience as a lawyer, Japanese judges are somewhat bureaucratic, but most of them are excellent (it is true).  In most cases, they can determine fairly and appropriately.
Therefore, we certainly recommend using court procedures to resolve disputes. 

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Prenuptial Agreement
 
Prenuptial Agreement is a contract signed by two people before they marry in order to define conditions on their property, lifestyle and so on after they get married.
This kind of contract is popular in the US; meanwhile, our initial thought was that it does not necessarily fit in the Japanese society.
However, these days, a Prenuptial Agreement has been signed by not only international married couples but also Japanese couples.

What is the "Prenuptial Agreement"?

(1) "Memorandum"
This is an agreement to be freely drafted by a couple, and it is then concluded by signatures and sealed. So, it is easy and flexible to create it.
However, it will not have the strong legal effect.

(2) "Contract"
This is a legally binding contract such as a bought and sold note or lease contract.
You can enhance the legal effect of the contract further by drafting it based on a lawyer's advice or entrusting lawyer to the drafting.

(3) "Notarized Deed"
This is a public document that is notarized by a notary officer. You should follow the specified procedure and pay fees.
Although the content of the document is the same as the Contract (as mentioned (2) above), if you have your contract notarized, the legal effect may become enhanced.

(4) "Contract on Property of Husband and Wife"
This is a contract defined in the Article 755 of the Civil Code.
This is an agreement only to define the provisions on the property, and you can sign it only before your marriage.
The articles in this Contract may be asserted against a third party after such articles are registered. 
After you have your contract registered, you cannot change the articles.

In addition, we have the regulation in the Civil Code as follows:
In Article 754, either a husband or wife may at any time during the marriage rescind the contract; provided, however, this will not harm the rights of a third party.
Therefore, if a couple signs this contract after they get married, either a husband or wife may rescind it in principle.
Therefore, please be careful.

As stated above, if you sign your own Prenuptial Agreement in accordance with each individual situation, your desired lifestyle might be esteemed legally also.
In Japan, as we have tenaciously considered the supposition of divorce before a marriage as a taboo, the Prenuptial Agreement has not been popular yet.
However, the more diversified styles among couples and marriages are approved socially, the more popular Prenuptial Agreements become.

We can help you draft your Prenuptial Agreement.
The expert lawyers can give you advice or make articles in accordance with your view of marriage and desired lifestyle.
Please feel free to contact us for any inquiries. 

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