1. CECLの概要
2016年、米国財務会計基準審議会（FASB）は、金融資産（預金、受取手形、売掛金、貸付金、等）の減損の認識に関連して、（予想損失モデル（Current Expected Credit Loss – CECL）に関する新しい基準（ASU 2016-13）を公表しました（FASBから正式に米国会計基準についての改訂等があった場合には、Accounting Standard Update (“ASU”)という形で公表されます）。
(more…)When incorporating a subsidiary in Japan, one of the crucial decisions to make is choosing the appropriate business entity type. Unlimited partnerships (Gomei-Kaisha) and limited partnerships (Goshi-Kaisha) are granted corporate status under the Companies Act too, but the two most common options are Kabushiki Kaisha (K.K.) and Godo Kaisha (G.K.). Each entity type has its own characteristics, advantages, and requirements. In this article, we will explore the key differences between a K.K. and G.K. to help you make an informed decision.
The primary difference between a K.K. and G.K. lies in their ownership structure:
– Kabushiki Kaisha (K.K.): A K.K. is equivalent to a joint-stock corporation. It is characterized by the issuance of shares to its shareholders, who own the company based on the percentage of their shareholding. The ownership can be easily transferred through the buying and selling of shares. K.K.s must have a board of directors responsible for decision-making and executing company affairs. They are required to appoint at least one director. The representative director, usually the president, represents the company in all legal matters. A shareholder and director can be the same person.
– Godo Kaisha (G.K.): A G.K. is similar to a limited liability company. It is characterized by its membership structure, where members hold membership interests in the company. The founders can determine the initial capital based on their business needs and investment plans. G.K.s are often favored by small and medium-sized enterprises due to their flexibility in capitalization.
The tax implications and incorporation process for both K.K.s and G.K.s are similar, but K.K.s have stricter requirements under the Companies Act as per the following comparison table:
| Kabushiki Kaisha (K.K.) | Godo Kaisha (G.K.) | |
| Articles of Incorporation | Notarization required | Preparation required No notarization requirement |
| Minutes | Preparation required No submission requirement | No creation requirement |
| Executive | Representative Director Director(s) （Both can be the same person） | Member(s) |
| Position required to be registered | Representative Director Director(s) （Both can be the same person） | Member(s) |
| Positions that can be registered | Auditor | Representative Member Executive Partner Executive Member |
| Disclosure of Financial Results | Mandatory | Optional |
| Founder(s) | Shareholder(s) | Members(s) |
| Dividend | According to investment ratio | Ratio can be set in Articles of Incorporation |
-In a non-publicly traded K.K., the term of office for directors is until the conclusion of the of the ordinary general meeting of shareholders relating to the last fiscal year ending within 2 years after their appointment (Article 332, Paragraph 1 of the Company Act). However, this term may be shortened or extended up to ten years by stipulation in the articles of incorporation or by resolution of the general meeting of shareholders. The term of office for auditors is typically four years and can only be extended up to ten years, with no option for shortening (Article 336, Paragraph 1 of the Company Law).
-For a G.K., there is no specified term of office, but it can be determined in the articles of incorporation.
In Tokyo, the ratio of newly established corporations in 2021 was approximately 6:4 in favor of K.K.s over G.K.s. However, the ratio may vary depending on the region. Please note that K.K.s typically enjoy a better social credibility than a G.K.
Click here to read our blog article on Japan Market Entry and Incorporation Strategies.
Disclaimer: All views expressed in this article are solely for informational purposes and should not be construed as legal advice. This information is for reference only and is bound to change in case of any amendments or changes to applicable laws. We do not assume any responsibility or liability for any errors or omissions in the content of this article, and do not make any warranties about the completeness, reliability and accuracy of the information expressed in this article.
【１】Items to be reconfirmed before the New Invoicing System starts
Please review the following items to be confirmed if they are being addressed.
※１．The Components needed for a “Qualified Invoice”
※２．System’s capability for handling fractional amounts
３．Communication of the registered number to your business partners
４．Confirmation of registration status/registration number of business partners
５．Price negotiation between Taxpaying entity and Non-Taxpaying entity
（Antitrust law compliance required）
※６．Applicable transactions before and after October 1, 2023
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