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Kabushiki-gaisha (abbreviation: KK ; Jap. 株式会社 , historical Japanese pronunciation: Kabushiki Kaisha ; literally Aktiengesellschaft ) is a type of corporations in Japanese law .

Use of language

The pronunciation kabushiki kai sha is now a subsidiary form of the standard Japanese pronunciation kabushiki gai sha . The linguistic explanation of why there are these two forms is as follows: In Japanese, the unvoiced initial sound of the second part of the word becomes voiced when the compound is perceived as a unit (see Rendaku ). This was not the case when the word was coined during the modernization of Japan in the Meiji period , and Kabushiki Kaisha is therefore abbreviated in Latin letters "KK". The written form with K is still used today by some companies and is widely used in English-language legal literature.

In Japanese, kabushiki gaisha can be prefixed or appended e.g. B. 株式会社 電 通 , Kabushiki Gaisha Dentsū or ト ヨ タ 自動 車 株式会社 , Toyota Jidōsha Kabushiki Gaisha . It is often abbreviated with the first character in brackets (株) .

Many Japanese companies translate the phrase kabushiki kaisha as Company, Limited (Co., Ltd.) based on the British term Limited , while others use Americanized translations such as Corporation (Corp.) or Incorporated (Inc.). Other large corporation translations into English include Company (Co.), Kaisha, Limited (Kaisha, Ltd.), Limited (Ltd.), or Company Incorporated (Co., Inc.). Some companies leave the legal form untranslated in English. English texts often refer to kabushiki kaisha as joint stock companies . While this comes close to a literal translation of the term, these terms are not identical in content. That is why the Japanese government now uses business corporation as its official English name. The Ministry of Justice uses the kaisha-hō stock company in its English translation .


The first kabushiki kaisha was the Daiichi Kokuritsu Ginkō ( 第一 国立 銀行 , "First National Bank", English First National Bank of Japan ; today part of the Mizuho Ginkō, a full subsidiary of the Mizuho Financial Group ), formed in 1873.

Today's kabushiki kaisha are regulated by the Japanese Commercial Code, whose rules on businesses date back to the occupation and are based on the Illinois Business Corporation Act of 1933. Although the law was changed in the years that followed, the kabushiki kaisha still have some of the characteristics of pre-war American societies.

On June 29, 2005, the Japanese Parliament passed a new law, 会 社 法 , ( kaisha-hō or Corporate Law), which took effect on April 1, 2006. The new law has a major impact on the formation and work of KK and other Japanese business organizations, bringing them closer to their current counterparts in the US.


Under the old law, kabushiki kaisha required seed capital of 10 million yen (about US $ 87,000). While seven shareholders were required in the 1990s, today a KK only needs one, which can be a person or a company. The main difficulty in establishing a KK is explaining its corporate purpose, as Japan has a strict ultra vires doctrine and therefore it is not allowed to set up a KK for "any purpose" as is possible in most of the English-speaking world. Therefore, legal or administrative clerks are often used to draft the corporate purpose for the founding articles of the company.

Before registering with the government, under the old law, a KK had to deposit the paid-in capital into a special blocked account at a bank. The bank issued a certificate of deposit ( 保管 証明書 , hokan shōmeischo ) for the government, and the KK had to pay the registration tax (0.7% of the paid-in capital, but at least 150,000 yen).

The new corporate law eliminated this process, lowering the registration tax and reducing the required share capital to 1 yen. This means that establishing a KK costs 240,000 yen (approximately US $ 2,000) in taxes and registration fees. However, under the new law, only companies with a capital of over 3 million yen are allowed to issue dividends .

The new company law also allows the formation of a KK as a closed company ( 非 公開 株式会社 , hikōkaiii kabushiki kaisha ), in which the "Board of Directors" must approve any transfer of shares between the shareholders. The determination of a closed company must be declared in the articles of incorporation of the company.


Board of Directors

Under the old law, a KK had to have a board of directors ( 取締 役 会 , torishimariyaku-kai ) made up of at least three people. The directors ( 取締 役 , torishimariyaku ) had a term of two years and the auditors four years. The legal head of the company is the executive director ( 代表 取締 役 , daihyō torishimariyaku ), who holds the company's seal . At least one of the directors and the executive director must be Japanese citizens.

According to the new law, these requirements have been relaxed somewhat. Closed KK only need one director who does not have to have a fixed term of office.

Supervision and reporting

Every KK must have at least one auditor ( 監 査 役 , kansayaku ). KK with a capital of more than 500 million yen, liabilities of over 2 billion yen or publicly traded securities must have at least three auditors and carry out an annual audit by an external, certified certified public accountant . Public KK are also subject to reporting to the Ministry of Finance.

Under the new law, public and other non- closed CCs can have either an auditor or an appointing committee ( 指名 委員会 , shimei iinkai ), auditing committee ( 監 査 委員会 , kansa iinkai ) and a compensation committee ( 報酬 委員会 , hōshū iinkai ), a structure similar to that the American public corporations . Closed KKs can combine the functions of director and auditor in one person, regardless of capital and liabilities.

The auditors report to the shareholders and have the authority to request financial and operational reports from the directors.

The directors and auditors are appointed by the general assembly ( 株 主 総 会 , kabunushi-sōkai ).

Senior management positions

Japanese law does not define positions in company management, so the titles and responsibilities of managers can vary widely between companies.

The titles of the directors are usually as follows, in descending nominal order: Chairman ( 会長 , kaichō , English Chairman of the Board ), President ( 社長 , shachō or 頭 取 , tōdori , English President, Representive Director ), Vice-President ( 副社長 , fuku-shachō or 副 頭 取 , fuku-tōdori , English Executive Vice President ), chief executive director ( 専 務 取締 役 , semmu torishimariyaku , English Executive Managing Director ), managing director ( 常務 取締 役 , jōmu torishimariyaku , English Managing Director ) and remaining directors ( torishimariyaku , English Director ). The position of the legal head of the company is usually held by the president, while in this case the chairman is often an honorary position granted to previous presidents.


Kabushiki kaisha , as in most countries, are subject to double taxation of profits and dividends . In contrast to other countries, Japan levies double taxation on closed companies ( yūgen kaisha and gōdō kaisha ). This makes taxation in Japan a marginal problem when it comes to deciding on the right type of company . Since all publicly traded companies follow the KK structure, small businesses often choose the form of a KK to appear more meaningful.

In addition to income tax , the KK has to pay a one-time registration tax to the government and may also be subject to local taxation.


  • Mitsuhiro Hirata: The Japanese Torishimariyaku-kai: A Legal and Business Analysis . In: The Hitotsubashi Academy, Hitotsubashi University (Ed.): Hitotsubashi Journal of Commerce and Management . Vol. 30, No. 1 , December 1995, p. 1-27 ( handle.net ).

Web links

Individual evidence

  1. ^ Ministry of Justice, Japanese Law Translation Database: Companies Act, Article 6
  2. JETRO NEWLETTER ( Memento of February 4, 2006 in the Internet Archive )