Godo Kaisha (Limited Liability Company)
Low Cost Alternative
Godo Kaisha (GK) is translated into Limited Liability Company (LLC). Its setup procedures are simpler than Kabushiki Kaisha (KK)'s. (ex. GK does not need to have its Articles of Incorporation notarized by the notary public.) Thus, the cost of formation is less expensive than KK. In tax point of view, GK is the same as KK. Unlike the LLC in the U.S., the Japanese LLC cannot choose pass-through tax treatment.
Following is the flow of procedures to set up Godo Kaisha.
Main difference of Limited Liability Company (GK) compared with Kabushiki Kaisha (KK)
- More flexibility in the Articles of Incorporation. GK has no obligation to publicize its B/S, and the term of office of directors can be indefinite, while that of KK should be within 10 years.
- There is no need to hold an annual meeting to approve the financial statements.
- Directors of GK should be partners (=pay contributions to become a director). On the other hand, directors of KK is not limited to its shareholders.
Basic points are similar to KK. Also check notations on KK.