KK vs. GK: Choosing a Corporate Entity
Choosing KK vs GK in Japan is the first structural decision a founder makes before filing at the Legal Affairs Bureau. The 株式会社 (kabushiki kaisha, "joint-stock corporation"), or KK, is the traditional default with shareholders, a yearly meeting, and public financial disclosure. The 合同会社 (gōdō kaisha, "limited liability company"), or GK, is the simpler modern alternative: member-managed, with no public disclosure and lower setup cost.12
Procedures, fees, and requirements can change. Confirm current details at the Legal Affairs Bureau or in JETRO's business-establishment guidance. This article is general information, not legal or tax advice; for your specific case, consult a licensed shihō-shoshi (司法書士, "judicial scrivener") on entity choice and filings, or a zeirishi (税理士, "tax accountant") on the tax consequences.
Overview
This article compares the two subsidiary forms a founder actually chooses between: the KK and the GK. Both give owners limited liability, and both can be started with 1 JPY in capital and a single founder.12
The Companies Act also provides for unlimited-liability forms, the Gomei-Kaisha and Goshi-Kaisha, but these are rarely chosen in practice because participants bear unlimited rather than limited liability.1 This article does not cover branch offices or representative offices, which are extensions of a foreign parent rather than Japanese subsidiaries.1
Entity rules are national law and identical nationwide. They apply the same way to Japanese and foreign founders, and nothing in this article varies by ward, city, or nationality.12
The KK: Japan's Joint-Stock Default
The KK is the company form most Japanese counterparties picture when they hear "corporation." Owners hold shares, and the form is built to scale from a one-person startup to a listed company.
Structure and ownership
A KK can be established by one or more shareholders with capital of 1 JPY or more.2 Ownership is divided into shares, and shares may be transferred freely in principle. The articles of incorporation may instead require board-of-directors approval for transfers, which is how small KKs stay closed.2
Only a KK can make a public offering of stock.2 Profits and losses are allocated according to each shareholder's equity ratio.2
Governance and disclosure
A small closed KK, meaning one with share-transfer restrictions, capital under 500 million JPY, and liabilities under 20 billion JPY, needs only one or more directors, with a representative director holding execution rights. A board of directors is optional at this size.2
Director terms run from 1 to 10 years and may be extended up to 10.2 A KK must in principle hold a regular general meeting of shareholders every year.2
A KK must publicly disclose its annual financial statements after the yearly meeting (Companies Act Article 440, the balance-sheet public notice). This disclosure duty is one of the sharpest structural contrasts with the GK, which JETRO describes as having no duty to publish financial results.1
Establishing a KK includes a notarization step: the articles of incorporation must be authenticated by a Japanese notary before the registration application is filed.3 This step, and its fee, has no counterpart in the GK flow.
The mandatory contents of KK articles are fixed: purpose, trade name, place of the principal office, the value or minimum amount of assets contributed at incorporation, and each promoter's name and address.4
Terminology
- 定款 (teikan, "articles of incorporation"): the charter document both entity types file, but only the KK must have notarized.34
The GK: Japan's LLC Alternative
The GK works like an American LLC. It gives the same limited liability as a KK with simpler governance, and it has become a common vehicle for owner-operated businesses and foreign-owned subsidiaries.
Structure and ownership
A GK can be established by one or more members with capital of 1 JPY or more.2 Members hold equity interests rather than shares. Liability is limited to contributed assets, exactly as in a KK.12
Transferring a GK equity interest requires unanimous approval of the members.2 A GK may not make a public offering of equity.2 Profit and loss distribution may depart from the equity ratio if the articles of association say so, which allows sweat-equity style splits a KK cannot do.2
A GK may later be reorganized into a joint-stock corporation, and a KK may likewise be reorganized into a GK.2
Governance and no public disclosure
A GK has no legally stipulated minimum number of executives. In principle all members execute the business, but the articles may provide otherwise, for example by appointing managing members while the rest stay passive.12 Executives serve no legally fixed term, and no regular general meeting of members is required.2
The GK enjoys wider freedom of self-government through its articles than a KK does. It may set its own procedures for preparing and approving financial statements in its articles, no statute dictates how annual statements are finalized, and it does not have to publish its financial results.1
The GK establishment flow runs from preparing the articles straight to the registration application at the Legal Affairs Bureau, with no notarization step at all.3 The mandatory contents of GK articles are purpose, trade name, principal office, each member's name and address, a statement that all members are limited-liability members, and the purpose and value (or valuation standard) of members' contributions.4
Terminology
- 社員 (shain, in company law, "member"): a GK equity participant, not an employee.2
- 持分 (mochibun, "equity interest"): what a GK member holds instead of shares.2
KK vs. GK Side by Side
The table below compresses the structural comparison. Every row reflects Companies Act rules as summarized by JETRO, not practitioner opinion.12
| Dimension | KK | GK |
|---|---|---|
| Minimum capital | 1 JPY | 1 JPY |
| Founders required | 1 or more | 1 or more |
| Owner liability | Limited to contribution | Limited to contribution |
| Transfer of interest | Free in principle; board approval if articles require | Unanimous member consent required |
| Public offering of equity | Possible | Not possible |
| Annual owners meeting | Required in principle | Not required |
| Executive minimum | 1 or more directors (small closed KK) | None; all members act by default |
| Financial disclosure | Public disclosure required | No publication required |
| Articles notarization | Required (Japanese notary) | Not required |
| Profit allocation | By equity ratio | Flexible if articles say so |
| Later conversion | Reorganizable into a GK | Reorganizable into a KK |
Incorporation Costs and Timeline
JETRO's Tokyo model case for a foreign firm establishing a KK subsidiary through professionals puts registration costs at 1,570 USD, which converts to about 250,000 JPY (as of 2026-09; confirm current figures with the Legal Affairs Bureau).5 That bundle covers the registration and license tax, stamp duty on the articles, the notarization fee, and related items.5
| Item | Amount | As of | Notes |
|---|---|---|---|
| KK registration costs (tax, stamp, notarization, related) | About 250,000 JPY (1,570 USD at 159.19 JPY) | 2026-095 | Model case via professionals |
| KK professional filing fees via proxy | About 300,000 JPY (1,885 USD at 159.19 JPY) | 2026-095 | Separate from registration costs |
| GK total incorporation cost (practitioner typical) | About 100,000 JPY | 2026-09 | No notarization step; figure per practitioner consensus, not yet confirmed against a Legal Affairs Bureau fee table |
The GK total above is roughly 100,000 JPY (as of 2026-09). It runs lower for two structural reasons: the GK flow skips the notary step entirely, and its registration-tax floor is lower.3
Practitioner sources commonly break the tax component out as 150,000 JPY or 0.7 percent of capital (whichever is higher) for a KK and 60,000 JPY or 0.7 percent of capital for a GK (as of 2026-09 for both figures). These per-item floors could not be confirmed against a fetched Legal Affairs Bureau fee table in this pass, so treat the bundled totals above as the firmer numbers.
A subsidiary comes into existence on the date its registration application reaches the Legal Affairs Bureau, and it may operate from that date.3 Since March 2015, neither a KK representative director nor a GK representative member needs a Japan address, so a non-resident founder can hold either role.2
Terminology
- 登録免許税 (tōroku menkyozei, "registration and license tax"): the tax paid on the incorporation registration itself.5
- 定款認証 (teikan ninshō, "articles notarization"): the notary authentication step only KKs need.3
- 司法書士 (shihō shoshi, "judicial scrivener"): the licensed professional who typically handles incorporation filings.
- 税理士 (zeirishi, "tax accountant"): the licensed professional for corporate tax questions.
Which Entity Fits Your Situation
The decision turns on two questions: will outsiders put money in, and does counterparty prestige matter more than cost. The flowchart below maps the choice, and each branch is explained in its section.
Choose a KK when external capital or prestige matters
Only a KK can issue and publicly offer stock, so any plan involving outside equity investors or a future listing points to a KK.2 Practitioner sources also describe the KK as the traditional default that carries stronger credibility with Japanese counterparties such as banks, landlords, and enterprise clients, with GK acceptance growing but not yet equal. That perception gap is market consensus rather than law, so weigh it as one input, not a rule.
Choose a GK when you run it yourself and cost matters
An owner-operated business with no outside investors gets limited liability, simpler governance, and lower setup cost from a GK.12 Frequently cited examples of foreign-multinational Japanese subsidiaries operating as GKs include Google Japan and Apple Japan, though these examples come from practitioner commentary rather than a registry check in this pass. The pattern they illustrate is real either way: a wholly owned subsidiary with one decision-maker gains little from KK machinery.
Because every GK equity transfer needs unanimous member consent, a two-founder GK gives each founder veto power over the other's exit.2 Founder teams that want clean buy-sell mechanics should settle transfer terms in the articles before registering, with a shihō-shoshi reviewing the clause.
Good to know
A GK cannot issue stock, so a later funding round usually means converting
A GK that later needs venture money cannot simply sell shares the way a KK can, since no public offering of GK equity is possible.2 The Companies Act does allow reorganizing a GK into a KK, so the early GK choice is reversible, but the conversion is itself a legal procedure with its own cost.2
Unanimous consent makes GK exits sticky
Unlike KK shares, which transfer freely in principle, every GK equity transfer needs all members to agree.2 Solo founders never feel this rule. Multi-member GKs should draft buyout and exit terms into the articles at formation rather than negotiating them during a dispute.
The notary step is a KK-only cost
KK founders pay for articles notarization as part of the roughly 250,000 JPY registration bundle, while GK founders skip the step entirely (as of 2026-09).35 This single procedural difference explains a large share of the cost gap between the two entities.
Your entity choice does not grant you a visa
Incorporating either entity does not by itself qualify a foreign founder for residence. Business Manager status carries its own bar, including a capital figure of 30M JPY or more (as of 2026-09), far above the 1 JPY company-law minimum.2 Handle entity choice and immigration status as two separate tracks, and take visa-specific advice before assuming the company unlocks residence.
See also
- Registering as a Sole Proprietor (Kojin Jigyounushi)
- Can You Freelance on Your Visa?
- The Incorporation Process
- Business Manager Visa Requirements for Founders
- Notary Public (Koshonin) in Japan
- Hiring Your First Employee