The KK is the default vehicle for doing business in Japan. Shareholders' liability is limited to what they invested, ownership is in shares, and the governance is set out in detail in the Companies Act: a shareholders' meeting, one or more directors, and, depending on size and whether the company has a board, statutory auditors or committees. "Kabushiki kaisha" appears in the company name, before or after it.
Setting one up means drafting articles, having them notarised, paying in capital and registering with the Legal Affairs Bureau. The minimum capital requirement was abolished in 2006, and since March 2015 a KK no longer needs a representative director living in Japan. In 2025, 100,558 new KKs were incorporated, still the most common form, though the share of new companies choosing a godo kaisha has been rising.
Running a KK carries fixed obligations: an annual shareholders' meeting, registration of every change of director within two weeks, and a public notice of the balance sheet each year. A company with capital of 500 million yen or more, or liabilities of 20 billion yen or more, is a "large company" and must appoint an external accounting auditor.
What it means for a foreign employer
- It is the form Japanese candidates trust. A KK is what a listed Japanese company is, so senior candidates read it as permanent. A small entity that is a KK gives them some reassurance about your commitment.
- It is the only form that offers board titles. If a country manager or a senior hire expects to be a torishimariyaku or daihyo torishimariyaku, the entity has to be a KK. That matters in negotiation and on a business card.
- Directors carry liability and registration. Every director appointed to the subsidiary is named in the public register. Agree who sits on the board, and on what terms, before the offer is made.
- Watch the large-company threshold. Capitalising a subsidiary generously, or loading it with intra-group debt, can trigger the external auditor requirement and its cost.
Sources
- Companies Act, Articles 26, 30, 328, 440, 911 and 915.
- Registration and Licence Tax Act, Schedule 1 (company incorporation: 0.7% of capital, minimum 150,000 yen).
- Ministry of Justice, notice on representative directors resident abroad (March 2015).
- Tokyo Shoko Research, new incorporations in 2025 (2026).