[ESTABLISHING A BUSINESS ENTITY IN JAPAN]
284
Large companies
Non-large companies
Public
Non-public
Public
Non-public companies
companies
companies
companies
Optional (with some exceptions)
Optional (with some exceptions)
Board of Directors*
Mandatory
Mandatory
*consisting of 3 or more directors
Number of Directors
3 or more
1 or more
3 or more
1 or more
Representative Director
Mandatory
Optional
Mandatory
Optional
Statutory Auditor
3 or more
1 or more
1 or more
Optional (with some
exceptions)
Board of Auditors*
Mandatory
Optional
Optional
Optional
*consisting of 3 or more Statutory Auditors
Accounting Auditor
Mandatory
Mandatory
Optional
Optional
Mandatory, if the company has a Board of Directors but has no
Accounting Advisor
Optional
Optional
Optional
Statutory Auditor
*In addition to the above structures, a ‘company with a committee system’ is also available, but here we focus on the traditional organizational structures.
As indicated in the above table, if a joint-stock company (“KK”) has JPY 500 million or more capital (i.e., a “large” company), and its shares are freely transferable (without the company’s approval, i.e., a “public” company), then the KK must have a Board of Directors consisting of 3 or more Directors and must appoint 3 or more Statutory Auditors who constitute a Board of Auditors. In contrast, in the case of a non-large and non-public KK, it is permissible to appoint just one Director (a Board of Directors is not mandatory, and a Statutory Auditor is not mandatory, either). An Accounting Advisor is either a Certified Public Accountant or audit firm, or a certified public tax accountant or tax accountant corporation (Art. 333, Companies Act), whereas
a Statutory Auditor need not be any such certified professional. In the case of an Accounting Auditor (which is mandatory for “large” companies), it is either a public certified accountant or audit firm (Art. 337). 4.1.2 Limited Liability Company (“GK”) The members of a limited liability company (“GK”) themselves
execute the business of the GK, unless otherwise provided for in the Articles of Incorporation (Art. 590, Companies Act). As mentioned above, unlike a KK (where the management of the company is entrusted to the Directors), in the case of a GK, the members (i.e., the owners who
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator