[ESTABLISHING A BUSINESS ENTITY IN JAPAN]
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invested in the GK) themselves manage the company. Additionally, a GK, in its Articles of Incorporation, may designate the specific member(s) who execute the business of the GK, and if there are two or more members who execute the business of the GK, the business of the company is determined by a majority of the members who execute the business (unless otherwise provided for in the Articles of Incorporation) (Art. 591). In cases where corporations (i.e., non- natural persons) act as members who execute the business, such corporations must appoint natural person(s) to perform the duties of members who execute such business and notify other members of the names and addresses of such natural person (Art. 598). A member who executes the business of the GK, in principle, has the authority to represent the GK. Provided, however, that a GK may also appoint specific members to represent the GK from among the members who execute the business (Art. 599). As shown above, in a GK, when making decisions, formal meetings such as a shareholders’ meeting or a Board of Directors meeting are not required to be held; thus, a GK can be said to be an entity in which quick decisions can be made.
for any specific
regulations governance
concerning
the
systems for a branch.
4.2
Requirements
for
local
shareholding/directors 4.2.1 Local shareholding
In Japan, in principle, there are no restrictions on the nationality or citizenship of shareholders of a joint- stock company or of members of a limited liability company. As such, in principle, a company with 100% foreign shareholding or membership is permissible. Please note, however, that some industries are subject to restrictions (e.g., defense-related industries; see also Section 5.1 below).
4.2.2 Local directorship
A natural person of any nationality or citizenship can be a director of a joint- stock company (“KK”). In the case of a limited liability company (“GK”), aside from a natural person, a corporation (incorporated in any jurisdiction, in principle) can be a member of the GK. As we mentioned in Section 2.2 above, since 2015, a representative director of a KK or a representative member of a GK is no longer required to be a resident of Japan. In contrast, in the case of a branch, at least one of the representatives in Japan is still required to be a resident of Japan.
4.1.3 Branch
A branch is not an independent legal entity; as such, the Companies Act does not provide
ILN Corporate Group – Establishing a Business Entity Series
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