Business
Companies Act forms plus a 2015 stewardship-driven governance shift
The Companies Act 2005 consolidated company law into a single statute. Most foreign investors use the kabushiki kaisha (KK) or the simpler godo kaisha (GK); the Corporate Governance Code, introduced in 2015 and revised since, drives board independence on a comply-or-explain basis.
Key rules
- Jurisdiction — Registration is handled by the Legal Affairs Bureau for the company's district. Listed-company governance rules come from the Tokyo Stock Exchange, not from the Companies Act.
Governing law
- Companies ActAct No. 86 of 2005
- Financial Instruments and Exchange Act
- Foreign Exchange and Foreign Trade ActFEFTA
In practice
A KK has share capital, a director structure and public filing obligations; a GK is member-managed, cheaper to run and often chosen for wholly owned subsidiaries, though it cannot list. There is no statutory minimum capital, but a company needs at least one director resident or otherwise able to act in Japan in practice. FEFTA requires prior notification for inward investment into designated sensitive sectors, and the 2019 amendments lowered the notification threshold to 1 percent for the most sensitive industries. Governance obligations bite hardest on listed issuers: the TSE Prime segment expects a third of the board to be independent.