Company Establishment

Choosing a Corporate Form: Kabushiki Kaisha vs. Godo Kaisha
While startups primarily choose between a "Kabushiki Kaisha" (joint-stock corporation) and a "Godo Kaisha" (limited liability company), establishing a Kabushiki Kaisha is common in the life sciences field, which requires large-scale external fundraising. On the other hand, if you do not plan to raise funds from VCs in the near future, a Godo Kaisha with its simple organizational structure may be a good option. It is also possible to change the company form from a Godo Kaisha to a Kabushiki Kaisha in the future.

• (Which is better, a Kabushiki Kaisha or a Godo Kaisha?, J-Net21, Organization for Small & Medium Enterprises and Regional Innovation, JAPAN, https://j-net21.smrj.go.jp/startup/manual/list6/6-3-3.html)

​Specific Steps for Establishing a Kabushiki Kaisha
The establishment of a Kabushiki Kaisha proceeds in the following steps. It is also possible to request this process from a professional (such as a judicial scrivener).

• Determine Basic Matters
  • Decide on the trade name (company name), business objectives, head office location, amount of capital, founder(s), number of shares to be issued, and officer structure.
  • Tip: It is a good idea to include potential future business activities in the business objectives. For businesses that require licenses and permits, it is necessary to state objectives that meet those requirements.
• Create and Notarize the Articles of Incorporation (Teikan)
  • Create the Articles of Incorporation, which are the fundamental rules of the company.
  • After creation, have them notarized at a notary office. (The 40,000 JPY revenue stamp fee is not required for electronic Articles of Incorporation).
• Pay in Capital
  • The specified capital is paid into the founder's personal bank account. A copy of the bankbook serves as proof of payment.
• Prepare Registration Documents
  • Prepare the necessary documents to be submitted to the Legal Affairs Bureau, such as the registration application form, acceptance of office letter, and personal identification documents.
• Apply for Company Establishment Registration
  • File the application for registration at the Legal Affairs Bureau that has jurisdiction over the head office location. This application date becomes the company's establishment date.
• Post-Establishment Procedures
  • File the notification of incorporation with the tax office, prefectural tax offices, and pension offices, and complete procedures for social insurance enrollment.
• (Procedures for Establishing a Kabushiki Kaisha, J-Net21, Organization for Small & Medium Enterprises and Regional Innovation, JAPAN, https://j-net21.smrj.go.jp/startup/manual/list6/6-2-1.html)

Utilizing Public Consultation Services
Specialized knowledge in areas such as accounting, human resources, etc. is essential for establishing a company and its subsequent operations. You should consult with experts and public consultation services before starting your business.

• Utilize the industry-academia collaboration departments of academia
  • If you are a researcher in academia, you should start by consulting with the industry-academia collaboration department of your institution. You can receive consistent support not only for starting a business, but also for intellectual property, research support, and business matching. By being certified as a startup originating from academia, you will be able to receive even more substantial support.

• Utilize the Organization for Small & Medium Enterprises and Regional Innovation, JAPAN (SMRJ)
  • If you are not affiliated with academia, it is a good idea to gather information and consult with the SMRJ or the consultation services of local governments.
  • I want to start a business | For those with concerns about starting a business | Organization for Small & Medium Enterprises and Regional Innovation, JAPAN
  • Consultation services for starting a business/entrepreneurship | J-Net21 [SME Business Support Site]

• Utilize support from local governments
  • Each local government also provides generous support for starting a business. For example, the Tokyo Metropolitan Government provides the "Tokyo Sogyo NET," which offers centralized information on starting a business, and publishes a guidebook summarizing support measures. In addition, Tokyo has the Tokyo One-Stop Business Establishment Center, where you can complete the administrative procedures required for establishing a corporation and starting a business (notarization of articles of incorporation, registration, tax, pension/social insurance) in one place.
  • Tokyo Sogyo NET
  • 202011_tokyoshienguide.pdf
  • Tokyo One-Stop Business Establishment Center | Business Support in Tokyo | Invest Tokyo - Office of the Governor for Policy Planning

Tips

• An address for corporate registration is required to establish a corporation, but in the early stages, the number of employees may be small, or a large workforce may not be necessary depending on the business model. The key to establishing a corporation with good cost and time performance is to initially use a so-called virtual office.
• Particularly for startups developing pharmaceuticals or medical devices, it is recommended to establish the corporation within a life science ecosystem. There are co-working spaces within the ecosystem, and related companies and institutions are concentrated there, making business networking much easier. The life science field is highly specialized, and mismatches can occur in various situations within a general startup ecosystem. If it is difficult to establish the corporation within a life science ecosystem, it is a good idea to become a member of one of those ecosystems to gather information separately.

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＠K.Kamitani

life science hub, startup hub