General Edition Sunday, May 21, 2006 Issue No. 375
+++ INDEX
- What's new
- Services lineup
- News
- Candidate roundup
- Upcoming events
- News credits
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| +++ WHAT'S NEW |
On May 1st a major business event happened, but almost by stealth. The
largest rewrite of the commercial code in decades now means that
virtually anyone can create a regular company, not some temporary
hybrid, for just one yen. The new "Sho-ho" (commercial code) is so
extensive that it even does away with a complete class of companies,
the Yugen Kaisha, and replaces it with two brand new
concepts, the limited liability company (LLC) and also
limited liability partnerships (LLP).
In the past, anyone wanting to create a company had to wrestle with
the need for substantial capital to fund the business, a minimum of
JPY3m (US$27,000) for a Yugen Kaisha (a format often favored by mom &
pop stores) and JPY10m
(US$90,000) for a Kabushiki Kaisha (Joint Stock company) -- not any
easy task for the founder of a start-up. Those same founders also had
to find people willing to share the risk, since for joint stock
companies at least, you also had to have 3 directors as well as a
statutory auditor. Since these positions would typically involve some
personal risk, it was especially hard to find suitable people to serve
on the board.
Well, that is all gone now, and now you have both low cost and
flexibility. Basically there are now 4 types of domestic companies
(not including branch and representative offices). These are the: Godo
Kaisha (GK), Joto Seigen Kabushiki Kaisha (JSKK), Kokai Kabushi Kaisha
(KKK), and Yugen Seikinin Jigyo Kumai (YSJK).
The Godo Kaisha is equivalent to a US-style limited
liability company and is the most basic form of incorporation. The
liability is limited to the amount invested. We believe this company
format would be best suited to people who want to keep their business
operation simple and not have to do a lot of reporting or commercial
compliance work. Rather than shareholders in the company,
you have a class of investors called Participants, and any
changes, dividends, rights, etc., have to be applied
equally across all shareholders. So while a GK is easier to
run, in that it doesn't require shareholder meetings nor
elected directors, it also has the downside that you can't
take a GK public and that even a 1% shareholder can dissent
to board-instigated changes and derail them.
The JSK is also called a Closed KK, and appears to be the most
flexible vehicle for start-ups. Founders can raise capital from
outside investors, offering different classes of shares, yet they can
also keep the reporting and compliance work to a minimum. Essentially
JSK's can opt for one or more investors, one or more directors, and if
only one director, then of course no directors meetings or
subsequent reporting are required. Further, no statutory
auditor is required either, because instead you can hire an
outside "zeirishi" (Certified Tax Accountant) to audit the
books.
The Closed KK is called that because the sale of shares is restricted
and requires board approval -- something that most Japanese companies
do anyway. We think the Closed KK will become the new company vehicle
of choice for entrepreneurs.
The KKK is strangely called a "Public" KK in English, even though it
is not listed. In substance, it appears to be the closest company
format to the current Kabushiki Kaisha that we're all familiar with.
The KKK is designed for a strong level of transparency and
responsibility, and as such it will probably be the favored vehicle
for more substantial entities. As with existing KK's, there need to be
3 directors, a statutory auditor, and regular reporting and
compliance requirements.
The YSJK, or LLP, is the second new company type. This is partnership
oriented, and is intended mainly for projects and investor groups.
Income is taxed directly to the partners, and thus provides for
partners to offset losses against other businesses they may be
profiting from, although there are limits on how much this can be
done.
For those readers with a Yugen Kaisha, your company doesn't disappear.
Instead, over time you will be encouraged to re-register the company
as one of the other formats. This is quite cheap and easy to do,
running around JPY240,000 for the registration fees and stamp duty to
convert into a Closed KK, and JPY100,000 to convert into a Godo
Kaisha. Of course, if you like, you can simply continue
running your YK the way you do now without any changes --
and certainly YK's have the advantage of not having to
re-elect the directors every two years.
This short introduction to the new company formats just scratches the
surface of a wide number of changes implemented. For example, so far
we haven't talked about a massive change in takeover and stock swap
rules, dividend payment rules, share classes, financial statement
changes, and much else besides. Rather, we encourage anyone
responsible for corporate compliance to check into these
changes and to educate senior management of their
implications. Elements such as the notorious Article 821,
which renders foreign parent companies liable within Japan
for the conduct of their branch offices, have raised the
hackles of the foreign business community, and are of
particular importance.
However, even though 821 has probably inconvenienced a lot
of foreign firms who now need to incorporate here, at the same time,
our general impression is that the new commercial code makes it easier
for a venture CEO to create a company and properly manage it -- which
has to be a good thing.
Lastly, we would like to point out that our sister company, LINC
Media, now offers bilingual services to incorporate and provide
on-going back office operations for foreign companies setting up a
subsidiary in Japan. An extension of LINC Media's existing incubation
and market-entry consulting -- our new support services are well
priced and are provided by highly experienced staff. If you are
thinking of starting a company, make your first enquiry to
us here at [email protected], and we will forward your
message on to the manager in charge..
...The Information Janitors/
| +++ SERVICES LINE-UP |
Contact [email protected] if you want your company here.
- Advertise with Japan Inc newsletters. JIN and Terrie's Take cost just 2 yen per person to reach 54,000 people. Great for last minute offers and event advertising.
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- Find new bilingual sales staff -- a specialty for DaiJob.com,
[email protected] Ph: 03-3499-3040
BiOS is Recruting Due to continuing expansion of our systems integration and outsourcing
> businesses, BiOS is actively recruiting BILINGUAL engineers and IT
> trainees. Wide range of positions open, with competitive salaries and
> working conditions. Join our team of more than 50 engineers and get
> the BiOS stamp of quality on your resume. |
| +++ NEWS |
-Cheap PCs kill second-hand and kits market
- More than 1m living overseas
- 72% of consumers have credit cards
- DoCoMo cell phone credit cards
- Oil reserves up to 95 days
-> Cheap PCs kill second-hand and kits market
The Nikkei reports that cheap PCs from Dell, NEC, HP and others are
significantly impacting both the second-hand and kitset business of
computer resellers such as Sofmap in Akihabara. Apparently PC prices
have been dropping about 10% a year, and at present some brands such
as eMachines can be had in a fully-spec'd configuration for just
JPY39,800 (US$361). Market researcher BCN reckons that the sales of
RAM and other PC parts has fallen 7.7% in the last 12
months. ***Ed: We've been faithful customers of DOS-Para in
Akihabara for some years now. We hope that they and other
outlets ride this trend through...** (Source: TT commentary
from nikkei.co.jp, May 15, 2006)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20060515DA5J5156.htm
-> More than 1m living overseas
The Foreign Ministry has said that as of October 1st last year,
1,013,230 Japanese nationals were living overseas, 5.4% more people
than a year earlier. This is the first time that the number has topped
one million since records started in 1968. By country, there were
351,668 people living in the USA, 114,899 in China, up by 15.8%, and
65,942 in Brazil. ***Ed: Need we say that with the
exception of China, most of these people are living
overseas for the lifestyle? Falling birthrate and
increasing emigration -- not a pretty picture.** (Source:
TT commentary from mainichi-msn.co.jp, May 15, 2006)
http://tinyurl.com/jubkm
-> 72% of customers have credit cards
Credit card company UFJ Nicos announced that a survey conducted
recently found that a record 72% of Japanese consumers own and use
credit cards. Apparently credit cards are now used an average 36.5
times a year. Just over half the respondents said they use their cards
for department store purchases, 44% use them at supermarkets, and 20%
at hospitals. (Source: TT commentary from nikkei.co.jp, May
18, 2006)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20060518D18JFA18.htm
-> DoCoMo cell phone credit cards
DoCoMo's DCMX credit card company started business this
last week, allowing users to rack up credit purchases by waving their
cell phone over a reading device. DCMX uses the same Sony Felica
technology as is used for Edy cards. Already there are 3m "wallet
phone" Edy debit cards in use, which has encouraged DoCoMo to predict
that it will sign up 10m DCMX customers over the next 3 years. The
company is targetting purchasers of goods and services
priced at less than JPY3,000 (US$27), a market sector which
it estimates to be worth JPY57trn (US$510bn) a year --
and which when 1-2% is skimmed off the top could create a
very desirable cash stream for the company. (Source: TT
commentary from asahi.com, Apr 28, 2006)
http://www.asahi.com/english/Herald-asahi/TKY200604280146.html
->Oil reserves up to 95 days
The METI ministry has said that Japan's national oil
reserve will be raised from 90 to 95 days supply, an
increase of about 15m barrels of crude. The increase is designed to
buffer the country from surging oil prices and supply disruption from
the Middle East -- from whence Japan draws 95% of its supplies. ***Ed:
Compared to the USA, Japan is in pretty good shape. The USA has 347m
barrels of oil in reserve and inventories, which at the current
consumption rate of 20m barrels is just 17 days supply!**
(Source: TT commentary from japantimes.co.jp, May 20, 2006)
http://search.japantimes.co.jp/cgi-bin/nb20060520a6.html
NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.
| +++ CANDIDATE ROUND UP |
DaiJob, Inc's executive placement team, Daijob Consulting
-----------------------------------------------------------------------------------------------
DaiJob has great candidates. Contact Andrew Peters at
[email protected], or Ph: 03-3499-3040 for details.
-> BPR for large Multinational
Male, Mid-30s, Native Japanese, Fluent English
Experience:
- Comprehensive experience in manufacturing business
- Business Process Management <development/re-engineering/improvement>
- Analyze, design, implement new business processes and framework to meet business strategy
- Liaising with business/IT
- Extensive project management in global work environment
*Looking for JPY8.5M. Available 1 month's notice.
--------------------------------------------
-> Overseas Sales Manager
Male, early 40's, native Japanese, business English
Experience:
- Over 15yrs sales/marketing
- History of excellent performance
- Specialized in chemical and optical products (CD-R/CD-RW)
- Excellent interpersonal skills
- Ability to work with different divisions/ cultures
- Proven ability to analyze and solve problems
- Division Manager responsibilities: managing, procurement, logistics in Japan/overseas, and new business partnerships
- Staff supervision, training, and operations
- Compliance Committee member
* Looking for JPY7M. Available 1 month's notice.
- 8yrs HR administration for multinationals in Japan
- Multiple industries: IT, finance, consumer goods
- HR incl: recruiting, hiring subcontractors, temp staff
- New-hire orientation, expat administration management
- Planning & implementation of hiring policies, incl. reviewing expat HR policies and process
- Management of employment and labor law issues
- Payroll, social insurances admin., etc.
- General affairs, office moves, OA equipment procurement
--------------------------------------------
-> HR admin, management
Female, late 30s, native Japanese, business English
Experience:
* Looking for JPY7M. Available 1 month's notice.
DaiJob has great candidates. Contact Andrew Peters at
[email protected], or Ph: 03-3499-3040 for details.
| +++ UPCOMING EVENTS/ANNOUNCEMENTS |
Entrepreneur Association of Tokyo Interested in expanding your business into the world's fastest growing economy? If so, then you are in luck because EA-Tokyo will be gathering a panel of experts on doing business in China for their third anniversary panel discussion. The panelists will be addressing some common questions, such as how to get started up in China and the major cultural and bureaucratic issues encountered there. Website: http://www.ea-tokyo.com. |
IT events announcements are priced at JPY50,000 per week. |
>>>>--------------------------------------------------<
END
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| +++ ABOUT US |
Written by: Terrie Lloyd[email protected].
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