are a class of

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

s under

Japanese law The law of Japan refers to legal system in Japan, which is primarily based on legal codes and statutes, with precedents also playing an important role. Japan has a civil law legal system with six legal codes, which were greatly influenced by Ger ...

. While mochibun kaisha have

legal personality Legal capacity is a quality denoting either the legal aptitude of a person to have rights and liabilities (in this sense also called transaction capacity), or altogether the personhood itself in regard to an entity other than a natural pers ...

as corporations, their internal functions are similar to

partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments ...

s, as they are both owned and operated by a single group of .

Types

There are three types of mochibun kaisha: * Gōmei gaisha, in which all members have

unlimited liability An unlimited company or private unlimited company is a hybrid company (corporation) incorporated with or without a share capital (and similar to its limited company counterpart) but where the legal liability of the members or shareholders is not ...

for the company's debts (similar to a

general partnership A general partnership, the basic form of partnership under common law, is in most countries an association of persons or an unincorporated company with the following major features: *Must be created by agreement, proof of existence and estoppel. ...

) * Gōshi gaisha, in which some members have unlimited liability and some have

limited liability Limited liability is a legal status in which a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company or partnership. If a company that provides limited liability to it ...

(similar to a

limited partnership A limited partnership (LP) is a form of partnership similar to a general partnership except that while a general partnership must have at least two general partners (GPs), a limited partnership must have at least one GP and at least one limited ...

) * Gōdō gaisha, in which all members have limited liability (very similar to a U.S.

limited liability company A limited liability company (LLC for short) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability ...

) Mochibun kaisha are formed by preparing articles of incorporation and depositing the articles with a local Legal Affairs Bureau. The Japanese civil code also provides for , a different type of business organization. Civil code partnerships lack legal personality and are mainly used for investment funds and professional firms.

Types

References

See also