A , abbreviated in English as "Y.K." or "Co., Ltd.", is a form of business organization in Japan. are based on the German and were implemented in Japan in the Limited Company Act (') of 1940. The

Companies Act of Japan 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 ...

, implemented on May 1, 2006, replaced the with a new form of company called , based upon the American

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 of ...

. Following the implementation, no new YKs were allowed in Japan, but pre-existing YKs were allowed to continue their operations as ''

kabushiki gaisha A or ''kabushiki kaisha'', commonly abbreviated K.K. or KK, is a type of defined under the Companies Act of Japan. The term is often translated as "stock company", " joint-stock company" or "stock corporation". The term ''kabushiki gaisha'' ...

'' under special rules. Whether the term is pronounced as ' or ''yūgen kaisha'' is up to the local dialect or the company's preference when it is part of the company's name. While it is pronounced ' in standard Japanese, the alphabetic abbreviation is always Y.K. by standard.

Structure

As of 2005, a Y.K. can have up to 50 investors, called . The members were required to provide at least ¥3 million in capital contributions, with each valued at no less than ¥50,000. The minimum capital amount was much more permissive than the ¥10 million minimum for a ''kabushiki gaisha''. A Y.K. was also not required to issue certificates for investment units, whereas stock certificates were required for a K.K. Unlike a K.K., a Y.K. does not need to have a board of directors or statutory auditors: the minimum requirement is one . Because of its simplified structure and relatively lax incorporation requirements, the Y.K. form is associated with small businesses. However, some larger companies have used the form: ExxonMobil's principal Japanese subsidiary, for instance, is a Y.K. with paid-in capital of ¥50 billion (US$420 million).
In addition to simplified

corporate governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions ...

, a Y.K. receives some tax benefits under foreign laws such as the U.S. Internal Revenue Code.

References

{{DEFAULTSORT:Yugen Gaisha Types of business entity Japanese business law Japanese business terms 1940 establishments in Japan 2006 disestablishments in Japan