Yugen Kaisha (YK)

What Was a Yugen Kaisha (YK)?

A yugen kaisha (YK) was a type of limited liability company that could be laid out in Japan from 1940 through mid 2006.

The Companies Act enacted in Japan in June 2005 abrogated the YK business form. The law changed most YKs into KKs, or kabushiki kaisha (KK) — which were thusly supplanted by godo gaisha (GG), a joint-stock company, which is currently the most common business form in Japan. The corporation law likewise changed the corporate governance of YKs.

Figuring out the Yugen Kaisha (YK)

The YK corporate structure depended on the German GmbH, a limited liability company and the most common form of corporation in Germany. Japan's YK structure was commonly utilized by small businesses and could have a maximum of 50 shareholders. The shareholders, called individuals, were on the whole expected to contribute 3 million yen in capital. YKs were expected to have one chief, however they didn't have to have a full top managerial staff.

After the Japanese Companies Act of 2005, which became effective on May 1, 2006, no new YK could be formed, and the structure was supplanted by godo gaisha.

The 4 Forms of Japan's Corporate Entities

1. Gomei kaisha (a partnership)
2. Goshi kaisha (a limited partnership)
3. Yugen kaisha (a limited liability company)
4. Kabushiki kaisha, supplanted by godo gaisha (a joint-stock company)

A yugen kaisha might have been viewed as like a subchapter S corporation, (a limited liability company, or LLC) or partnership in the United States while a KK is a standard corporation). The bookkeeping, capitalization, and procedural requirements for a YK are substantially less severe than those for a KK. The owners of a YK have limited liability, yet they likewise are restricted in the transfer of shares. The company can't offer shares to the public.

Japan is a nation of small businesses. As indicated by David Luhmen of Luhmen.org, 70% of all Japanese companies have less than 20 employees, and most Japanese companies are formed as GG as opposed to YKs. GGs are viewed as bigger and more renowned in Japan, which is a picture cognizant nation where appearances are important.

Capitalization Requirements for KKs and YKs

The capitalization requirements for KK's and YKs changed in 1991. Before 1991, YK, a limited liability company, could be formed with roughly $1,000. After 1991, the base capitalization amount was changed to $30,000 (with one dollar rising to \u00a5100). Moreover, simultaneously, the base capitalization amount for a KK, a standard corporation, increased from about $4,000 to $100,000.

Due to its simplified structure and generally careless incorporation requirements, the YK form was associated with small businesses. Be that as it may, a few bigger companies have utilized the form, for instance, ExxonMobil's really Japanese subsidiary was a YK.

Features

• Because of the 2005 Companies Act of Japan, the yugen kaisha form was annulled effective 2006.
• A yugen kaisha (YK) was a form of limited liability company once common in Japan.
• YK firms were restructured as joint-stock companies known as kabushiki kaisha (which themselves were subsequently supplanted by godo gaisha).