Can a kabushiki kaisha without a representative director legitimately do business in Japan?

It’s an emphatic no, right? Even though a few foreign companies try this every now and again. More in a bit.

Also: Arudou Debito finally takes a well-deserved vacation. Why you should read his books, and especially get “Handbook”.

[Update: Yes, so on the first one, you may or may not know that kabushiki kaisha is the “K.K'” that you see attached to so many corporation names in Japan. What the corporation law says is that a K.K. must have at least one representative director who has a registered address in Japan and resides in Japan. It is not a maildrop or a place that that the director claims is his residence when he/she in fact resides in another country.

If you don’t have a valid representative director, you’re really doing business illegally in Japan and are supposed to shut down, right?

I am dealing with a situation where a place I dealt with a few years ago did not have a resident representative director. Now, they want to pretend they did. I have the evidence that, no, they did not. But I want one of you legal eagles to tell me what the ramifications are, if they are not what I think they are . . . ]

[Update #2: I was happy to see that Debito is taking a break from near-daily posting on his popular blog, Debito dot org. He has really been doing a lot to raise issues of civil rights, equal protection and fundamental fairness through his writings and other, kind of, awareness raising of the many unnecessary difficulties that non-Japanese face in Japan.

I can’t stress enough that I don’t think the moniker “controversial” should ever apply to what he has been doing over the past 12+ years. I think it’s more fitting to say that he has been doing the necessary pointing out about situations that really shouldn’t be existing in the first place.

It is good to hear that he’s writing another book. I never read the first two, (because I learned that they were mostly the same as writings out on the internet website anyway.) But one of my most favorite books is the “Handbook for Newcomers”, and I just always suggest to people that they buy the hardcopy of if. I think Debito got smart and realized that if you’re going to give out information, then put it in a book and not out on the net first.

But just practically, the Handbook has a wealth of information about basic areas of living in Japan, like having a job, getting married, renting and apartment—all these sorts of things.

I have occasionally offered suggestions for a version 2.0 of the book, when you get into heavier stuff in Japan like “hey, I have no pension from my employer!” or “hey, my landlord is overcharging me and telling me that my apartment is governed under the hotel law, not the land lease law!” Or how about this one: “hey, my employer wants to term-limit me out of regular employment, so they’ve stuck a contract under my nose to sign, and threaten not to keep me on payroll if I don’t!”

Those would be good version 2.0 topics.

I don’t know what Debito’s actual forthcoming book is, but if I find out from him (because I intend to ask), I will probably be sworn to secrecy anyway.

Good luck, Debito! And get away from the net for a while!]

10 thoughts on “Can a kabushiki kaisha without a representative director legitimately do business in Japan?

  1. My feeling has always been I choose to live/work in Japan. No one forced me to come here and I have always measure the good with the bad. and as long as the positive outweighed the negative I`m fine.
    Now for someone to give up their US citizenship to live in a country with as many faults as Debito finds well… I just don`t get it. Whatever he`s trying to prove/change the Japanese certainly don`t care and probably never will.
    I`ve lived in Japan coming up on 25 years and I found it all rather simple: You find yourself a nice niche which works for you or you pack up and leave.

    1. Ken, yours is a common opinion and I appreciate what you are saying.

      The trouble, and I think you will appreciate that the Debito camp sees this, is that willingness to be a part of Japan does not mean become a second-class citizen, or be a person accorded less than FCN treaty dignity, within the country.

      Japanese leave their country and come and settle and make lives in the countries of the Anglosphere. They benefit from Western laws, due process, equal protection and notions of fundamental fairness. Is the reverse really true in Japan, particularly re government and corporate policies and actions?

      I happen to think that Debito is non-controversial and he is just posting common sense. I noticed that many of his critics are people who have found themselves a Japanese Sugar Daddy or Mommy somehow, or are part of the Expat Sellout Elite. (These people existed in the POW camps, too, in a version of sorts, and have always been part of the Western community in Japan.)

      The problem about “Japan: love it or leave it, or leave it anyway when we say to!” is that the government then becomes particularly sensitive about what the repatriated expat then says or does once he gets back to the home country. Most people abroad (i.e. back here) don’t know very much about Japan, have World War II or Showa Bubble-era ideas about it, and are shocked to learn some of the not-so-nice things that can happen to you there–mostly involving the things that Debito focuses on, but plus just the general cheating.

      The people who get so worked up about the issues being discussed do this so many times, and in such a knee-jerk fashion, that I really feel they have made their own nice life or deals with “Japan”, and they simply don’t want the light of truth shined on whatever their situation is. I cannot otherwise explain why there is that knee-jerk reaction.

      1. (I was going to avoid posting about this topic but I feel my hand has been forced.)

        Hoofin, I can appreciate that you feel you got a raw deal out of your time here in Japan. Trust me, I hear you. But is it really Japan’s fault? Really?

        By NO means do I intend to imply that any of it is your fault either. It’s nobody’s fault. Nasty things can happen to nice people. I was done over by a previous employer here and for a while, I was blaming the [insert nationality of the company in question that I won’t mention] but that was unfair. I was done over by a politicking @sshole that I have refused to have any dealings with later on whenever our paths crossed again from time to time. (He ended up at my next company for a bit and after that, he ended up at Lehman Bros. so you may know of him. But that isn’t important right now.)

        I moved on. Moved on to much bigger and better things. I make a decent living here amongst the natives and I can scarcely be considered part of any sort of “Western community”. But now, you are accusing me of having a Japanese Sugar Daddy/Mommy or being a sell out to the Japanese? WTF? Seriously, W-T-F? You are coming across as having a severe case of reverse schadenfreude and it is a HUGE turn off. I just got some bad news about my house loan today. Am I blaming Japan? No. I am coming up with a contingency plan and will work out a better deal for myself.

        I realise that Japan isn’t peaches and creme (or azuki and ma-cha) all the time but then no place is. I defy ANYONE to find such a place. I do NOT look at Japan through rose tinted glasses but neither do I view it through the sh!t-coloured glasses favoured by certain individuals on an island prefecture. Life is too short for that.

        1. Yes, Chuckers, let me get back to you in a bit. But it sounds like you are making the Moving On critique and the Nobody is a Strawman critique. I think that both of those concepts have some merit, but they are overemployed in certain contemporary situations. I want to do your comments more justice, so give me a while.

          1. And as you obviously now know, it wasn’t simply a matter of a “raw deal”—it was:

            1) not being paid for work; and

            2) breach of a pretty clear contract.

            I am sure if the firm you are with downtown were engaging in those sorts of practices, you would only expect that the person you are telling to “move on” would be knocking at your door. No one is blaming all the Japanese–you made that up. In fact, if you knew better, part of the liability is with an American company itself.

  2. Been meaning to respond to this but have had a nasty couple of days at work. Was going to ask someone with a bit more knowledge of this today but didn’t get a chance after several things blew up.

    From what I can gather, when you REGISTER you[r] company, you need to have the representative have an address in Japan. Without that, the registration will be denied. After registration, I can’t seem to find any indication that the representative needs to REMAIN in Japan (but again, I haven’t had a chance to ask someone more expert tha[n] I about this.)

    It is also possible to have more than one representative officer at the same time, provide[d] one of them has an address in Japan. A representative of the representative, if you will.

    1. Chuckers, I have heard that explanation, and I feel it’s the elegant bullshit explanation. No offense to you, of course, but you’re right that that’s been around.

      A representative director is more than a chairman in the western corporate setting. A representative director is supposed to embody something of the corporation and be personally liable up to a certain multiple of their salary. “Representative Director” is often translated as president or chairman, but really it’s not exactly the same, and hence the name “representative director”.

      If you let your representative directors reside anywhere, it defeats the purpose of jurisdiction and personal liability for some of the actions of the stock corporation. The reason there is the residency requirement is not to create Japanese boondoggles; it’s to assure that all the other laws are properly followed by the corporation, and that it isn’t involved in some bad social purpose.

      1. Just got done asking someone that is more of an authority on these things than I.

        As I stated, you are allowed to have more than one representative director. At least one of those persons needs to have an address permanently in Japan. Being outside of Japan for more than 180 days will result in all the paperwork and hoops gone through to become a company to become null and void, so you can’t just skip town after the company is up and running. I was incorrect on that but my excuse is that I only did a cursory glance around the web for this kind of info.

        However, there are services available for hire that will loan the use of a name (and address) in Japan that will allow you have a representative director to meet the correct guidelines. This is not even considered a legal grey area. This is a legitimate thing that can be done. It apparently isn’t cheap, though. They will want some insurance against you doing something shady and are usually paid an administrative monthly fee.

        If one of your previous companies appears to have had a representative director who didn’t even have a vacation home in the land of WA, I suspect they were using one of these services.

        1. Chuckers says:

          Being outside of Japan for more than 180 days will result in all the paperwork and hoops gone through to become a company to become null and void, so you can’t just skip town after the company is up and running. I was incorrect on that but my excuse is that I only did a cursory glance around the web for this kind of info.

          Thanks for the additional information—it’s consistent with what I have been told. (In fact, what I was told was that if there is not one representative director resident in Japan, the company’s contracts and other activity can be rendered void, i.e. voidable.)

          I knew that there can be more than one representative director; but the minimum is that there is ONE. Some of these companies try NONE. Two is O.K. One is the minimum. None is bad.

          I wasn’t holding you to the first comment you made, of course. Someone a couple of years back told me something similar, who was trying to convince me of it in that way which we all just smell it after a bit.

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