Yugen kaisha

Encyclopedia : Y : YU : YUG : Yugen kaisha

A yūgen kaisha (Jp. 有限会社, lit. "limited company," abbrev. Y.K.) is a form of business organization in Japan.

Yugen kaisha are based on the German GmbH and were implemented in Japan in the Limited Company Law (有限会社法) of 1940. The Corporations Act, implemented on May 1, 2006, replaced the yugen kaisha with a new form of company called godo kaisha, based upon the American limited liability company.　Following the implementation, no new YKs were allowed in Japan, but pre-existing YKs were allowed to continue their operations as kabushiki kaisha under special rules. [link]

The usual Japanese language pronunciation is yugen-gaisha, but the "K" spelling is much more common in English language company names and legal literature.

Structure

As of 2005, a Y.K. could 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 kaisha. 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. did not need to have a board of directors or statutory auditors: the minimum requirement was one .

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