Q38: Is the Japanese "Godo Kaisha" different from an American LLC?
ringo tax corporation
Japanese Certified Public Accountant ・Tax Accountant Hiroya Aihara
Ringo Tax Corporation
A: Yes, there are several differences between a Japanese "Godo Kaisha" and an American LLC. For instance, while members of an American LLC can choose to be taxed personally ("member taxation"), a Japanese "Godo Kaisha" is subject to corporate taxation only.
Q: I see, so the main difference between a "Godo Kaisha" and an LLC lies in the taxation method. Are there any other differences?
A: Yes, there are other differences as well. For example, since a Japanese "Godo Kaisha" has corporate status, it is subject to corporate taxation, whereas an American LLC can choose member taxation in some cases. Additionally, there are differences in the scope of liability and handling of debts between members of a "Godo Kaisha" and an LLC.
Q: It's mentioned that some people confuse Japanese "Godo Kaisha" with American LLCs. Can this confusion cause problems?
A: Yes, confusing a Japanese "Godo Kaisha" with an American LLC can indeed cause problems. For example, foreigners might establish a "Godo Kaisha" under the misconception that it operates under member taxation, which is common for LLCs. However, since a "Godo Kaisha" is subject to corporate taxation, it's important to be aware of this difference.
