It is a type of mochibun kaisha (corporation having a simplified internal structure like that of a partnership) distinguished by offering limited liability for all investors.
A GK is formed by articles of incorporation (定款, teikan) signed between its investors, called members (社員, shain).
Following ratification of the agreement, the GK's articles of incorporation and corporate seal must be registered with the Legal Affairs Bureau (法務局, hōmukyoku).
Once the bureau processes the registration, the company may open a bank account, seal contracts, and engage in other activities as a legal entity.
Under United States tax law, gōdō gaisha are not classified as corporations, and are therefore eligible to make an entity classification election: a single-member GK may be treated as an extension of its member and a multi-member GK may follow the tax rules for partnerships.