In a company name, "株式会社" can be used as a prefix (e.g. 株式会社電通, kabushiki gaisha Dentsū, a style called 前株, mae-kabu) or as a suffix (e.g. トヨタ自動車株式会社, Toyota Jidōsha kabushiki gaisha, a style called 後株, ato-kabu).
"[2] Japanese often abbreviate "株式会社" in a company name on signage (including the sides of their vehicles) to 株 in parentheses, as, for example, "ABC㈱."
These forms, however, only exist for backward compatibility with older Japanese character encodings and Unicode and should be avoided when possible in new text.
[4] Rules regarding kabushiki gaisha were set out in the Commercial Code of Japan, and was originally based on laws regulating German Aktiengesellschaft (which also means share company).
[citation needed] The purpose statement requires some specialized knowledge, as Japan follows an ultra vires doctrine and does not allow a K.K.
[citation needed] Additionally, the articles of incorporation must contain the following if applicable: Other matters may also be included, such as limits on the number of directors and auditors.
[citation needed] The articles must be sealed by the incorporator(s) and notarized by a civil law notary, then filed with the Legal Affairs Bureau in the jurisdiction where the company will have its head office.
K.K.s with capital of over ¥500m, liabilities of over ¥2bn and/or publicly traded securities are required to have three statutory auditors, and must also have an annual audit performed by an outside CPA.
Most Japanese-owned kabushiki gaisha do not have "officers" per se, but are directly managed by the directors, one of whom generally has the title of president (社長, sha-chō).
The Japanese equivalent of a corporate vice president is a department chief (部長, bu-chō).
Traditionally, under the lifetime employment system, directors and department chiefs begin their careers as line employees of the company and work their way up the management hierarchy over time.
have also abandoned this system in recent years in favor of encouraging more lateral movement in management.
[citation needed] Kabushiki gaisha are subject to double taxation of profits and dividends, as are corporations in most countries.
[citation needed] Generally, the power to bring actions against the directors on the corporation's behalf is granted to the statutory auditor.
Shareholders have been permitted to sue on the corporation's behalf since the postwar Americanization of the Commercial Code; however, this power was severely limited by the nature of court costs in Japan.
Because the cost to file a civil action is proportional to the amount of damages being claimed, shareholders rarely had the motivation to sue on the company's behalf.
[citation needed] In 1993, the Commercial Code was amended to reduce the filing fee for all shareholder derivative suits to ¥8,200 per claim.