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【Company Secretary】Public vs. Private Company

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ARK Outsourcing KK provides one-stop service mainly to Japanese branches or subsidiaries of foreign-based companies.
In this article, we will introduce the basic information about making English company documents such as articles of incorporation or meeting minutes in a dialogue style. The contents of this article are based on our discussions in the internal study group.

Ken (male):      
Ken is 22 years old. He has been with ARK for a year.
(He has been enjoying conversation with his client in English these days.)

Emma (female):  
Emma is 34 years old. She is a mother of one child and a trainer at ARK.
(She has not taken a summer vacation yet. She is planning to go to Guam.)

George (male):   
George is 46 years old. (He wants to challenge snow mountain climbing.)

Emma, you know the news about Jonny’s, right? Aren’t you in the Jonny’s fan club? Surprisingly, I found that Jonny’s is a small and medium sized company (a SME). In addition, it is not a listed company. Did you know that? At this timing, is it possible to buy Jonny’s shares?
Can’t you buy some shares for me? You must have some privilege as a member of the fan club! 

No way! I am not a member of the fan club! But it is surprising that such a well-known company is a SME.
Under the Company Law, a stock company (Kabushiki-Kaisha, KK) is classified into two categories: a public company and a private company. As for a private company, there are provisions relating to restriction on transfer of shares in the articles of incorporation. This is not the same as the difference between a listed company and an unlisted company.

I know you are good at it!
As Emma says, the difference between a private and a public company is whether the company can transfer its shares freely. There are also some other differences such as the company’s organs, the term of office of officers, and the total number of authorized shares. Except for listed companies, there is no merit of setting up public companies. That’s why, many SMEs select a private company style, and there are cases where the ownership and the management are not exactly separated.

In this article, we mentioned “public vs. private company what’s the difference?”
Please note that this article only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.