Business Purposes and Licensing Requirements in Japan: Articles of Incorporation Compliance

In Japan, a company’s business purposes are classified as mandatory absolute matters
that must be stated in the Articles of Incorporation, and they also become part of the
official commercial registry.

Under the Japanese Companies Act, a corporation is legally permitted to engage only in those business activities
that fall within the scope of the purposes expressly stated in its Articles. Any activity outside that
scope may be deemed ultra vires and may expose the company and its directors to legal risk.

Relationship Between Business Purposes and Regulatory Licenses

If the business to be conducted falls within a regulated or licensed industry—such as
real estate brokerage, construction, secondhand goods dealing, labor dispatch, or travel services—special attention
is required when drafting the business purposes.

In many cases, specific statutory wording must be included in the Articles of Incorporation in order
to qualify for the relevant government license or permit. Failure to include the prescribed wording may result in
the outright rejection of the license application, even if the company is otherwise properly established.

Standard Drafting Method for Business Purposes

As a matter of standard Japanese corporate drafting practice, business purposes are typically structured as follows:

• The company’s principal business lines are listed individually as numbered items; and
• The final clause concludes with:
  “All business incidental or related to each of the foregoing items.”

This standard “incidental business” clause is critically important. By including it, the company is legally permitted
to engage in business activities that are not explicitly listed but are reasonably related to the stated
core purposes.

Using Public Company Articles as Drafting References

When selecting appropriate wording for business purposes, it is common practice to refer to the
Articles of Incorporation of publicly listed companies operating in similar industries. These can be accessed
through:

• The Tokyo Stock Exchange website, and
• The investor relations (IR) pages of listed companies.

Such references are particularly helpful for ensuring that the phrasing is consistent with licensing practice,
banking compliance expectations, and Immigration Services Bureau review standards in the context of the
Business Manager Visa.

Examples of Licensed Business Purposes in Japan

Licensed Industry	Sample Business Purpose Language
Real Estate Brokerage	Real estate brokerage business (Takken) Sale, leasing, brokerage, and management of real property
Construction Industry	General contracting and execution of civil engineering and construction work Construction contracting Civil engineering contracting Carpentry, plastering, and related construction services
Food & Beverage Industry	Operation of restaurants, including izakaya, restaurants, and internet cafés
Secondhand Goods Dealer (Antiques License)	Sale and purchase of secondhand goods under the Secondhand Articles Dealer Act Purchase, sale, and export/import of used automobiles Purchase, sale, and export/import of used office equipment
Worker Dispatching Business	General and specified worker dispatching business
Travel Agency	Travel business under the Travel Agency Act Travel agency intermediary services

Source: Continental Immigration Administrative Scrivener Corporation

Strategic Importance of Purpose Drafting for Foreign Entrepreneurs

• The business purpose clause directly determines the lawful scope of corporate activity.
• Improper wording can result in license denial even after incorporation is complete.
• Immigration authorities evaluate business purposes as part of Business Manager Visa screening.
• Banks and counterparties also rely on registered purposes when conducting compliance reviews.
• The final “incidental business” clause serves as a vital legal flexibility provision.

Because business purposes serve as both a legal boundary and a compliance gatekeeper,
they must be drafted with precision from the outset—particularly for foreign founders seeking to operate in Japan under
the Business Manager Visa framework.

 

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New Publication Release
“Handbook for Supporting Foreign Entrepreneurs in Japan”
By Masakazu Murai
Published by Nihon Horeisha, August 21

 

Professional

Masakazu Murai Immigration consultant, financial advisor 18 years’ experience in Investment Banking at Mitsubishi UFJ Morgan Stanley. He had provided financial advisory more than 500 entrepreneurs and senior management.

Gyoseishoshi Immigration Lawyer
– Co head of the Tokyo Gyoseishoshi Association, Minato branch
CMA(Japanese financial analyst license)
CFP (Certified Financial Planner)
MBA in Entrepreneurship
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