Japan: contracts, corporate, trademarks and employment
Japan is a civil law jurisdiction with a modernised Civil Code, a detailed Companies Act and a trade mark office that examines quickly. Foreign groups typically operate through a kabushiki kaisha (KK) or godo kaisha (GK), contract in Japanese or bilingual form, and need documents that work with Japanese registration, seal and employment practice rather than against it.
LegalMatrix prepares documents on its AI-assisted workflow and delivers in Japan through a Japanese law firm engaged as its delivery partner. Every document is reviewed and signed off by a bengoshi admitted to a Japanese bar association before release, with Japanese and English texts aligned. Trade mark searches and filings are made by a registered Japanese patent attorney (benrishi).
Contracts
| Topic | Essentials |
|---|---|
| Governing law | Parties may choose the governing law under Article 7 of the Act on General Rules for Application of Laws. Japanese counterparties commonly expect Japanese law and a Tokyo District Court or JCAA arbitration forum; foreign law is accepted in cross-border supply and licensing deals. Mandatory Japanese rules (for example consumer, labour and subcontracting rules) apply regardless of choice. |
| Language | Court proceedings are in Japanese and a foreign-language contract must be translated for litigation. Bilingual contracts with a prevailing-language clause are standard for cross-border work. |
| Electronic signature | The Act on Electronic Signatures and Certification Business (Act No. 102 of 2000) defines an electronic signature as a measure that shows the information was created by the signatory and allows alteration to be detected (Article 2). Article 3 presumes an electronic record authentic where it bears an electronic signature that only the principal could have made. Government guidance issued in 2020 confirmed that cloud-based signing services can meet Article 3 where the service verifies the signer's identity and the process is sufficiently secure. Some documents still require paper or notarial form (for example notarial deeds and certain registration filings), and many Japanese companies continue to use registered seals (jitsuin) with seal certificates for registry filings. Check the authority: https://www.japaneselawtranslation.go.jp/en/laws/view/3821/en |
- The 2020 Civil Code reforms modernised limitation periods, warranty for non-conformity (contract non-conformity liability) and standard terms rules (teikei yakkan).
- Electronic contracts are not subject to revenue stamp tax (inshi-zei), whereas certain paper contracts are; this is a practical reason to sign electronically.
- The Subcontract Act (renamed and strengthened with effect from 2026) regulates payment terms and conduct toward smaller suppliers; check the Japan Fair Trade Commission for current scope.
- Company contracts are often executed with the company's registered seal; a signature by the representative director is also valid.
Corporate
| Topic | Essentials |
|---|---|
| Director duties | Directors of a KK owe a duty of care of a good manager (zenkan chui gimu) under the Civil Code via Article 330 of the Companies Act and a duty of loyalty under Article 355. Conflict-of-interest and competing transactions need board (or shareholder) approval. A representative director need not be resident in Japan. Members (shain) of a GK owe equivalent duties. |
| Shareholder rights | Ordinary resolutions pass by a majority of votes present with a quorum of a majority of voting rights (the articles may adjust); special resolutions need two-thirds of votes present. Shareholders have inspection rights over the shareholder register, minutes and accounting books (subject to thresholds), and appraisal rights on fundamental changes. GK members decide by unanimous consent unless the articles provide otherwise. |
| Share transfers | Most private KKs restrict share transfers in their articles, so a transfer requires board or shareholder approval and is effective against the company on entry in the shareholder register. A GK interest transfer needs the consent of all other members by default. No stamp duty applies to share transfers; a shareholder change in a KK is not filed with the Legal Affairs Bureau, but a GK member change is. |
- The KK is the standard operating and fundraising vehicle; the GK is simpler and cannot issue shares or stock acquisition rights, which limits its use for employee equity.
- The commercial registry (Legal Affairs Bureau) records directors, capital and the articles' transfer restriction, and extracts are the usual proof of authority.
- Board minutes and shareholder minutes are mandatory records and must be in Japanese for registry filings.
- Beneficial ownership information is lodged with the Legal Affairs Bureau on a voluntary certification basis; check the authority for current obligations.
Trademarks
| Topic | Essentials |
|---|---|
| Authority | Japan Patent Office (JPO) |
| System | First to file. Registration confers the exclusive right; prior use gives only a limited defence where the mark is well known. |
| Time to registration | Approximately 6 to 12 months from filing to registration where there is no office action; an accelerated examination route exists for marks already in use. Check the authority. |
| Classes | Nice Classification with JPO's own list of similar-goods codes; multi-class applications are accepted and the official fee is charged per class. |
| Opposition | Post-registration: 2 months from publication of the registration in the Trademark Gazette (Trademark Act Article 43-2). |
| Term | 10 years from registration, renewable for further 10-year periods; the registration fee may be paid in two 5-year instalments. |
- Foreign applicants without a domicile or office in Japan must act through a Japanese representative, in practice a registered patent attorney (benrishi).
- Japan is a member of the Madrid Protocol.
- A mark not used for three consecutive years may be cancelled on request.
- Transliterations (katakana) of foreign marks are commonly filed alongside the Latin-script mark because similarity is assessed on sound as well as appearance.
Employment
| Topic | Essentials |
|---|---|
| Probation | A trial period (shiyo kikan) of 3 to 6 months is customary. It does not create an at-will relationship: dismissal during or at the end of probation still needs objectively reasonable grounds, although courts allow somewhat wider discretion than for a confirmed employee. |
| Notice | An employer must give at least 30 days' notice of dismissal or pay average wages for the shortfall (Labour Standards Act Article 20). The exception for probationary employees applies only during the first 14 days of employment. Dismissal itself must be objectively reasonable and socially appropriate (Labour Contract Act Article 16). Check the authority. |
| Non-compete | Post-employment non-competes are enforceable only if reasonable, judged on the employer's legitimate interest, the employee's position and access to confidential information, the duration (one year is common; two years is at the upper end), geographic and activity scope, and whether compensation is paid. Ministry of Economy, Trade and Industry reference materials set out the factors courts weigh. |
| Equity | Employee options are issued as stock acquisition rights (shinkabu yoyakuken) under the Companies Act, which requires a shareholder resolution for a KK with transfer restrictions. Tax-qualified stock options receive deferred taxation if statutory conditions on exercise price, period and holding are met; otherwise gains are taxed on exercise. Check the National Tax Agency. |
Products available here
Contracts: drafting and review
Counterparty Contract Review
Negotiation Playbook
Go-to-Market Contract Bundle
NDA Set
Master Services Agreement and SOW
Data Processing Agreement
Successor Programme Document Set
Shareholders' Agreement
Subscription and Share Transfer Documents
Intercompany Services Agreement
Board and Shareholder Resolutions Pack
Cross-Border Employment Contract
Secondment Agreement
Employee Share Option Plan
Executive Equity Grant
Family Holding and Trust Documents
IP rights: applications and portfolio
Trade Mark Search and Filing
Patentability Assessment
Copyright Registration
IP Assignment and Licence
Technology Licence Agreement
IP Portfolio Management
Renewals and Annuities
Trademark Watch
Questions
Should our Japan contract be in Japanese?
If the counterparty is Japanese, a Japanese text (or a bilingual text with Japanese prevailing) avoids translation disputes and is expected. For intra-group documents an English text with a Japanese courtesy translation is common.
Can a KK sign with a cloud e-signature instead of a seal?
Yes for ordinary contracts. Cloud signatures that verify identity are accepted under the Electronic Signatures Act and government guidance, and electronic contracts avoid stamp tax. Registry filings and some notarial documents still use the registered seal.
Is a Japanese non-compete worth including?
Only if it is narrow. Courts weigh the employee's role, duration, scope and compensation; a broad restraint on a junior employee is likely void. Confidentiality and non-solicitation terms are more reliably enforced.
How is a trade mark opposed in Japan?
Japan uses post-grant opposition: anyone may oppose within two months after the registration is published. Before that, the examiner alone assesses the application.
Can a GK grant stock options?
No. A GK has membership interests, not shares, and cannot issue stock acquisition rights. Groups that want equity incentives in Japan use a KK or grant parent-company equity.
How much notice must we give to dismiss in Japan?
At least 30 days, or pay in lieu, and the dismissal must also be objectively reasonable. Notice alone does not make a dismissal lawful.
Guides
Sources
- Japan Patent Office ↗
- Act on Electronic Signatures and Certification Business (Japanese Law Translation) ↗
- Labor Standards Act (Japanese Law Translation) ↗
- Ministry of Justice: commercial and corporate registration ↗
- Ministry of Health, Labour and Welfare ↗
- JPO opposition FAQ (PDF) ↗
Reviewed 26 October 2026. Rules and fees change; confirm with the authority before relying on them.
Documents and filings for Japan
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