A gōshi gaisha is a type of " unlimited liability" incorporation under the

Companies Act of Japan The law of Japan refers to the legal system in Japan, which is primarily based on legal codes and statutes, with precedents also playing an important role. Japan has a Civil law (legal system), civil law legal system with six legal codes, which ...

, but its structure is similar to that of a

limited partnership A limited partnership (LP) is a type of partnership with general partners, who have a right to manage the business, and limited partners, who have no right to manage the business but have only limited liability for its debts. Limited partnership ...

. Unlike the other types of corporate structure ( gōdō gaisha and

kabushiki gaisha A or ''kabushiki kaisha'', commonly abbreviated K.K. or KK, is a type of defined under the Companies Act of Japan. The term is often translated as "stock company", "joint-stock company" or "stock corporation". The term ''kabushiki gaisha'' in ...

), there is no limit on what a of the

company A company, abbreviated as co., is a Legal personality, legal entity representing an association of legal people, whether Natural person, natural, Juridical person, juridical or a mixture of both, with a specific objective. Company members ...

is legally responsible for.

Structure

In a gōshi gaisha, partners are divided into two categories: (1) a general partner who has unlimited liability similar to a partner in a general partnership and (2) a limited partner who has

limited liability Limited liability is a legal status in which a person's financial Legal liability, liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company, or joint venture. If a company that provides limi ...

only up to the amount he has invested in the partnership (limited partner). All partners are still directly liable to

creditors A creditor or lender is a Party (law), party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided ...

of the

partnership A partnership is an agreement where parties agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations ...

, and thus partners can still be sued individually (direct liability).

References

Japanese business law Types of business entity {{Japan-law-stub