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How to make a Non Profit Organization in Japan. ( NPO Hojin = NPO法人=  = 特定非営利活動法人 = Tokutei hi eiri katsudou houjin = nonprofit corporation = nonprofit association )

In the case a person ( Named Nancy ) wants to engage in non profit making activity in Japan, but she needs to make legal entity, she can set up NPO in Japan.

For example, she wants to make NPO to help victims in disaster area, she can establish NPO in Japan.

In order to make NPO in Japan, she needs to obtain authorization called ” Ninshou = 認証 “.

She can not make NPO for specific persons.

In the case a person is suffering from intractable disease, she cannot make NPO to support him.

But she can make NPO for people who are suffering from this disease.

If purpose of her organization is included in below, her organization needs to pay corporate tax.

Selling of commodity (物品販売業)

Selling of real estate (不動産販売業)

Money lending business (金銭貸付業)

Lending of commodity business (物品貸付業)

Lending of real estate (不動産貸付業)

Manufacturing business (製造業)

Telecommunication business (通信業)

Carrier business (運送業)

Warehousing business (倉庫業)

Contracting business (請負業)

Printing business (印刷業)

Publishing business (出版業)

Photograph business (写真業)

Lending seat business (席貸業)

Hotel business (旅館業)

Restaurant business (料理店)

Mediation business(周旋業)

agency business (代理業)

whole sale business (問屋業)

Mining business (鉱業)

Bathhouse business(浴場業)

Hair cutting business (理容業)

Promoting business (興行業)        

Game hall business (遊技所業)

Worker dispatching business (人材派遣業)

medical care insurance program business (医療保健業)

Teaching of art business (一定の技芸教授業等)

Parking business (駐車場業)

Guarantor business (信用保証業)

Providing intangible property right (無体財産権の提供等を行う事業)

I know that these descriptions are not clear for you.

So, when you make NPO in Japan, you need to confirm with tax agency whether purpose of your organization is included in these purposes.

For example, if you set up Non Profit Organization to teach foreign language or computing, the purpose is not included in the purpose above.


In order to make NPO in Japan, she needs to obtain authorization called ” Ninshou = 認証 “.

( And if government agency  thinks that her NPO will contribute public interest than ordinary NPO, her NPO can obtain authorization called ” 認定 = Nintei  “.)


So, even if your NPO receives tuition fee from students, your NPO Houjin (  NPO ほうじん ) does not need to pay corporate tax.

However, when your NPO sells software, computer to your students, as for the selling price, corporate tax shall will levied.

If you set up Non Profit Organization ( NPO ) to manage nursery school ( Hoiku en ), the purpose is not included in the purpose above.

So, even if your NPO receive childcare fee from parents of nursery school children, your NPO Houjin (  NPO ほうじん ) does not need to pay corporate tax.

If your nursery school sells text book, picture book to parents of nursery school children, corporate tax is not levied.

However, when your NPO sells scissors, glue, uniform to your parents of nursery school children,  as for the selling price, corporate tax shall will levied.

In the case NPO receives subsidy, membership fee (= kaihi), as far as there is not compensation, basically corporate tax will not be levied.

However, if these subsidy or membership fee is used for business mentioned above, corporate tax shall be levied.

Moreover, even if the subsidy or membership fee are used for the above mentioned business, when the money is used for acquisition of fixed asset, corporate tax shall not be levied.

In the case NPO issues receipt, even if it is related to above mentioned business, stamp duty is not  levied.

( In the case of ordinary commercial legal entity, when it issues receipt of more than 30,000 yen, stamp duty is levied. )

However, as for stamp duty on contract paper is always levied.

As for corporate inhabitant tax ( Houjin Jumin zei ), NPO needs to pay it.

However, if it does not conduct business mentioned above, there is a possibility to avoid payment. (  She needs to submit application for exemption from payment ).

NPO can not distribute its profit among members ( It means shareholder in case of joint stock corporation. They are often called ” sei kai in = 正会員 ” ) even if it gets some profits.

If NPO employs some persons, it can pay salary to its employees. And if there is still profit in NPO, such money shall be used for operation of NPO.

NPO can not pay a dividend.

NPO must appoint at least  three directors ( Riji ) and one auditor secretary ( Kanji ).
( Herein after referred to “officers” )

And NPO can not include more than two person who is a spouse or relative within the third degree of kinship of any other officer.

So, if she becomes a director of this NPO, her husband can also be a director. But, their child can not be a director.

And officer and his/her spouse and relatives within the third degree of kinship may not account for more than one-third of all officers.
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Director 1 Director 2 Director 3 Director 4 Director 5 Director 6
Nancy Her husband a person he is not her relative a person he is not her relative a person he is not her relative a person he is not her relative Acceptable

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Director 1 Director 2 Director 3 Director 4 Director 5
Nancy Her husband a person he is not her relative a person he is not her relative a person he is not her relative Not Acceptable

So, if she and her husband become director, NPO needs to appoint four other officers who are not their relatives within three degree of kinship.
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And the number of officers receiving remuneration ( Yakuin Hoshu ) from NPO can not be more than one-third of all officers.

Assumed that she and her husband and four persons are officers in her NPO.
And if she and her husband receive remuneration from NPO, other four officers cannot receive remuneration from NPO.

This remuneration does not mean “salary”.

So, if she works  as teacher as well as director and if she receives only salary as a teacher, she is not included in ” officers receiving remuneration from NPO “.
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:mrgreen: Process of establishing NPO in Japan.

At first, more than two persons should be incorporator ( Hokki nin ) and make articles of incorporation and other necessary documents.
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And they need to appoint  “Members” corresponds to shareholder of joint stock company.
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They have voting right in general meeting.
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Voting right of each member should be equal.
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Even if she invested in this NPO, she cannot operate this NPO on her own authority.
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In the case, other all members resolve that she should leave this  NPO, she can not remain in her office.
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In order to be a member, they do not have to invest in NPO at the timing of incorporation.
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And the number of members should be more than ten ( If she and her husband are member as well as officer, she need to find at least 8 members. ).
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Even minor and foreigners, non resident of Japan can be a members.
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And these members approve these documents.
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Then, she submits necessary documents to competent government agency.
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Necessary documents to apply for authorization to make NPO in Japan.

1 Application form to obtain authorization from competent government agency.

In this paper, she needs to specify name, address, purpose of organization etc.

make NPO Japan, application form
2 Articles of incorporation ( Teikan )

In this paper, she needs to specify following items.
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Articles 1 Name

The name of the Association is Specified Non profit organization 〇〇 Japan (hereinafter referred to as “ NPO 〇〇 Japan ”).
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Articles 2 Location of office.
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Articles 3 : Objectives

The objectives of NPO 〇〇 Japan shall be as follows:
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Articles 4 : Category of Non-Profit Activities
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NPO 〇〇 Japan shall primarily undertake the following activities to achieve the objectives provided in Article 3.
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Articles 5 : Operations related to Non-Profit Activities

NPO 〇〇 Japan shall undertake the following operations to achieve the objectives provided in Article 3.
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Articles 6 : Types of Membership

A full member shall be considered to be staff as prescribed in the “Act on Promotion of Specified Non-profit Activities. ”

NPO 〇〇 Japan shall have the following types of memberships:

(1) Full Member:
(2) Supporting Member:
(3) Honorary Member:
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Articles 7 : Rights of Member

A full member shall have voting rights at the General Assembly.
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Articles 8 : Enrollment

A person who wishes to become a member of NPO 〇〇 Japan should submit application form to NPO 〇〇 Japan.
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Articles 9 : Membership Fee

A member shall pay an annual membership fee.
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Articles 10 : Withdrawal of Membership

A full member may withdraw from NPO 〇〇 Japan by submitting a notification to the Chairperson
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Articles 11 : No Refund

The membership fees and any other money or things given to the NPO 〇〇 Japan shall not be returned for any cause, once paid or given.

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Articles 12 :  Types and Numbers of Officers
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NPO 〇〇 Japan shall have the following officers:

(1) Directors Seven to Twenty-one
(2) Auditors Two or less
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Articles 13 : Selection
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The Directors shall be selected as follows
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Articles 14 : Term
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The Officers’ term of office shall be two years and the Officers may be reappointed.
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Articles 15 : Remuneration of Officers

The Remuneration of the Officers shall be provided for separately
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Articles 16 : Types of General Assemblies

NPO 〇〇 Japan shall have two types of General Assemblies: Ordinary General Assemblies and Extraordinary General Assemblies.
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Articles 17 : Functions

The General Assembly shall resolve the following matters regarding the management of the Center:
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(1) Approval of the activity report and financial statements
(2) Election of Officers….

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Articles 18 : Convening of Assembly

The Ordinary General Assembly shall be held annually within three months after the end of each fiscal year.

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Articles 19 : Constitution of Board of Directors

The Board of Directors shall consist of the Directors.

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Articles 20 : Composition of Assets

The assets of NPO 〇〇 Japan shall be composed of the following items:

(1) Assets specified in the inventory of property at the time that NPO 〇〇 Japan was made
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(2) Membership fees
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(3) Donations
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(4) Operating income
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(5) Asset income
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(6) Other types of income

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Articles 21 : Fiscal Year

The fiscal year of NPO 〇〇 Japan shall begin on April 1 of each year and end on March 31 in the following year.

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Articles 22 :  Appropriation of Surplus

Any surplus after the settlement of accounts shall be carried forward to the following fiscal year.
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Articles 23 : Amendment of the Articles of Incorporation
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Any amendment to the Articles of Incorporation requires approval by a majority of full members present at the General Assembly and authorization by the competent government agency.

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Articles 24 :  Dissolution

NPO 〇〇 Japan shall be dissolved for the following reasons;

In cases where NPO 〇〇 Japan loses all of its full members.

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Articles 25  : Assignment of Residual Assets

Any residual assets in the case of the dissolution of NPO 〇〇 Japan shall be donated to the specified non-profit corporations or the public benefit corporations selected with consent of the majority of full members present at the General Assembly.

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Articles 26 : Public notice

A public notice of NPO 〇〇 Japan shall be conducted by publication in an official gazette.

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Articles 27 :  The initial Officers

The initial Officers of NPO 〇〇 Japan shall be as follows:

Chairperson: Nancy Thomas

 List of directors and auditors and list of directors and auditors who receive remuneration
 list of directors NPO Japan set up
 A document certifying that directors have accepted the assumption of office ( りじのしゅうにんしょうだくしょ )  NPO letter of appointment acceptance of assumption as director Japan
A document certifying that auditors have accepted the assumption of office ( かんじのしゅうにんしょうだくしょ )
Document that certifies residence of officers
List of members of NPO.
( You need to fill in name and address of members of NPO, more than 10 persons )
list of members of NPO
Documents that you declare the activities of NPO are not for the purpose of propagating religious teachings, promoting political principle, recommending a candidate for a public office.  NPO confirmation of purpose of activities, make NPO
Charter ( Documents that clarifies your purpose to make NPO )

Sample.

Nowadays, transportation system have developed. we can go anywhere without walking for long hours. Then, the number of walking hours are decreasing. So, we make this NPO to provide chance to walk with a lot of people. We believe this NPO will contribute improvement of public health.

Conference minute where you have determined to make NPO Conference minute where you have determined to make NPO
Activities plan on the year of establishment and the following year.

( In this documents, you need to clarify the foregoing activity of your NPO. )

activity plan of NPO in japan, setting up
Budget planning ( よさんけいかく ) budget plan to make NPO in Japan,

If government agency accepts her submission, competent government agency makes articles of incorporation and list of members public for two months.
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And after this period, competent government agency will decide whether to authorize the establishment of NPO or not within two months.
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So, in order to make NPO, it will take at least 2 month after application of establishment.
( As for these procedures, Metropolitan Tokyo Government has its jurisdiction if this NPO has its head office within Tokyo. )

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Then, she needs to file registration of establishment of NPO at the location of its head office.
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When she files registration of incorporation of NPO, she does not need to pay registration tax.
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In the case of joint stock company, she needs to pay registration tax of 150,000 yen or more.
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And she need to pay notary public of at least 51,000 yen.

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However in the case of NPO, she does not need to pay this amount of money.
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In order to make NPO in Japan, it will take at least 4 months in Total.
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To make necessary documents to submit competent government agency, it will take 2 weeks.
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To negotiate with officer of competent government agency : 1 or 2 weeks.
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Competent government agency will consume about 3 months to inspect your application.
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To complete registration process : 1 or 2 weeks.
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😛 Conditions to establish NPO in Japan.

The purpose of establishing this organization should contribute public benefit.
For example, contributing to the sound upbringing of children.
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If she establishes a Non Profit Organization in Japan, she can acquire legal entity. So, she can conclude any contract and own real estate under NPO’s name.
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And when people look at the term “NPO”, they may think that her legal entity aims to help some people without gaining profit.

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And her organization may acquire trust of other party.

( However, NPO can get profit through its activity. )

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And in the case of NPO, there is a possibility that her organization can reduce the amount of tax.

On the other hand, Japanese government administer NPO more strictly than other commercial organization.

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NPO must keep several regulations and submit several kind of documents.
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NPO must make documents that announce status of its business and make it public.
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These documents includes as below.

Business report  事業報告書
Statement of accounts しゅうしけいさんしょ
Balanced sheet たいしゃくたいしょうひょう
Inventory of property ざいさんもくろく
Directory of officers やくいんめいぼ
Directory of members しゃいんめいぼ

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Once her NPO is set up, if a person asks that he wants to become a member of NPO, you can not reject his proposal without reasonable reason.
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If her NPO wants to change content of articles of incorporation, resolution of general meeting and authorization from competent government agency are required.

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It will take about 4 months.

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In the case her NPO is dissolved in the future, asset of NPO is not reimbursed to her.

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NPO needs to donate its rest asset to Japanese government etc.

( Her NPO may pay all asset to its employees as salary, though )Linkedin2016,5,

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