August 8, 2022

An incorporated association is an organization (corporation) in which its members (employees) are united for a certain purpose, and whose corporate status is recognized by law and is the subject of rights and obligations (corporation).


An association is an organization that is composed of employees (members) and is legally granted legal status. An association that exists as an association but has not been granted legal status is called an association without legal capacity (an association without juridical person), and is distinguished from an incorporated association.


An employee in an incorporated association does not mean a company employee or an employee in general, Voting rights at general meetings of employees and shareholders Right to receive distribution of surplus Members who are entitled to one or more of the entitlements to the distribution of residual assets, ie, in the case of a joint-stock company, for example, the shareholders.


In the past, there were incorporated associations called ``incorporated associations'' established under Article 34 of the pre-revised Civil Code, and incorporated associations established under special laws. Due to the reform of the public interest corporation system, the incorporated association called 'incorporated association' ceased to exist. In addition, the former "incorporated association" survived as a special incorporated association until November 30, 2013 (Heisei 25).

Type of Incorporated Association

General Incorporated Association

It is a corporation that can be established if it meets certain requirements based on the Act on General Incorporated Associations and Incorporated Foundations, and it does not matter if the business purpose does not have a public interest. In principle, all businesses are subject to taxation, just like corporations. Unlike conventional incorporated associations, which require permission to establish, anyone can establish an association based on a rule-based system, without obtaining permission from the competent government office, as long as certain procedures and registrations are completed. Unlike for-profit corporations such as stock companies, articles of incorporation that give the founder the right to receive the distribution of surplus or residual assets are invalid (General Incorporated Associations and Incorporated Foundations Act, Article 11, Paragraph 2). A general incorporated association whose total amount of liabilities on the balance sheet at the end of the fiscal year is 20 billion yen or more is called a “large-scale general incorporated association” (Article 2 of the General Incorporated Associations and Incorporated Foundations Act) and has an accounting auditor. (Article 62 of the General Incorporated Associations/Incorporated Foundation Law). If it finds that the corporation cannot continue to exist in order to secure the public interest through its business, the court may order its dissolution upon petition by the Minister of Justice, employees, creditors, and other interested parties (general association・Incorporated Foundation Law, Article 261). Even if there is no business capital, it can be established by two or more employees, and after that, the employees can contribute funds to the fund for activities, or external contributions can be solicited (Article 10, Article 117 ). Contributors are obliged to return the fund upon request and agreement, and if the amount exceeds the amount of net assets on the balance sheet, the amount of contributions must be returned within the excess (Article 141 of the General Incorporated Associations/Incorporated Foundation Law). Funds for the activities of the project can be allocated from the operating profit of operating the fund. If the business for the public interest is considered to be a profitable business and a non-profitable business, and the latter accounts for more than 50%, it can become a public interest incorporated association after applying and being certified. Profits are taxed, and there is no difference with companies such as joint-stock companies. General incorporated associations that meet the requirements stipulated in Article 3 of the Corporate Tax Law Enforcement Ordinance are called "non-profit general incorporated associations."

Public Interest Incorporated Association

It is a general incorporated association established based on the General Incorporated Associations/Incorporated Foundation Act, which conducts public interest projects and is an incorporated association that has been certified as a public interest corporation by a government agency.