[Research Report] 30% of New Companies are Limited Liability Companies; Analysis of Corporate Number Data for Approximately 5.8 Million Corporations Nationwide

Compalyze Inc. (Headquarters: Shiga Prefecture, Kusatsu City, CEO: Takashi Suzuki), which operates the corporate database "Compalyze," conducted a survey on the establishment, continuation, and organizational changes of approximately 5.8 million registered corporations nationwide, based on public data from the National Tax Agency's corporate numbers.

The results showed that the proportion of limited liability companies (Godo Kaisha) among newly established companies of the five types (stock companies, limited liability companies, limited partnerships, general partnerships, and unlimited partnerships) has increased from 19.6% in 2016 to 30.7% in 2025. Currently, nearly one in three newly registered companies is a limited liability company.

Request for Data Citation

When quoting or using this survey data, please cite the following URL and source:

URL: https://compalyze.co.jp/journal/company-types-goudou-trend

Source: 30% of New Companies are Limited Liability Companies - The "Entrance" to Companies Diverges from Stock Companies

Survey Summary

The proportion of limited liability companies among newly established companies of the five types has risen from 19.6% in 2016 to 30.7% in 2025. The number of new establishments has increased from approximately 23,000 to approximately 45,000, nearly doubling in 10 years.

Among companies with known employee numbers, approximately 98% of limited liability companies have 10 or fewer employees. Compared to 77% of stock companies, they tend to be established as smaller corporations. On the other hand, there are 32 limited liability companies with over 1,000 employees.

Regarding organizational changes of legal entities, there have been approximately 11,000 conversions from limited liability companies to stock companies in the past 10 years. The reverse direction accounts for about 600 cases, a difference of about 20 times.

Limited companies (Yugen Kaisha), which can no longer be newly established for about 20 years, still number approximately 1.43 million on record.

Approximately 30% of New Companies are Limited Liability Companies

When new companies were aggregated by year from the corporate number data, the number of newly established limited liability companies nearly doubled from approximately 23,000 in 2016 to approximately 45,000 in 2025. While the number of new establishments for the five types of companies has increased by about 30,000 over the past 10 years, much of this increase can be attributed to limited liability companies.

While the number of newly established stock companies has remained around 90,000 to 100,000 per year, limited liability companies are supporting the growth of new companies. The background to this is the "low" cost of establishing and operating limited liability companies.

Limited liability companies do not require notarization of articles of incorporation, have lower registration and license taxes than stock companies, and have no obligation for public notice of financial statements or general meetings of shareholders/board of directors. These institutional features are considered factors that make them a preferred choice for small businesses and those transitioning from sole proprietorships to corporations.

"Start with a Limited Liability Company, and Convert to a Stock Company as Needed"

The legal entity chosen at the time of company establishment is not necessarily fixed. When organizational changes, where the legal entity was changed while maintaining the same corporate number, were aggregated, a clear bias was observed in the direction of change.

In the past 10 years, there were approximately 11,000 organizational changes from limited liability companies to stock companies. On the other hand, organizational changes from stock companies to limited liability companies were limited to about 600 cases, a difference of about 20 times.

Furthermore, organizational changes from limited liability companies to stock companies have increased from 568 cases in 2016 to 1,748 cases in 2025.

From this, it is thought that limited liability companies are becoming established not simply as a replacement for stock companies, but as the "initial vessel" chosen in the early stages of business.

*This release only includes the main points. Details on employee size, industry, regional disparities, concentration in Tokyo, cases of thousands of registrations at a single address, the reality of 1.43 million limited companies, and all data and calculation methods are published in an article on Compalyze Journal.

Limited Liability Companies are Expanding as an "Entrance" to Company Establishment, Not as a "Substitute" for Stock Companies

What emerges from this survey is not a simple picture of "stock companies being replaced by limited liability companies." For companies aiming for listing or large-scale fundraising, stock companies continue to be the preferred choice.

On the other hand, for those who want to have a legal entity first, those transitioning from sole proprietorships to corporations, and those planning for small-scale business operations, limited liability companies are expanding as an option.

In other words, it can be summarized that two entrances to company establishment in Japan are diverging: stock companies and limited liability companies. On the other hand, limited liability companies have no obligation for public notice of financial statements. The spread of limited liability companies is not only a diversification of corporate forms but also an issue related to how corporate information is viewed and its transparency.

▶Details of all data, methodologies, and company-specific information can be found here

30% of New Companies are Limited Liability Companies - The "Entrance" to Companies Diverges from Stock Companies

Survey Overview

Survey Subject

Compalyze Inc.

Survey Target

All registered corporations nationwide (approx. 5.8 million) based on the National Tax Agency's Corporate Number Public Data. New establishment aggregation targets the five types of companies (stock, limited liability, limited, general, unlimited).

Aggregation Period

Annual trend of new establishments from 2016 to 2025 (since the corporate number system started in October 2015, full-year tracking is possible from 2016 onwards).

Data

Corporate Number Data (establishment, corporate type, location), organizational changes of registration, and supplementary information on business content and employee size for companies identified by Compalyze.

Methodology

New establishments, continuations, and organizational changes were aggregated by corporate type code. Proportions are based on the five types of companies as the denominator (the denominator differs from the total new corporations in private surveys including general incorporated associations, NPOs, etc.).

Points to Note

"Number of registered continuations" includes dormant companies and does not represent the number of active companies. Proportions of employee size and industry are trend values based on companies for which data was available and may differ from the overall picture.

About Compalyze

Compalyze is a corporate database that integrates public data such as registration, financial statement notices, intellectual property, officers, and public procurement on a full-scale basis to support decision-making for corporate analysis, sales, investment, and M&A. (https://compalyze.co.jp)

Inquiries Regarding This Release

Compalyze Public Relations Email: info@compalyze.jp URL: https://compalyze.co.jp High-resolution images for press use are available (please contact us).