Tokumei kumiai
Encyclopedia
, literally "anonymous partnerships," are a Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

ese bilateral contract governed by the Commercial Code of Japan, Article 535 et seq. In English, they are often called TK or silent partnerships. In many respects they are similar to common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

 limited partnership
Limited partnership
A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners . It is a partnership in which only one partner is required to be a general partner.The GPs are, in all major respects,...

s.

In a tokumei kumiai arrangement, invest in a venture operated by a .

By law, the partnership itself has no legal personality. Any assets of the partnership are the property of the manager; however, the anonymous partners have a right to a share of any profits from the venture, as provided in the partnership agreement. Anonymous partners have limited liability
Limited liability
Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...

for the partnership's debts, on the condition that they are anonymous. If an anonymous partner allows their name to be used in the name of the manager or in the name of the partnership, the anonymous partner loses their limited liability.

Tokumei kumiai are often used for investment funds. A structure known as the "Dutch TK" was once popular among foreign investors in Japan, as it was possible to recognize income from Japan through a Dutch anonymous partner in a tokumei kumiai without paying Japanese income or withholding taxes under the tax treaty of 1970. This loophole was closed by a new tax treaty in August 2010, which imposes a 20% withholding tax on distributions through such structures.
The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK