Q_iconAre there differences in the extent of liability of a company in Japan (subsidiary company), a branch office in Japan (branch office), and a representative office when lawsuits are filed against them?

A_dark_iconIt depends on the type of operation whether the foreign head office would be involved as well, or if the matter would be resolved within Japan.

★ Explanation ★

1. In the case of a subsidiary company

japan-buildingsIf suits are filed against a subsidiary company, the extent of liability naturally covers the subsidiary company itself; however, since the foreign company in the “home country” and the subsidiary company in Japan are considered separate entities, liability generally does not extend to the foreign company.

2. In the case of a branch office

For a branch office, since they are considered part of the foreign company, in the case that a suit is filed, the foreign company is also part of the extent of liability.

3. In the case of a representative office

The case for a representative office is a little more complicated. In the case that a lawsuit is filed, generally, the representative of the representative office is liable. However, if the foreign corporation itself is deemed to have some responsibility, the liability may extend to the foreign corporation.