business succession of sole proprietors

The government greatly simplifies the procedures for business succession by sole proprietors.

Currently it is necessary to conduct a new start-up procedure other than inheritance due to death in many industries. The government will summarize the reform plan in the middle of 2019, ​the government will allow the current law to be handed over to the new sole proprietors without new permission and approval as well as to inherit it. ​The Government aims to cover not only children, but also business succession to third parties such as relatives such as grandchildren and brothers and employees.  

In the current system, in food and beverage industry, liquor retailing business, cleaning industry, hotel industry and beauty care business are inheritance, in principle, submit one application form and several related documents to the national government and municipalities to take over the business. ​However, if the former sole proprietors takes over in the lifetime, new sole proprietors will open up new business after the previous proprietors has left the business.

For example, in the inheritance of a restaurant business, in principle, the heir will inherit the business in accordance with the application form and family register certificate. However, in the succession to live, submission of a business license application form and arrangement map of sales facilities, inspection by the public health center and application fee fee will be required. It takes time to be permitted even after the inspection, sometimes being obliged to be closed.

Same as Hotel industry, if new sole proprietors apply hotel license, start new business after purchase Hotel, Ryokan or Guesthouse, it will require to apply new license again, will take approximately 2 months and hotel will not be able to run during this period.

After reform of plan in middle of 2019, after the enforcement of this Act, it may easy to start new business by new solo proprietors.

However, in parallel, in hotel business, we still need to check new Act will include business succession by property by property, or all properties by solo proprietor.  We support M&A, purchase business with license, establish new business and company in Japan.

Sincerely,
Ken Hayashi