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💴 | 7 advantages and 3 disadvantages of establishing a limited liability company


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7 advantages and 3 disadvantages of establishing a limited liability company

 
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An easy-to-understand explanation of the requirements and the mechanism of special cases (https://www.zeiri4.com/c_6/c_1072/h_960/) Should I consult with a tax accountant for business succession?
 

Among the current corporate forms in Japan, "Godo Kaisha" has been adopted by well-known companies these days, and many of you know it ... → Continue reading

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Business succession

Business successionWhat is (Jigyo Shokei)?Company OfManagement rights,Philosophy,Asset,liabilitiesEverything about the business, includingManagementRefers to taking over to.

In Japan2010 eraAnd later中小企业Because of concerns about business continuity, this term isSmall Business AdministrationIs to be used by[1].

The main successors are generally the following three (SME White Paper 2019 Edition --Small and Medium Business Administration (see Chapter 1, Section 2, Paragraph 1).

  • Succession within relatives.
  • Succession of officers and employees (outside relatives).
  • External succession ( etc).

Environment surrounding business succession

In the near future, the average retirement age of business owners over 70 will reach about 245 million, and about half of them, 127 million, have not decided on a successor and are making a profit. However, it is said that the era of major business closures will come.Due to its influence2025 In the cumulative total of 10 years, about 650 million jobs have been lost, and about 22 trillion yen.GDPIs expected to be lost[2].

In addition,Japan Finance CorporationResearch Institute2016 According to a survey conducted in Japan, about half of business owners over the age of 60 say they plan to close their business.The most common response was "I was thinking of quitting on my own behalf from the beginning" at 38%, followed by "No successor to relatives" at 29% and "There is no future in the business" at 28%. ing.However, 3% of these companies answered that they are "performing better than other companies in the same industry", and 10% of the business outlook for the next 4 years answered that "at least the status quo can be maintained". It can be seen that there is a tendency to choose to close the business despite the good performance.[3].

Business succession steps

Generally the following steps[4].

  • Recognizing the need for preparation for business succession
  • Understanding (visualization) of business conditions, management issues, etc.
  • In the case of relatives or in-house succession, management improvement (polishing) for business succession.In the case of external succession, matching will be carried out
  • In the case of relatives or in-house succession, formulate a business succession plan.In the case of external succession, M & A will be executed
  • Execution of business succession
  • Post business succession (growth, development)

Period required for business succession

The overall succession period is "less than 1 year: 55.1%", "1 to 2 years: 27.9%", "3 to 4 years: 8.5%", "5 years or more: 8.5%". In many cases, it takes a long time from preparation to execution.[2].

Succession destination of business succession chooser

Each ratio for each successor is as follows[2].

  • Inheritance within relatives: 55.4%
  • Succession of officers and employees (outside relatives): 19.1%
  • External succession: 16.5%

Changes in the environment surrounding business succession

Since external succession has attracted attention, the business succession support center, which is a public institution, and major private companiesJapan M & A CenterAndstrike-M & A Capital PartnersBusiness succession through intermediary companies such as is increasing.On the other hand, xTRANBI,BATONZM & A matching services that match transferors and transferees online have also appeared, and the environment for handling various businesses from small businesses to large businesses is accelerating.Banks, securities companies, insurance companies, etc. have also started to enter the M & A intermediary business both offline and online.[5].

Also, on October 2020, 3,Ministry of Economy, Trade and IndustrySmall Business AdministrationBy a review committee led bySmall and medium-sized M & A guidelinesHas been released.

footnote

  1. ^ In the 2011 edition of the White Paper on Small and Medium Enterprises, the term "business takeover" was mentioned (SME White Paper 2011 Edition --Small and Medium Business Administration (see Part 2, Chapter 2, Section 2, Paragraph 1). In the 2013 edition, a chapter is devoted to detailing "passing on to the next generation (business succession)" (SME White Paper 2013 Edition --Small and Medium Business Administration (see Chapter 2 of Part 3)), which has been mentioned in some form in the annual white paper since then.
  2. ^ a b c "SME White Paper 2019 Edition". Small Business Administration. NovemberBrowse.[Page number required]
  3. ^ "Outline of "Internet Survey on Business Succession of SMEs"”. Japan Finance Corporation Research Institute. NovemberBrowse.
  4. ^ "Business succession guidelines". Small Business Administration. NovemberBrowse., P.20
  5. ^ "About the current situation and issues regarding business succession”. Small and Medium Business Administration. NovemberBrowse.

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