Closure of Branches/Subsidiaries
Closure of branches and resignation of all representatives in Japan
There are two ways to close a branch: registration of branch closure or registration of resignation of all representatives in Japan.
The registration of a Japanese branch cannot be closed unless all representatives in Japan resign, as long as the representatives are registered in Japan, there is a possibility that business can continue. Conversely, a Japanese branch will be closed if all representatives in Japan resign.
In practice, it is common to only register the resignation of all representatives in Japan. To register the resignation of all representatives in Japan, it is usually necessary to complete the following steps. Creditors of the branch are given a period of at least one month to submit their claims before the closure.
General procedure for resignation of all representatives in Japan
All representatives in Japan decide to resign. Begin the resignation process and notify branch creditors of the objection period for resignation (usually more than one month).
After the objection period ends, register the resignation of all representatives in Japan. The closure of the branch is completed.
If a branch is to be upgraded to a subsidiary, the branch closure procedure must also be completed. Since a branch cannot be directly reorganized into a corporation or limited liability company, the branch closure and subsidiary establishment procedures must be completed simultaneously. In this case, the assets of the branch are transferred to the subsidiary through a type of investment.
When the resignation of all representatives in Japan is registered, the registration is closed without a closure date being entered.
Usually, it is sufficient to record the closure date in the declaration, but if a closure date is required for registration, both (1) branch closure (abolition) and (2) resignation of all representatives in Japan must be registered. If the representative's address in Japan is different from the location of the branch and is under the jurisdiction of the legal affairs bureau of a different region, a registration application similar to the office relocation registration may need to be submitted to the legal affairs bureau with jurisdiction over the representative's address.
When a subsidiary is abolished, a resolution is passed by the shareholders, followed by liquidation. The resolution for abolition must be passed at the shareholders' meeting and must clearly state the reason why the subsidiary cannot continue its business.
When the resolution for abolition is passed, the subsidiary is abolished and liquidation begins. Liquidation is a process that includes balance inquiries, debt collection, and asset sales. The funds obtained through liquidation are first paid to creditors, and the remaining amount is distributed to shareholders as dividends.
To abolish/liquidate a subsidiary, the following steps must be completed. Before the liquidation of the subsidiary, a claim submission period of at least two months is required for creditors...
