Section 1. Incorporating Your Business
1.6 Closure of branch offices or subsidiary companies
1.6.1 Closure of a branch office
The following procedures must be completed to close a branch office. Creditors of the branch office must be given a period of no less than one month prior to the closure to submit objections to the closure of the branch office.
General flow of procedures for closing a branch office
1. Decision on branch office closure by foreign company
2. Call for creditors with objections to the branch office closure, on an individual basis and through a notice in official gazettes, to submit claims
3. Notification of tax agent to tax authorities
4. Ascertainment of residual property
5. Branch office closure (no sooner than one month after call/notice in 2. above)
6. Preparation of affidavit regarding closure of branch office
7. Attestation of affidavit by embassy consul
8. Application for registration of branch office closure with the Legal Affairs Bureau
9. Acquisition of certificate on registered closure information (about two weeks after registration application)
10. Notification of branch office closure to tax authorities, etc.
These procedures for closing a branch office must also be completed when upgrading a branch office to a subsidiary company. Because a branch office cannot be directly reorganized into a joint-stock corporation (Kabushiki-Kaisha (K.K.)) or a limited liability company (Godo-Kaisha (LLC)), the branch office closure procedures and the subsidiary company establishment procedures must be carried out simultaneously. In such instances, however, the branch office's assets may be passed on to the subsidiary through investment in kind.
1.6.2 Dissolution and liquidation of a subsidiary company
The following procedures must be completed when dissolving/liquidating a subsidiary company. Creditors of the subsidiary company must be given a period of no less than two months prior to the liquidation to submit objections to the liquidation of the subsidiary company. Should the subsidiary company have negative net assets, the corporation cannot independently complete the liquidation procedures below but instead must follow special liquidation procedures under the direction of a court.
General flow of procedures for dissolving/liquidating a subsidiary company
(Kabushiki-Kaisha (joint-stock corporation) / Godo-Kaisha (LLC))
1. Resolution at the general meeting of shareholders or equivalent on the dissolution of the subsidiary company and the appointment of a liquidator.
2. Application to the Legal Affairs Bureau for registration of the dissolution of the subsidiary company and the appointment of a liquidator
3. Notification to tax authorities of the dissolution of the subsidiary company and the appointment of a liquidator
4. Call for creditors with objections to liquidation of the subsidiary company, on an individual basis and through notices in official gazettes, to submit claims
5. Ascertainment and distribution of residual assets
6. Resolution approving conclusion of liquidation at the general meeting of shareholders or equivalent (no sooner than two months after the call and placement of notices in 4. above)
7. Application for registration of the completion of liquidation of the subsidiary company with the Legal Affairs Bureau
8. Acquisition of certificate on registered closure information (approx. two weeks after application for registration)
9. Notification of completion of liquidation of the subsidiary company to tax authorities, etc.
1.6.3 Dissolution and liquidation of limited liability partnerships
In the case of the dissolution or liquidation of an LLP, the following procedures must be followed. As in the case of the dissolution or liquidation of a Japanese corporation, it is necessary to provide a period of at least two months for creditors to lodge objections regarding liquidation.
General flow of procedures for dissolving or liquidating an LLP
1. Determination of dissolution and liquidator of LLP with approval of all members
2. Application to the Legal Affairs Bureau for dissolution and appointment of liquidator
3. Notification of tax authorities regarding dissolution and appointment of liquidator of LLP
4. Individual notification of objection of creditors to liquidation of LLP and announcement in official gazette
5. Determination and distribution of remaining assets
6. Determination of completion of liquidation with approval of all members (from two months after above notification)
7. Application to the Legal Affairs Bureau for registration of completion of liquidation of LLP
8. Acquisition of certificate of registered matters of closure (approx. two weeks after application for registration)
9. Notification of tax authorities, etc. regarding completion of liquidation of LLP
