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Cabinet Decision on the Bill for the Act on Facilitation of Business Succession

On March 27, 2015, the Cabinet decided to approve the Bill for the Partial Revision of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises and Other Acts (Bill for the Act on Facilitation of Business Succession). In response, the bill was submitted to the 189th ordinary session of the Diet.

1. Purpose of the bill

To take steps to realize the measures for facilitating business succession, which is stipulated in the Basic Act for Small and Medium Sized Enterprises and other acts, a bill for the partial revision of three acts, namely, the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises (Act No. 33 of 2008), the Small Enterprise Mutual Relief Projects Act (Act No. 57 of 1965), and the Act on the Organization for Small and Medium Enterprises and Regional Innovation, Japan, Independent Administrative Agency (Act No. 147 of 2002), will be submitted to the 189th ordinary session of the Diet.

2. Outline of the bill

1) Partial revision of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises

  1. Revising the special arrangement on the reserved portion so as to expand the scope of the right of inheritance for the portion to cover non-relatives
    Concerning the special arrangement on the reserved portion under which a claimant for the legally reserved portion is limited to relatives of the decedent,* the scope of the revised act is to be expanded to cover business successions by non-relatives

    *Note: Under this special arrangement, a successor who has received shares of the business from the decedent is able to independently submit a request to the family court for a final legal decision on renunciation of the legally reserved portion if the successor reaches an agreement with other relatives and is authorized by the METI Minister for being in conformity with the requirements in advance.

  2. Enhancing the functions of SMRJ, in supporting business succession of SMEs
    The revised act is to stipulate a provision under which the Organization for Small and Medium Enterprises and Regional Innovation, JAPAN (SMRJ), will be able to provide support including necessary advice to business owners, business successors, and others, so as to encourage a more systematic process of business succession.

2) Partial revision of the Small Enterprise Mutual Relief Projects Act

The revised act is to review the Small Enterprise Mutual Relief Projects under which individual business operators and the board members of companies lay aside reserve funds for the stability of lifestyle in the case of closing a business or entering retirement. This project is conducted by SMRJ.

  1. Facilitating the smooth business succession of small enterprises
    The revised act is to increase the amount of mutual aid money when individual business operators have leave businesses to their relatives or when board members at 65 years of age or older have retired, thereby facilitating the business succession of small enterprises.
  2. Allowing small enterprises to flexibly change the premium of mutual relief in accordance with their business conditions
    The revised act is to allow small enterprises to flexibly change the premium of mutual relief so as to make Small Enterprise Mutual Relief Projects more user-friendly.

3) Partial revision of the Act on the Organization for Small and Medium Enterprises and Regional Innovation, Japan, Independent Administrative Agency

  1. Enhancing the functions of SMRJ, in supporting business succession of SMEs (reposted)
  2. Abolishing the commissioning to financial institutions by SMRJ, of the service concerning the application fee system under the Small Enterprise Mutual Relief Projects
    The revised act is to abolish the system under which small enterprises pay an application fee when joining the mutual relief projects, from the viewpoint of streamlining the procedures concerning the projects.

3. Effective date

The date specified by a Cabinet Order within a period not exceeding one year from the date of the promulgation.

Release date

March 27, 2015

Divisions in charge

  • Information in general
    Policy Planning Division, Business Environment Department, Small and Medium Enterprise Agency
  • Information on the Partial Revision of the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises
    Corporate Finance and Tax Affairs Division, Business Environment Department, Small and Medium Enterprise Agency
  • Information on the Partial Revision of the Small Enterprise Mutual Relief Projects Act
    Small Enterprise Division, Business Support Department, Small and Medium Enterprise Agency
  • Information on the Partial Revision of the Act on the Organization for Small & Medium Enterprises and Regional Innovation, Japan, Independent Administrative Agency
    Commissioner's Secretariat, Small and Medium Enterprise Agency
Ministry of Economy, Trade and Industry
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