Foreign entrepreneurs who hold Japanese residence permits are allowed to start small businesses under the form of sole proprietorships. This type of structure is available for those who want to set up one-man businesses. When the company starts to make more profits, the investor should consider changing the company type. It is quite common for sole traders to turn into limited liability companies in Japan.
There is no direct way of changing a sole proprietorship into an LLC in Japan, as the sole trader must first de-register from the Companies Registrar and then have the LLC incorporated.
Our company formation agents in Japan can guide those who want to change sole proprietorships into LLCs.
In order to be turned into an LLC, a Japanese sole proprietorship must first be closed down. The owner is required to file an application with the Trade Register through which the cessation of the sole trader’s activities. The sole proprietorship must also de-register for taxation and social security and insurance with the tax authorities in Japan.
Our company registration consultants in Japan can help foreign investors who want to open or close sole proprietorships in this country.
Considering the sole trader is a simpler business form than the Japanese limited liability company, the registration of the LLC will imply preparing more documents for incorporating it.
The steps to be completed when changing a sole trader into an LLC in Japan in the last phase will imply:
The LLC is allowed to keep the assets of the sole proprietorship in Japan.
For detailed information on the procedure of changing a sole trader into an LLC, please contact our Japanese company formation advisors. We can also help you set up a company in Japan.