Liquidation, External Directors, Auditors

Securing a resident company director, statutory auditor, or statutory liquidator can be virtually effortless with SANSEI. Foreign capital-affiliated companies in Japan, during emergence or various operational stages, may require an external director. Sample circumstances are when a director is needed:

• who resides in Japan
• who does not require compensation tied to performance
• on interim while searching for a permanent managing director

Liquidation and Related Tasks

We appoint liquidators and handle the mandatory documentation for liquidation, including the administration of debts and credits. Under the direction of the client main office overseas, SANSEI serves as liaison between attorneys and auditors involved with the liquidation. We oversee and assist the assigned tax accountants with related tax and accounting tasks, create property inventories, and prepare the statement of assets and liabilities. Our office also handles bank account management and oversees the distribution of remaining assets.

The primary concern for ordinary liquidations is the avoidance of conditions where liabilities exceed assets. In avoidance thereof, we advise on and handle debt forgiveness processes for loans from the overseas head office or affiliated companies. For liquidations after October 1, 2010, and according to the amended Japan corporate tax code, accrued income from debt forgiveness will be subject to ordinary corporate tax. (Notably, such corporate tax was not levied for liquidations before September 30, 2010.)

Other compliance tasks for liquidation relate to obligations for proper bookkeeping as well as the retention of company documents for ten years following liquidation. Regarding document storage, SANSEI holds close affiliation with exchange-listed external warehousing companies. As such, we safely and economically store the statutory accounting materials. We also serve as agent in custody of the documents for the mandatory ten-year period following liquidation registration.

External Directorships

Takehiko Fukuoka, Representative of SANSEI Trust Tax and Accounting, can be appointed as external director or representative director for the client company in Japan. This offers a welcomed option compared to most past practices—when those appointed were limited to directors of subsidiaries of foreign capital-affiliated companies listed on overseas stock exchanges, or to managing directors or representatives of foreign capital-affiliated companies in Japan.

Such directorship option often proves indispensable when first establishing a presence in the Japanese market, during which period formal recruitment of the Japan representative(s) may not be complete. The SANSEI representative is also asked to serve in instances when the Japan company wishes to more quickly acquire its website domain, when the company wants to invest in domestic real estate, or as the company is established prior to plans for hiring staff. To note, the SANSEI representative will promptly withdraw directorship registration when company representatives are officially appointed.

SANSEI advises on directorship issues under Japan corporate tax law. For example, one notable advantage is that bonuses and other remuneration paid to a Japan country manager are not categorized as company officer income. Other frequent inquiries we receive concern directorship appointments for asset-recipient successor companies, or directorship issues when involving with investment vehicles.

We maintain custody of the corporate representative seal, and according to instructions from company headquarters affix the seal impression to official and other operational documents. And when Japan company address registration presents challenges, we are on hand in consultation.

Auditors and Accounting Participation

SANSEI performs as auditors in accounting processes for Japanese subsidiaries of global corporations. We audit accounts and records, and submit auditing reports in English and Japanese.