Get the free Vol.07, June 2009 (PDF 290K) - yuasa-hara co

Jun 2009 vol.7 NASA ADHARA Business L Aw News CONTENTS OF THIS ISSUE Problems of Business Succession and Enforcement of the Law concerning the Succession of a Business in Small and Medium-Sized Enterprises

Since the 1970s, the problem of business succession has been addressed by an increasing number of authorities in different countries to promote the orderly development of small and medium-sized businesses without interference from family members and other sources of non-competent authority. This paper reviews the development of laws, regulations, policies, legislation and case law that are pertinent to the practice of business succession in small and medium-sized businesses throughout the world. Some important changes in business succession law that were made since the 1970s include: an increasing interest in law enforcement bodies in the issue of succession of businesses and the growing number of cases concerning succession that have been prosecuted or settled; changes in the legislation of the countries concerned. The Law of Succession of a Business. The law of succession of a business is governed by various statutes and regulations. Most countries have passed laws to facilitate succession of existing businesses, by means of either an outright transfer or the assignment of a portion of the business rights to a third person, in accordance with the pre-existing business law or the specific provisions of the legislation of the relevant country. In such cases, the ownership and financial resources of the surviving employer or successor employer may be transferred as a one-off transaction, allowing them to carry forward their business at a reduced risk of their failing. In some cases, the law provides for the granting of a limited or full guarantee for the future conduct of the business. Where transfer has not taken place and the business has been liquidated, the government may, in order to establish the legal framework for its liquidation, transfer legal liability for all obligations arising from the business to another party, with the right to a part of the assets acquired in the business. In Japan, where inheritance of the business is not affected by inheritance laws, it is not necessary to transfer any of the business assets to a successor employer. On the other hand, in the United Kingdom inheritance laws have to be interpreted to ensure that the succession of a small and medium business remains a viable alternative. The Succession of a Small and Medium-Sized Business to Another Small or Medium-Sized Business in the Community. If a small and medium- sized business has entered into a partnership relationship with another small or medium-sized business (notwithstanding the provisions of Article 13 of the Agreement on the European Economic Area), the successor company should have its business rights transferred to the successor company in the same way as the business of the partner is transferred.

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