You are currently viewing Dissolution of a Corporation and Fiscal Year in Japan

Dissolution of a Corporation and Fiscal Year in Japan

🌻Dissolution of a Corporation and Fiscal Year in Japan

Assume that you have been running a corporation in Japan and now you have decided to dissolve it.

If the corporation is dissolved, your company needs to file a tax return. In such a case, what is difficult to understand is the fiscal year(Kessanki=決算期).

When a corporation is dissolved, fiscal year is handled differently between a joint-stock company (Kabushiki Kaisha) and a limited liability company(Godo Kaisha).

Your joint stock company (fiscal year ends at the end of March) decides to dissolve it as of May 6, 2023.

From May 7, you will be the liquidator and will be responsible for the liquidation procedures of the company. You will specify the company’s remaining assets and liabilities, and prepare a balance sheet and other documents.

The balance sheet, etc. will then be approved at the general meeting of shareholders.

Your company will then use the assets to repay the liabilities and determine the amount of assets remaining in the company. Then, the shareholders approve the distribution of those assets to the shareholders.

In this way, your company completes the liquidation process on July 10, 2024.

In this case, the fiscal year is as below.

April 1, 2023 to May 6, 2023(解散事業年度)

May 7, 2023 to May 6, 2024 (the 1st fiscal year during liquidation proceedings)

May 7, 2024 to July 10, 2024 (the 2nd fiscal year during liquidation proceedings)

Thus, your Kabushiki Kaisha had a fiscal year ending at the end of March before the dissolution, but the resolution to dissolve the company will change the fiscal year from the current one.

🌸Your limited liability company (fiscal year ends at the end of March) has decided to dissolve as of May 6, 2023.

From May 7, you will be the liquidator and will be responsible for the liquidation procedures of the company.

You will specify the company’s remaining assets and liabilities, and prepare a balance sheet and other documents.

The balance sheet, etc. will then be approved at the general meeting of members(社員総会).

Your company will then use the assets to repay the liabilities and determine the amount of assets remaining in the company.

Then, a resolution is passed to distribute the assets to the members (Persons who are shareholders in the case of a stock company).

In this way, your company has completed the liquidation process as of July 10, 2024.

In this case, the fiscal year is as below.

April 1, 2023 to May 6, 2023

May 7, 2023 to March 31, 2024 (fiscal year during liquidation proceedings)

April 1, 2024 to July 10, 2024

In other words, in the case of a limited liability company, even after the company is dissolved, the provisions of the fiscal year (as stipulated in the articles of incorporation) remain valid.

You can also see Process of dissolution of a company in Japan

Dissolution, liquidation, and tax filing of a Japanese company in 2024

When you dissolve your company, you need to think carefully about the dissolution date and the fiscal year end.

Let’s assume that your limited liability company (whose fiscal year end is March 31 and is not a stock company) dissolves as of April 10, 2024.
In that case, from April 10, 2024, your company starts the liquidation process.

In the liquidation process, your company collects the accounts receivable and repays the creditors.

And you notify the creditors of your company’s dissolution individually.

Also, you need to publish a notice of your company’s dissolution in the official gazette (but you can proceed with the registration even if you don’t publish it).

And your company distributes the remaining assets to its equity holders.

Your company needs to file a tax return when it dissolves.

So, during the liquidation process, your company receives invoices from the tax accountant and makes payments.

From April 10, 2024 to June 10, 2024 (for a minimum of two months), your company checks if there are any objections from the creditors.

This is because the creditors of your company may object to your company’s dissolution. It may be because your company has not repaid them yet.

Your company needs to file tax returns for the following fiscal years.

The fiscal year ending on March 31, 2024

The fiscal year from April 1, 2024 to April 10, 2024

The fiscal year from April 11, 2024 to June 10, 2024 (liquidation period)

That means you need to file three tax returns.

And after June 10, 2024, your company can file for registration of completion of liquidation.


●Let’s assume that your company dissolves as of March 31, 2024.

Then, from April 1, 2024, your company starts the liquidation process.

During the liquidation process, your company receives invoices from the tax accountant and makes payments.

Your company needs to file tax returns for the fiscal year ending on March 31, 2024 and the liquidation period.

Therefore, the tax accountant needs to make two tax filings.

After the completion of the liquidation process, the balance of your company should be zero yen.

Then, after June 1, 2024, your company can file for registration of completion of liquidation.