When the president changes in a business succession — how to handle directors' social and labor insurance

In short: When the president (representative) changes in a business succession, the company itself — the applicable workplace — continues, so directors' social insurance is reviewed person by person. There are three judgments: a person who newly becomes a director and receives remuneration acquires qualification; a person who leaves the company loses qualification; and a person whose remuneration changes is tested for an occasional revision (a monthly remuneration change notification). For labor insurance, you file a "notification of change of name, location, etc." for the representative's name change. Registration is the work of a judicial scrivener, the tax treatment of director remuneration that of a tax accountant, and share succession and family disputes that of an attorney.

When the representative or a director changes through succession within a family or by M&A, social and labor insurance are where the back office first stalls. The company's sign does not change, yet qualification and standard monthly remuneration move for individuals. This article organizes, from the viewpoint of a Shakai Hoken Roumushi, directors' social insurance (acquisition/loss of qualification and the monthly remuneration change notification tied to a change in remuneration) and the employer-change notification for labor insurance. It does not go into share succession or taxation itself.

When the representative changes, how does directors' social insurance change?

Insured status under social insurance (health insurance and employees' pension) is decided not per company but by whether that person is ordinarily employed at the applicable workplace and receives remuneration as compensation for labor. A director of a corporation (including a representative director) is an insured person if they receive remuneration from the corporation and are ordinarily employed, regardless of nationality. Because the company continues as the same applicable workplace even when the representative changes, what moves is the "person" side.

Situation	Social insurance treatment	Notification
Newly becomes a director and begins receiving remuneration	Acquisition	Insured-person qualification acquisition notification (within 5 days of the event)
Was already an insured director/employee; becomes representative and remuneration changes	Qualification continues; the change tested for occasional revision	Monthly remuneration change notification if applicable
Retires from the directorship and leaves the company	Loss	Insured-person qualification loss notification (within 5 days)
Remains a director but remuneration falls sharply / becomes zero	Judged by the actual employment relationship	Loss or change notification depending on the case

The point is that if a successor who is already insured simply becomes representative, no new acquisition arises. What matters then is the change in remuneration — the occasional revision. To check the whole picture of application right after establishing a company, see what to file and by when after you set up a company.

When you change director remuneration, when do you file the monthly change notification?

A revision of director remuneration is, for social insurance, a "change in fixed wages." An occasional revision (Article 43 of the Health Insurance Act, Article 23 of the Employees' Pension Insurance Act) is made when all of the following are met:

• There is a change in fixed wages (an increase or decrease in director remuneration counts).
• The standard monthly remuneration calculated from the average of the three consecutive months from the month of change differs by two grades or more from the previous grade.
• The payment basis days are 17 or more in each of those three months.

When the three are met, the standard monthly remuneration is revised in the fourth month counting from the month of change. The employer files the "insured-person monthly remuneration change notification" with the Japan Pension Service promptly once it is fixed. This is a different rule from the regular decision each July (Article 41 of the Health Insurance Act, Article 21 of the Employees' Pension Insurance Act); the difference is set out in how the regular base notification and the monthly change notification differ.

Note that director remuneration is subject to timing limits as "regular fixed-amount salary" for tax purposes. That is a tax matter about deductibility and is a different timing and a different rule from the social-insurance occasional revision. Confirm the tax-side timing with a tax accountant.

What notifications are required for the employer change in labor insurance?

Even when the representative changes, the company's labor insurance (workers' accident and employment insurance) application itself does not change. However, because the representative's name — a notified item — changes, a change notification is required.

Notification	Filed with	Deadline
Labor insurance notification of change of name, location, etc.	Labor Standards Inspection Office	Within 10 days from the day after the change
Employment insurance employer/workplace change notification	Hello Work	Within 10 days from the day after the change

Directors are not workers, so in principle they do not become insured under workers' accident or employment insurance (a change of representative does not move employees' employment insurance). However, a director concurrently serving as an employee with the character of a worker may be an employment-insurance insured person. The line for who is a worker is also touched on in three places people stumble when making a family member an employee.

How is the former representative's loss of qualification handled when they leave the directorship?

Whether the former representative fully leaves the company or remains as chairman or adviser divides the social-insurance treatment.

• Fully retires and leaves the company: file the qualification loss notification (within 5 days) and handle the collection/guidance on health-insurance qualification confirmation (My Number insurance card / qualification confirmation certificate). See My Number card and the qualification confirmation certificate.
• Remains as chairman or advisor and continues to receive remuneration: the employment relationship continues, so insured status continues. If remuneration falls, it may be subject to an occasional revision.
• Keeps the title but becomes unpaid: with no remuneration as compensation for labor, they may lose insured status. It is judged by the actual remuneration and employment relationship, not the title.

Succession on the president's death has a different trigger for loss of qualification. It must be considered separately from a change while alive; see salary and social insurance when the president passes away, and for a sole proprietorship, succession and labor matters when a sole proprietor passes away. Retirement allowances and share buybacks are separate issues from social insurance.

Have a question about your situation?

Tell us about your social insurance, payroll or employment enquiry.

Chat on LINEContact us

Who should handle registration, tax, and share succession?

The procedures for a change of representative are divided by qualification. Each becomes a separate contract.

What to do	Main person in charge
Directors' acquisition/loss of social insurance, the monthly change notification for remuneration changes, labor-insurance change notifications, payroll	Shakai Hoken Roumushi (our office)
Registration of change of director / representative director	Judicial scrivener
Tax matters such as regular fixed-amount salary and deductibility of director remuneration	Tax accountant
Share succession, class shares, statutory reserved portions, family disputes	Attorney
Succession/change notifications for permits (construction, transport, etc.)	Gyoseishoshi

Labor due diligence in an M&A (surfacing unpaid overtime and non-enrollment in social insurance) is organized in labor and social insurance in business succession and M&A. Where permit succession is involved, we can connect you to 四葉行政書士事務所, but 四葉行政書士事務所 is a separate, independent entity from our office, and the Shakai Hoken Roumushi work and the Gyoseishoshi work are contracted separately (we do not take on both under one engagement). Our office does not receive referral fees.

四葉社会保険労務士事務所 can advise on directors' acquisition/loss of social insurance, monthly change notifications, employer-change notifications for labor insurance, payroll, and maintaining work rules. Consultation is free, and fees are summarized in the fee schedule.

Frequently asked questions

Q. Our successor was already enrolled in social insurance as an employee. Is an acquisition procedure needed when they become representative?
A. If a person who was already an insured person at the same company's applicable workplace simply becomes representative, no new acquisition notification is needed. What matters is the change in remuneration; if director remuneration rises on appointment and the three-month average produces a difference of two grades or more in the standard monthly remuneration, file a monthly change notification as an occasional revision.

Q. If we raise director remuneration, when do social insurance premiums change?
A. If there is a change in fixed wages, the three-month average produces a difference of two grades or more, and the payment basis days are 17 or more in each month, the standard monthly remuneration is revised in the fourth month counting from the month of change. This differs from the timing of "regular fixed-amount salary" for tax, so social insurance and tax may fall on different timings.

Q. When the representative changes, do we file anything for employment or workers' accident insurance?
A. The company's labor insurance application does not change, but because the representative's name changes you file a "notification of change of name, location, etc." with the Labor Standards Inspection Office and an "employer/workplace change notification" with Hello Work, each within 10 days from the day after the change. Employees' employment insurance qualification does not move on a change of representative.

Q. The former president remains as unpaid chairman. What happens to social insurance?
A. If there is no remuneration as compensation for labor, they may not be regarded as ordinarily employed and may lose insured status. It is judged by the actual remuneration and employment relationship, not whether a title remains. If they remain with reduced remuneration, it may be subject to an occasional revision.

Sources

• Insured status under social insurance: a person ordinarily employed at an applicable workplace is insured regardless of nationality; a director of a corporation is insured if they receive remuneration as compensation for labor and are ordinarily employed (Health Insurance Act, Employees' Pension Insurance Act; Japan Pension Service).
• Qualification acquisition/loss notifications: filed with the Japan Pension Service within 5 days of the event (Health Insurance Act, Employees' Pension Insurance Act and their enforcement regulations).
• Occasional revision of standard monthly remuneration: when there is a change in fixed wages, the three-month average produces a difference of two grades or more from the previous standard monthly remuneration, and the payment basis days are 17 or more in each of the three months, the amount is revised in the fourth month counting from the month of change (Article 43 of the Health Insurance Act, Article 23 of the Employees' Pension Insurance Act; Japan Pension Service, "Occasional revision (monthly remuneration change notification)", accessed 15 September 2026).
• Regular decision: the standard monthly remuneration is decided each July (Article 41 of the Health Insurance Act, Article 21 of the Employees' Pension Insurance Act).
• Labor insurance notification of change of name, location, etc.: filed with the Labor Standards Inspection Office within 10 days from the day after a change to the business name, location, representative, etc.; employment insurance is filed with Hello Work as an employer/workplace change notification (Act on Collection of Labor Insurance Premiums and its enforcement regulations).
• The regular fixed-amount salary and deductibility of director remuneration are tax matters and are a different rule from the social-insurance occasional revision; the tax judgment is the work of a tax accountant and is not covered here.
• Business of a Shakai Hoken Roumushi: Article 2 of the Certified Social Insurance and Labor Consultant Act.

This article does not decide whom to consult. 四葉社会保険労務士事務所 can advise on directors' acquisition/loss of social insurance, monthly change notifications, employer-change notifications for labor insurance, payroll, and maintaining work rules. Registration of a change of director/representative director is the work of a judicial scrivener, the taxation of director remuneration that of a tax accountant, share succession and family disputes that of an attorney, and the succession/change of permits that of a Gyoseishoshi. The Shakai Hoken Roumushi work and the Gyoseishoshi work are contracted separately as separate, independent entities. Our office does not receive referral fees. The final decision on whether an individual case involves acquisition/loss of qualification or an occasional revision is made by the pension office and the Japan Pension Service. For fees when consulting 四葉社会保険労務士事務所, see the fee schedule; for frequently asked questions, see the FAQ.

This article is general information. Individual judgments, such as directors' acquisition/loss of qualification and the application of an occasional revision, are made by a qualified professional after a consultation, in light of the latest primary sources (the Japan Pension Service, the Ministry of Health, Labour and Welfare, etc.) and individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).