When the estate includes non-listed shares of a family company: how to run the division

In short: the non-listed shares of a family company that the deceased held are estate property and subject to estate division. When there are several heirs, until the division is settled the shares are held in co-ownership by all heirs (Civil Code Articles 898 and 264), and rights toward the company cannot be exercised unless one person is designated as the rights-exercising holder and notified (Companies Act Article 106). In the division, non-listed shares have no market price, so valuations easily differ among heirs, and concentrating shares in a successor takes devices such as compensatory division. An administrative scrivener supports confirming the heirs and the family relationship and preparing the estate-division agreement. Share valuation and inheritance-tax filing are for a tax accountant, the inheritance registration of any real estate for a judicial scrivener, and, where it does not settle and goes to mediation or adjudication, an attorney—each contracted separately as an independent business. This article is general information and does not decide any individual valuation or division.

Until division is complete, who handles the company's shares and how?

When there are several heirs, the estate is held in their co-ownership (Civil Code Article 898, paragraph 1). By the amendment effective 1 April 2023 (Reiwa 5), it was made explicit that where the provisions on co-ownership apply to the estate, the co-ownership shares of each heir are calculated by the statutory or designated shares under Articles 900 to 902 (Civil Code Article 898, paragraph 2). Shares are the same: until division is settled they are in co-ownership by all heirs (Civil Code Article 264), and each co-heir succeeds to rights and obligations in proportion to their share (Civil Code Article 899).

To exercise rights toward the company (such as voting rights) over co-owned shares, the co-owners must designate one person to exercise the rights and notify the company of their name. Without that notice the rights cannot be exercised, unless the company consents (Companies Act Article 106). Who becomes this rights-exercising holder may be decided by a majority of the co-ownership shares (Supreme Court judgment of 28 January 1997). The exercise of voting rights over co-owned shares is itself, as an act of management of the shares, decided by a majority of the co-owners' shares by value under the main text of Civil Code Article 252 (Supreme Court judgment of 19 February 2015). Even if the company consents under the proviso of Companies Act Article 106, the case law is that it is not a lawful exercise of rights unless it follows the Civil Code's co-ownership provisions.

Situation	Who decides	Basis
Co-ownership share before division	The statutory or designated shares	Civil Code Article 898(2) and Articles 900 to 902
Designation of the rights-exercising holder	A majority of the co-ownership shares	Companies Act Article 106 / Supreme Court, 28 Jan 1997
Content of exercising voting rights	A majority of the shares by value (act of management)	Civil Code Article 252 main text / Supreme Court, 19 Feb 2015

In other words, even if the successor wants to run the company alone, until division is settled they may not be able to become the rights-exercising holder without a majority agreement; to avoid a gap in management, settling the division early is important.

Why do heirs' valuations of non-listed shares differ?

Unlike listed shares, non-listed shares have no market price. For inheritance-tax calculation, based on the Basic Property Valuation Circular (valuation of shares with no market price), the method is chosen according to the company's size and the shareholder's position. National Tax Agency Tax Answer No. 4638, "Valuation of shares with no market price," sets out the following methods.

Valuation method	Mainly used when
Comparable-industry method	Large companies, etc.; valued by comparing dividends, profits and net assets with listed companies in the same industry
Net-asset-value method	Small companies, etc.; valued by restating assets and liabilities at inheritance-tax values
Dividend-capitalisation method	A special method for minority shareholders other than family shareholders, valued from dividends

Even for the same company's shares, the method differs depending on whether the shareholder is a family shareholder who can sway management or a minority shareholder, and the value differs greatly. Moreover, the valuation used for the inheritance-tax filing (the circular value) and the idea of "fair value" that heirs use as a premise when discussing how to divide differ in purpose and do not necessarily match. This is the main reason heirs' perceptions of "how much are the shares" differ. Share valuation and inheritance-tax filing are the work of a tax accountant, contracted separately as an independent business. Our office does not calculate valuations or judge tax amounts.

What division methods concentrate shares in the successor?

Concentrating shares in the successor while dividing fairly among the other heirs—to strike this balance there are several methods (Civil Code Article 906 provides that division considers the kind and nature of the property and the circumstances of each heir).

Division method	Content	Fit with concentrating shares
In-kind division	Distribute property as it is to each heir	Effective where you can allocate shares to the successor and real estate/deposits to the others
Compensatory division	Some heirs take property and pay money etc. to the others	The form where the successor takes all the shares and pays compensation to the others is often used
Conversion division	Sell property and divide the money	A poor fit with keeping shares with the successor
Keep in co-ownership	Do not divide; continue co-ownership	Needs a designated rights holder; management decisions tend to stall

To concentrate shares in the successor, an arrangement where the successor takes the shares by compensatory division and pays compensation to the other heirs is often used. You also need to consider securing the source of the compensation (own funds, life-insurance proceeds, etc.) and the statutory reserved portion. Which method suits depends on the makeup of the property, the heirs' relationships and the tax burden; the tax side is with a tax accountant and any adjustment that is contentious with an attorney, each contracted separately.

How much do you write about shares in the division agreement?

The estate-division agreement is a document of the content all heirs agreed on for the division. For non-listed shares, write the company and the shares concretely so they can be identified in the later name-change and tax filing. General points are as follows.

• The issuing company's trade name and head-office location (to distinguish it from a same-named company)
• The kind of shares (ordinary or class shares) and the number of shares
• The name of the heir who takes them
• For compensatory division, the amount, due date and method of the compensation

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All heirs sign, affix their registered seals and attach seal certificates, as with other estate property. Preparation of the estate-division agreement can be supported within the scope of administrative-scrivener work. For a general way of preparing one, see also Can you make an estate-division agreement yourself? Required documents and drafting points. Inheritance registration where the estate includes real estate is the work of a judicial scrivener; see The flow of inheritance registration and ask a judicial scrivener separately from our office.

After agreement, who does the share-register rewrite and the tax filing?

Even after the division is settled, that alone does not change the company's shareholder register. In a non-listed company, the heir who took the shares requests the issuing company to rewrite the name in the shareholder register (Companies Act Article 133). For acquisition by general succession such as inheritance, there is a treatment allowing the acquirer to request the rewrite alone (Companies Act Article 133, paragraph 2, and Article 22 of the Ordinance for Enforcement of the Companies Act). Without the rewrite, you cannot assert to the company or other third parties that you are a shareholder (Companies Act Article 130, paragraph 1). Because the shareholder register is kept by the company, confirm the procedure and required documents with the issuing company.

Where an inheritance-tax filing is needed, a tax accountant handles it, including the share valuation. For the whole picture of inheritance-tax filing and payment, see National Tax Agency Tax Answer No. 4205, "Filing and payment of inheritance tax." Our office does not give tax advice or calculate tax. For consultation on selling or using inherited real estate, please contact the inheritance real estate desk of Yotsuba Real Estate Co., Ltd., a separate business. For the whole picture of inheritance procedures, see Inheritance procedures guide; for the flow of engagement, Engagement Flow; and for fees, Fee Schedule.

Who should you ask for confirming heirs, the agreement, valuation, registration and disputes?

Inheritance involving non-listed shares crosses several fields of expertise. The roles divide as follows.

• Confirming the heirs and family relationship, and support for preparing the estate-division agreement → Yotsuba Administrative Scrivener Office (administrative scrivener)
• Valuation of non-listed shares, and inheritance-tax filing and payment → a tax accountant
• Inheritance registration where the estate includes real estate → a judicial scrivener
• Rewriting the shareholder register, and receiving the notice designating the rights-exercising holder → the issuing company
• Where it does not settle and goes to mediation or adjudication, and individual legal judgement on rights, obligations and disputes → an attorney
• Sale or use of inherited real estate → Yotsuba Real Estate Co., Ltd.

Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses. Our office handles confirming the family relationship and supporting the agreement as an independent business, and valuation, tax, registration and dispute resolution are contracted separately with each qualified professional. Our office receives no referral fee.

FAQ

Q. Before division is settled, can the successor alone exercise voting rights at the general meeting?
A. Co-owned shares cannot have their rights exercised unless one person is designated as the rights-exercising holder and the company is notified (Companies Act Article 106). Designating the holder is decided by a majority of the co-ownership shares (Supreme Court, 28 Jan 1997), and the content of exercising voting rights by a majority of the shares by value (Supreme Court, 19 Feb 2015). Individual merits can become contentious; consult an attorney separately as an independent business.

Q. Must we decide how to divide among heirs using the share price used for the inheritance-tax filing?
A. The inheritance-tax valuation (the circular value) and the fair value heirs premise for reaching agreement differ in purpose and do not necessarily match. Valuation and filing are the tax accountant's work, contracted with you separately. Our office does not calculate valuations.

Q. What do we write about shares in the estate-division agreement?
A. Write the issuing company's trade name and head-office location, the kind and number of shares, and the heir who takes them, concretely. For compensatory division, also state the amount, due date and method of the compensation. Support for preparation can be done within the scope of administrative-scrivener work.

Q. Once agreement is reached, does the company's shareholder register change automatically?
A. It does not change automatically. The heir who took the shares requests the issuing company to rewrite the name (Companies Act Article 133; for general succession such as inheritance there is a treatment allowing the acquirer to request alone). Confirm the procedure and required documents with the issuing company.

Sources (Primary Information)

• e-Gov Law Search, "Civil Code" (Act No. 89 of 1896), Articles 264, 898 (paragraph 2 added by Act No. 24 of 2021, effective 1 April 2023), 899, 900 to 902, 906, 907 and 252 (accessed 2026-09-23)
• e-Gov Law Search, "Companies Act" (Act No. 86 of 2005), Articles 106, 130(1) and 133 (accessed 2026-09-23)
• e-Gov Law Search, "Ordinance for Enforcement of the Companies Act" (Ordinance of the Ministry of Justice No. 12 of 2006), Article 22 (rewrite of the shareholder register on general succession) (accessed 2026-09-23)
• Supreme Court, Third Petty Bench, judgment of 28 January 1997 (the rights-exercising holder of co-owned shares is decided by a majority of shares) / Supreme Court, First Petty Bench, judgment of 19 February 2015 (exercise of voting rights over co-owned shares and Civil Code Article 252) (accessed 2026-09-23)
• National Tax Agency Tax Answer No. 4638, "Valuation of shares with no market price," and No. 4205, "Filing and payment of inheritance tax" (valuation under the Basic Property Valuation Circular; accessed 2026-09-23)

This article is general information and does not decide or guarantee any individual share valuation, division method, merit of exercising rights, or the need for or amount of inheritance tax. Valuation of non-listed shares and inheritance-tax filing and payment are by a tax accountant; inheritance registration where the estate includes real estate by a judicial scrivener; and, where the division does not settle and goes to mediation or adjudication, or for individual legal judgement on rights, obligations and disputes, an attorney; and sale or use of inherited real estate by Yotsuba Real Estate Co., Ltd.—each as an independent business under a separate contract. Confirm the procedure and required documents for rewriting the shareholder register with the issuing company. Our office receives no referral fee. Individual judgements are made by a qualified professional after a meeting. Written by Joji Uramatsu, administrative scrivener and licensed real estate broker.