📖 Approx. 5 minutes ／ Updated May 5, 2026
1. Scope of Related Parties
Includes the chairperson, their spouse and relatives, companies managed by relatives, and affiliated medical corporations.
2. Main Transaction Types
Real estate leases, service agreements, loans (borrowing and lending), and business partnerships.
3. Reporting of Related Business Transactions
Transactions subject to reporting obligations under the accounting standards for medical corporations.
4. M&A Due Diligence Points
Market price reasonableness of transactions, contract documentation, and tax audit risks.
5. Pre-Closing Review
Terminate unnecessary related party transactions. Correct any discrepancies with market prices.
6. Continuation of Transactions Post-Handover
Reconfirm contract terms for related party transactions that will continue under the new management.
Start with a Free Consultation
For consultations regarding medical business succession and M&A, contact M&A Medical, specialists in the healthcare industry. Please reach out via our contact form or our 60-second free simple assessment to take the first step. We are an M&A support institution certified by the Small and Medium Enterprise Agency, operate on a success-fee basis (no upfront fees), offer nationwide services, and guarantee strict confidentiality.
Key Takeaways of the Article
Related party transactions in medical corporations (e.g., real estate leases, service agreements, loans with the chairperson, relatives, or affiliated companies) are subject to reporting obligations under the accounting standards for medical corporations and are a key focus area during M&A due diligence.
Latest Trends in Medical M&A Industry
Since 2020, the number of business succession M&A deals in Japan’s healthcare industry has rapidly increased. According to a survey by the Japan Medical Association, the average age of practicing physicians exceeds 60, with an estimated 40% facing a lack of successors. Concurrently, demand for succession by medical corporations and corporate groups is expanding, leading to a record number of matching opportunities for both sellers and buyers.
- Succession Demand for Clinics: Over 1,000 M&A and business succession deals occur annually (estimated)
- Trend Towards Medical Corporation Structure: Increasing cases of succession after transitioning from individual practice to a medical corporation
- Diversification of Acquirer Candidates: Medical corporation groups, business companies, physicians seeking independence, fund-related entities, etc.
- Impact of Regulatory Changes: Amendments to the Medical Care Act, extension of the Certified Medical Corporation system, and revisions to medical fee schedules influence succession strategies
Considering these industry trends, early information gathering, consultation with experts, and strategic timing are crucial for success.
Practical Checklist (for Tax Accountants and CPAs)
When supporting your clients’ medical M&A transactions, please review the following systematically:
- ☑ Accuracy of financial statements and tax returns for the last three fiscal years
- ☑ Compliance with accounting standards for medical corporations (for entities of a certain size)
- ☑ Completeness of related business transaction reports
- ☑ Reasonableness of executive compensation and status of pre-determined notification of bonuses
- ☑ Recording status of provisions for retirement benefits and bonuses
- ☑ Existence of off-balance sheet liabilities (unpaid overtime, social insurance non-enrollment, lawsuits)
- ☑ Valuation of equity interests (net asset method, earnings capitalization method)
- ☑ Potential utilization of the Certified Medical Corporation system
- ☑ Optimal allocation of capital gains, retirement income, and dividend income
- ☑ Notification schedule to the competent authorities
Actual Support Cases
Examples of business succession and M&A support provided by M&A Medical (partial, details omitted due to confidentiality agreements):
- Case A: Urban Clinic – Chairperson aged 70, succession to a medical corporation group due to lack of successor. All staff retained, patient care continued. Approximately 8 months from consultation to closing.
- Case B: Rural Clinic – Maintained regional medical care through succession by a nearby medical corporation, serving as the sole clinic in the area. Achieved through collaboration with a returning physician.
- Case C: Strategic Acquisition – A physician planning a new practice acquired an existing clinic with a favorable location, staff, and licenses. Commenced operations within six months, saving approximately two years compared to a new startup.
In each case, we aligned the desired conditions of both sellers and buyers and meticulously addressed industry-specific issues such as continuity of medical services, licensing, and staff treatment.
Frequently Asked Questions (FAQ)
Q. How should I engage if I receive a business succession consultation from a client?
The involvement of tax accountants and CPAs spans multiple phases, including tax scheme planning, financial due diligence, and post-transaction income design. M&A Medical collaborates with you as a partner professional, providing support that complements your existing advisory relationship by addressing M&A-specific issues in the healthcare sector (e.g., accounting standards for medical corporations, equity interest valuation, related party transaction reporting).
Q. What points do tax accountants often overlook in medical corporation M&A?
Specific points unique to medical corporations include: ① Notifications to the competent authorities regarding changes in the composition of members and directors, ② Differences in tax treatment between medical corporations with and without equity interests, ③ Potential utilization of the Certified Medical Corporation system, ④ Completeness of related party transaction reporting, and ⑤ Compliance with accounting standards for medical corporations. Proceeding with the assumption of general M&A can lead to significant oversights.
Q. What are the collaboration models with M&A Medical?
We can collaborate with your firm on a case-by-case basis or establish a continuous partnership. We will work together to advance the transaction by dividing roles in each phase, such as tax scheme design for the seller, financial due diligence for the buyer, and post-transaction income design. Please contact us for details.
Related Articles and Services
Please also refer to the following articles in conjunction with this article:
- Complete Guide to Tax Schemes for Medical Corporation M&A
- Taxation Practices for Equity Interest Transfers
- Utilizing the Certified Medical Corporation System
- Inheritance Tax Planning for Medical Corporations
Information on Free Consultations and Assessments
For consultations regarding medical business succession and M&A, please feel free to contact M&A Medical, specialists in the healthcare industry. As an M&A support institution certified by the Small and Medium Enterprise Agency, we design M&A deals that create long-term value for both sellers and buyers.
- ✅ Certified M&A Support Institution by the Small and Medium Enterprise Agency
- ✅ Specializing in the Healthcare Industry, Nationwide Service
- ✅ Fully Success-Based Fee (No upfront fees, no monthly fees, no interim payments)
- ✅ Strict Confidentiality Guaranteed Upon NDA Signing
- ✅ Anonymous Consultations and Free Simple Assessments Available
Please take the first step by contacting us via our Contact Form or our 60-Second Free Simple Assessment.