Junggi Junganghoe Holds 2nd Corporate Succession Activation Committee Meeting... "Succession Support Must Be Legislated"

Discussion on Policy Tasks Including 'Role of Local Governments to Activate Succession'

[Asia Economy Reporter Kim Heeyoon] The Korea Federation of SMEs announced on the 9th that it held the 2nd Corporate Succession Activation Committee meeting of 2021.

The Corporate Succession Activation Committee is an organization established to enhance the practicality and expertise of policy tasks for activating corporate succession. Attendees at the meeting included Song Gongsuk, CEO of Watos Korea; Yoon Taehwa, Dean of the Graduate School of Business at Gachon University; Kim Heecheon, Director of SME Policy at the Ministry of SMEs and Startups; representatives of SMEs undergoing corporate succession (including first and second generation); and private experts from academia and research sectors.

The committee shared research results on the 'Legislation to Support SME Succession' and 'The Role of Local Governments in Activating Corporate Succession,' and discussed corporate succession policy tasks to be promoted next year.

Choi Sujeong and Kim Heeseon, research fellows at the Korea Institute for Startup & Entrepreneurship Development, who presented on the topic of 'Legislation to Support SME Succession,' stated, “Japan, which entered an aging society earlier than us, enacted the Business Succession Facilitation Act reflecting the realities of SMEs and supports systematic succession through various support programs. At this point, when a shortage of successors is expected to worsen due to declining birth rates and aging, it is necessary to enact a separate law to enable comprehensive support for SME succession and take proactive measures.”

Following this, Kim Sanghoon, research fellow at the Korea Institute for Startup & Entrepreneurship Development, who presented on 'The Role of Local Governments in Activating Corporate Succession,' said, “Half of domestic businesses are concentrated in the metropolitan area, and due to the movement of manpower to the metropolitan area, the regional share of national GRDP, which exceeded 50%, has decreased to below 50% since 2015, causing an overall contraction of the regional economy. It is necessary for local governments to establish systems such as ordinances to nurture local SMEs so that they can grow into long-standing companies that serve as drivers and pillars of regional economic innovation.”

Committee chairs Song Gongsuk and Yoon Taehwa explained, “Currently, Korea’s SME succession support system can be said to consist of only two measures: the business inheritance deduction system and the gift tax special taxation system. It is necessary for the government to prepare active support policies so that companies can focus on management through the establishment of systematic succession support policies.”

Yang Chanhoe, Head of the Innovation Growth Headquarters at the Korea Federation of SMEs, said, “The current corporate succession support system is rather making innovation difficult for companies. Next year, in addition to improving the existing corporate succession tax system, we will strive to create a corporate succession ecosystem through the enactment of the Special Act on SME Succession Support announced today and the establishment of ordinances to support the activation of local SME succession.”

This content was produced with the assistance of AI translation services.