Is it necessary to enroll in social insurance even in a limited liability company? Commentary on the flow of enrollment procedures for social insurance.
Social insurance is a collective term for insurance systems that provide for various risks such as illness, injury, and unemployment. When establishing a limited liability company, there is an obligation to join social insurance even if there are no employees.
If you want to hire employees, you will also need to apply for employment insurance and industrial accident insurance, so be sure to understand the insurance premiums per person.
In this article, we will explain the conditions for enrolling in Health insurance plans and the procedures required to enroll in each type of insurance.
What is social insurance?
Social insurance is one of the social security systems operated and managed mainly by the national and local governments, and is a general term for public insurance such as health insurance, welfare pension, industrial accident insurance, employment insurance, and nursing care insurance.
Corporations and sole proprietors who regularly employ five or more employees are required by law to enroll in social insurance. Therefore, if you establish a limited liability company, you must enroll in social insurance.
| insurance | overview |
| Health insurance | Medical insurance that allows you to receive necessary benefits in the event of illness or injury |
| Welfare pension | Public pension system for workers employed by companies |
| Industrial accident insurance | A public insurance system that applies to employees of private companies and their bereaved families based on the Industrial Accident Compensation Insurance Act. |
| Employment insurance | A system that provides financial support in the event that an employee becomes unemployed |
| Long-term care insurance | Long-term care services can be received when certified as requiring long-term care or certified as needing support |
Is there an obligation to join the social insurance of a limited liability company or a one-person president?
As a general rule, even limited liability companies and sole presidents are obliged to enroll in social insurance.
However, there are exceptional cases where it is not necessary to enroll in social insurance, such as when there is a single president whose remuneration is close to zero. Details of the conditions for joining are given below.
After establishment of the corporation, in principle, it is obligatory to join
You are obligated to enroll in social insurance if:
Requirements for compulsory enrollment in social insurance
- Offices of national and local governments and corporations
- A sole proprietorship that falls under the statutory 16 industries and always employs 5 or more people
Since a limited liability company is also a corporation, in principle, it is obligatory to enroll in social insurance at the time of establishment of the limited liability company. In addition to employees, executives, presidents, and representative employees of limited liability companies are also eligible for health insurance and welfare annuity insurance.
Some cases do not require social insurance
Social insurance is mandatory, but there are exceptions. For example, if there is no executive compensation, that is, if the president’s salary is zero, there is no problem even if you do not join social insurance.
Also, be careful if the reward is low.
According to the insurance premium table of the Japan Health Insurance Association, the minimum monthly health insurance premium in Tokyo for March 2023 is 2,900 yen for those under 40, 3,427 yen for those aged 40 to 64, and 8,052 yen for employees’ pension. (All amounts are split with the company).
Therefore, if the monthly remuneration for executives is at least 12,000 yen, it cannot be deducted from their salaries, making it difficult to enroll in social insurance.
If the president’s remuneration is zero or if the remuneration is less than the insurance premium, the pension office may refuse to join the social insurance.
Flow of enrollment procedure of social insurance of limited liability company
The enrollment procedure for social insurance is carried out within a certain period of time after the establishment of the limited liability company.
In this article, we will explain the procedure for association health insurance, which is often used by small and medium-sized enterprises.
How to enroll in Health Insurance and Welfare Pension Insurance
To enroll in social insurance, you must submit a notification to the pension office within five days of establishing a limited liability company.
First of all, when the limited liability company is established, we will submit a “notification of new application for health insurance and employees’ pension insurance”. This is a notification to be submitted only once at the time of establishment, and a certified copy of the register is also submitted together.
Also, if the company’s location is different from the address on the registered copy, attach a document that proves the company’s location, such as a copy of the lease agreement or a utility bill.
Next, after the establishment of the limited liability company, each time the number of persons eligible for membership increases, a “Notification of Acquisition of Insured Person Qualification” is submitted. In addition, if there is a person to be enrolled as a dependent, submit the “Notification of Change of Person Covered by Health Insurance” together.
How to sign up for labor insurance
Labor insurance is a collective term for industrial accident insurance and employment insurance. After the establishment of the limited liability company, the business owner will apply for labor insurance at the time of hiring employees.
Workers Compensation Insurance must be submitted to the Labor Standards Inspection Office within 10 days from the day following the day the employee was hired. Submit to
Employment insurance notification must be submitted within 10 days from the day after the employee is hired, and a “Employment insurance covered office establishment notification” must be submitted by the 10th day of the month following the month in which the employee was hired. Notification” to Hello Work.
Employment insurance can only be submitted after notification of establishment of insurance relationship, so be sure to submit work accident insurance first. You can also apply electronically from the website of the Ministry of Health, Labor and Welfare
What social insurance premiums does the limited liability company bear?
The share of social insurance premiums varies depending on the type of insurance, and both the company and the employee bear the burden. Employees are deducted from their monthly salary, and the company adds the company’s contribution and pays it as social insurance premiums.
Health insurance premiums, welfare pension insurance premiums, employment insurance premiums, and long-term care insurance premiums are also deducted from bonuses.