Selling a company raises concerns: Can the buyer be trusted? Are the intermediary's fees reasonable? Could loan guarantees remain after the sale? For owner-managers, these affect both the company and life afterward.
The SME M&A Guidelines were created to help businesses without successors pass to new owners and make those transactions more secure. Promoting M&A and preventing harmful deals were both necessary from the outset.
Understanding why explanations and checks became necessary, rather than looking only at current rules, clarifies what to verify before contracting.
The starting point: No successor
Profitability alone does not ensure an SME's survival. If the owner wants to retire, children may not take over and employees may not volunteer, making closure a real option.
M&A as third-party succession expands the path to another company or owner when there is no family or internal successor. The aim is to preserve not only factory equipment but technology, customer relationships, and employees' jobs.
The Small and Medium Enterprise Agency's 2020 White Paper on Small Enterprises identifies limited owner knowledge of M&A and reluctance to sell a long-held company to outsiders as background to the guidelines. Appropriate support also became an issue as intermediaries increased. 2020 White Paper on Small Enterprises, Column 1-3-4
Telling sellers that M&A is an option was insufficient. They needed a path showing whom to consult, what to check, and which contracts to sign, alongside standards for advisers' conduct.
A viable business may disappear when its owner retires
Make M&A an available choice for owners
Bridge knowledge and experience gaps and reduce transaction uncertainty
Distinguish the 2020 introduction from later revisions
The 2015 Business Succession Guidelines were comprehensively revised into the SME M&A Guidelines in March 2020. The second edition followed in September 2023 and the third in August 2024. Current materials are available through the Small and Medium Enterprise Agency's official guidance You can check with.
| time of year | Introduction or revision | What it sought to establish |
|---|---|---|
| 2015 | Business Succession Guidelines | Predecessor guidance for business transfers to third parties |
| March 2020 | SME M&A Guidelines | Guidance for owners and conduct standards for support organizations |
| September 2023 | Second edition | More specific guidance on fees, support quality, and written explanation of key matters before contracting |
| August 2024 | Third edition | Expanded responses to unsuitable buyers, owner guarantees, excessive solicitation, and conflicts of interest |
Source: 2020 White Paper and Announcement of the second-edition revision and Announcement of the third-edition revision。
Chronology matters. It is inaccurate to explain the 2020 introduction solely through measures against unsuitable buyers that became prominent later.
It is also wrong to say the initial aim was only promotion and later shifted to owner protection. The first edition already addressed intermediary conflicts, second opinions from other professionals, and tail clauses concerning success fees after termination.The process has refined existing safeguards for appropriate transactions in response to market issues.
Why did explanation requirements for intermediaries increase?
An owner selling for the first time cannot easily evaluate an intermediary's explanation on the spot. Hearing “the success fee is 5%” does not establish the amount payable.
What is the 5% applied to? Is there a minimum? Does the buyer also pay? When is payment due? Are tax and legal diligence included? Without these terms, providers cannot be compared.
The 2023 second edition expanded discussion of fee bases, minimum fees, support quality, and written pre-contract explanations. It also addresses ensuring time for owners to receive explanations and consider them. METI: Announcement of the Second-Edition Revision
This can be read as a mechanism enabling owners not merely to defer to professionals, but tounderstand what they are commissioning and paying for before choosing. For the distinction between intermediaries and FAs, see our article on intermediaries and financial advisers.
Risks beyond price highlighted in the third edition
The 2024 revision announcement identified unsuitable buyers, owner-guarantee problems, and excessive solicitation and advertising as issues requiring action.
For example, a sale agreement saying the buyer will arrange guarantee release does not automatically extinguish the bank guarantee. The third edition sets out steps to consider consultation with banks and professionals before completion and address the issue in the definitive agreement.
It also calls for investigation of buyers and reporting its scope and findings to clients. Sellers must verify whom they entrust with the company, rather than being only the subject of investigation themselves. METI: Announcement of the Third-Edition Revision
| Issue | What concerns the owner? | What to ask before contracting |
|---|---|---|
| Buyer's circumstances and financial capacity are unclear | Cannot assess whether promised payments and transition will be performed | How was the buyer investigated, and what was verified? |
| Owner-guarantee treatment is unclear | Personal liability may remain after giving up the company | What bank coordination, timing, and conditions apply to release or transfer? |
| Intermediary conflicts of interest | Fees or repeat business may take priority over the client's wishes | How are fees from both sides and relevant interests explained? |
| Fees and scope are unclear | Additional charges or omitted expected services may go unnoticed | What are the calculation base, minimum, payment timing, and exclusions? |
| Company identity is disclosed unintentionally | Employees or business partners may learn of the contemplated sale | To whom and when will disclosure occur, and whose consent is required? |
These questions organize third-edition issues for owners; they do not reproduce the guidelines verbatim.
Do guidelines or registration guarantee peace of mind?
The guidelines are not legislation. The M&A Support Organization Registration System is also not a licensing regime prohibiting unregistered intermediary or FA services. Its official FAQ explicitly states this. M&A Support Organization Registration System: FAQ
That does not make the guidelines irrelevant. They provide a benchmark for checking consistency between a provider's commitment to comply, the engagement agreement, and actual explanations.
Both registration status and the individual's explanations and investigation need checking. Registration alone does not guarantee a buyer's creditworthiness or future contractual performance.
Do not measure market success solely by completed deals
The SME M&A Market Reform Plan was published in August 2025. Its announcement emphasizes M&A for growth as well as succession while calling for further work on support quality and unsuitable buyers. It is a package of market-reform actions and policies, not a fourth edition of the guidelines. METI: Publication of the Market Reform Plan
The following is our view. Policy outcomes should be assessed not only by completed deals but by whether guarantee releases or transfers occurred as promised, payments were made, and complaints were resolved. Completion alone does not show whether owners could confidently move to their next stage of life.
This requires strengthening existing consultation and information systems and developing information that permits examination of post-transaction problems and responses. Showing what improved and what remains, while protecting company confidentiality, would build trust in the market.
What matters to you is not merely signing a contract, but receiving payment, understanding remaining responsibilities, and moving forward with confidence after entrusting the company to someone else. The guidelines also help identify what to ask professionals to achieve that outcome.
This manuscript is a general explanation based on laws and regulations as of September 9, 2026. Please obtain advice on your individual circumstances before taking action.
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