It's not just bankruptcy. A "Company Closing Catalog" to restart your life

Lately, these words have been crossing my mind before I go to sleep.

Next month's payments. Employee salaries. My family's livelihood.

There's no end to the thinking, but my brain keeps spinning on its own, and before I know it, it's 3:00 AM...

Hello!!!

I'm Dai Hibino, also known as "Attorney Bino," representative of the law firm mamori, which has a total of 170,000 followers on social media.

In the field of corporate bankruptcy and business turnaround, I have seen countless company presidents caught in this late-night loop.

And when they come for a consultation, almost everyone says the same thing.

That Showa-era mindset of "closing down equals the end of life"—hasn't someone, somewhere, brainwashed you into believing that?

I'll be blunt: that way of thinking is long past its expiration date in the Reiwa era.

For a Reiwa-era business owner, closing a company isn't the end of life; it's just a save point to move on to the next game..

Actually, I myself once made a complete mistake in a management decision andhad the experience of melting away over 10 million yen in cash.

I was depressed for one night, of course, but when the loss was finalized, what came to mind was...

"What's done is done, so let's think about the next thing." "For now, the current members are fired."


That's it.But this is

the standard specification for a business owner who operates based on economic rationality.Sometimes there are people who say, "I'm prepared to die with my employees!!!" and end up burning through everything, including the president's personal card loans and the family's savings, but

that's not a beautiful story or anything; it's just a collateral damage incident.This time, I will show you all at once the "Company Closing Catalog" that Reiwa-era business owners absolutely must keep in mind!!!

If you are told "Let's proceed with bankruptcy," you can doubt that judgment

There are so many presidents who, upon hearing "close the company," immediately think of the two characters for "bankruptcy."

Actually, presidents who have gone to consult with other lawyers often say this.

"I was told in 5 minutes that 'bankruptcy is the only option.'"

No way, you can't let someone decide the end of your company in 5 minutes, right?

There are lawyers who bring up the two characters for "bankruptcy" like it's assembly-line work.

Those are the very people who have never once done what I'll talk about later, which is "how to structure a second company method."

And this is the beginning of the misfortune itself.

In reality, there are roughly 5 routes to closing a company.

"Bankruptcy" is just one of the five cards you have.

Yet, many presidentslose the management game by narrowing their hand down to one card without knowing the existence of the remaining four.

If we use a hospital as an example, it's like being told "surgery is the only option" immediately when there are five treatment methods.

No second opinion, just the final resort right away. It's ridiculous.

Reiwa-era exit strategy catalog. How many cards do you have left to play?

What's scary is that the later you start moving, the more the cards you can use disappear one by one.

So, first, let's do a self-diagnosis to see how many cards you have left right now.

1. Ordinary Liquidation = Closing quickly while you still have room

This is the honor student pattern of withdrawal, where there is no debt and you can pay everything with the company's assets.

The president closes the company based on their own will, such as "there is no successor," "the future of the industry is not visible," or "I'm just tired."

Since no debt remains, the damage to the individual is also zero.You can keep money on hand after closing, which is the coolest option in the Reiwa era.

It's okay to ignore outsiders who say things like "it's a waste to close when you're not in the red."

The people who say such things are the type who don't take any risks themselves and just talk at bars, saying, "I could do it better."

The opinions of people who haven't committed a single yen to the company are worth zero.

The only people who should decide on the company's exit are the president and their family.

Sell while it's in a sellable state, withdraw while you can withdraw. This is modern rational management.

2. Special Liquidation = Closing quietly without trouble

An option for experts that is halfway between ordinary liquidation and bankruptcy.

Debt remains, but if you can getthe consent of a majority of creditors by head count and two-thirds or more based on the amount of debt, you can close peacefully through court procedures.

While bankruptcy is "the court summons all creditors for forced processing," special liquidation has the image of "securing agreements with major creditors beforehand and then bringing it to court."

It isa silver-tongued movewhen you want to avoid the label of "bankruptcy" or when you want to smoothly organize an old company during business succession between relatives.

3. Civil Rehabilitation = Compressing only the debt while keeping the company alive

From here on, it's the "surgical" phase rather than "closing."

The president continues to manage the company while having the debt significantly cut.

"The products, customers, and employees all have value, but the past debt is too heavy and we're dying."

This is a life-support device for such companies.

However,you can't use it unless the company has a certain level of strength (cash on hand and business profitability).

If you come after you've completely run out of breath, it's already too late.

4. Business Transfer/Second Company Method/M&A = Rescuing only the valuable parts

This isthe trump card that Reiwa-era business owners should know the most.

"Rebuilding while holding onto the entire company is too heavy. But the core services, customer lists, and excellent employees definitely have value."

In such a case, this is a scheme whereyou move only the profitable business to a new company (a sponsor company or a separate legal entity newly created by the president) and leave the heavy debt in the original company to be liquidated.

However,it doesn't go as cleanly as "rescue only the valuable parts, throw away only the debt".

The new company needs to pay the old company a fair price for the business
(if you take it out for free, it will be treated as a fraudulent act and the whole procedure will collapse).

• Staff in unprofitable businesses cannot move to the new companyin most cases.
• If you cannot getprior agreement from banks and major creditors, you cannot set it up in the first place.

In other words, it is a method that requiresthe resolve to cut something in order to save something.

Even so,because you can let the valuable parts survive and the president and some employees can move on, rather than the whole company sinking, you can reach a much better landing than just choosing bankruptcy.

"You can't save everyone, but you save what you can." This isthe realistic withdrawal strategy of the Reiwa era.

Here is one case I actually handled.

President B, who operated 5 restaurants in Tokyo, had good performance, but the grace period for past COVID loans ended, and the rise in labor costs and rent overlapped, causing a cash flow crunch.

Three stores with good taste and reputation, loyal repeat customers, and staff who have stayed with me without quitting.

And yet,the burden of repaying COVID loans and the consequences of delaying the decision to close two unprofitable stores by six monthswere enough to make it impossible to breathe.

I told President B clearly.

I negotiated persistently with the bank behind the scenes and used the second company method totransfer the three profitable stores and the staff working there to a new company.

By also utilizing the Guidelines for Personal Guarantees by Business Owners, we managed to protect the president's home.

Of course, there was also thepainful decisionto close the unprofitable stores and lay off the staff who worked there, so I think it was a difficult decision for the president.

But later, I couldn't forget one thing President B said.

"Doctor... I was able to pay the salaries for the staff at the three stores properly this month. I feel truly sorry for the members at the remaining two stores, butI understand now that sinking with everyone wasn't the right answer."

This is the power of the Reiwa-era exit strategy.

By the way, just as important as "whether you can save the business" is "preparing to keep the company running if the president themselves collapses".

Before thinking about an exit strategy, if you collapse and can no longer make decisions, everything is over, so please read this as well.

⑤ Bankruptcy = The last resort. But it's not the "end"

Bankruptcy is certainly a procedure to "completely dismantle the company."

But this does not meanthe president's personal life is over.

Legally, a corporation and an individual are "separate entities."

If you use the relief rules prepared by the government called the Guidelines for Personal Guarantees by Business Owners, while you can only keep990,000 yenin a personal bankruptcy, there is a possibility of protectingup to about 3.6 million yen in cash + your home.

In other words,even in a state where you thought "bankruptcy is the only option," if you arm yourself properly, you can protect your home and family.

The moment you are slow to act, your cards disappear one by one

As I said before,the number of cards you can use is completely different depending on the state of the company and the timing of when you start moving.

If you move the moment you think "this might be bad," you have plenty of choices.

Conversely, the more you hold on thinking "if I can just endure for another 3 months," the options disappear one by one.

What I feel is the biggest waste in the field ispresidents who come to me after they have poured their personal savings and life insurance surrender values into the company and are left with nothing.

Moreover, when I ask these presidents, "Why didn't you come sooner?" they almost always give the same answer.

The stage where you can do something by trying your best has long since passed!!!

If they don't show you options other than bankruptcy, I get irritated every time, wondering if they are doing their job as an expert.

"If you had come three months ago, you could have saved your home and business..."

This is truly the #1 phrase I don't want to say.

In the Reiwa era, the presidents who know "how to fold" are the ones who win

For company presidents up until the Heisei era, the aesthetic was to cling to the company with sheer grit and fight until you burned out.

But it's different now. For you fighting in the Reiwa era, the iron rule is to quickly fold failing businesses and restart the fight with the next venture.

Closing a company is not a management failure.

Liquidating a deficit-ridden business, withdrawing strategically, and fighting again in a new field...

That is a rational decision commonly practiced in the business world across the globe.

The law also provides proper mechanisms for doing just that.

When I personally lost 10 million yen and had to lay off almost everyone, what I realized was that "the life and death of a company and the life and death of a president are completely separate things."

By the way, once a company's management starts to tilt, there is a possibility that your best employees will be the first to leave using "resignation agency services with lawyers".

I have disclosed all the cards that employees might use to fight back in this article, so it won't hurt to read it to understand your company's labor risks.

The law is on the side of those who know it.

The exit for a company is not just bankruptcy.
Reiwa-era managers have Reiwa-era ways of closing.

If you know that, you might be able to sleep a little better tonight.

If you are ever unsure about a management decision, please feel free to consult us via our official LINE.

See you later.