Japan

The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on Japan:

1) When does a company need to file for insolvency in Japan?

In Japan, the main legal grounds for a company filing for insolvency are similar to Germany and include (i) insolvency (i.e. the debtor is generally and on a permanent basis not able to pay its debts at the due date) and (ii) excess of debts over assets. MORE

2) What liability risks exist for the management in Japan in a corporate crisis?

Even though Japanese insolvency regulations do not provide for a general obligation of the management to apply for bankruptcy proceedings within a certain period of time after the confirmation of the respective insolvency reasons, the management of a Japanese corporation may still be personally liable [...]. MORE

3) Is there any state aid available for companies in Japan due to the Corona crisis?

The government of Japan approved a financial aid package for small and medium-sized enterprises as well as self-employed workers affected by COVID-19. The measures include low-interest loans, governmental guarantees, subsidies and immediate financial support. MORE

4) What immediate measures should a Japanese company take if it is affected by the Corona crisis?

The most essential first steps for companies in Japan affected by the Corona crisis are reducing corporate costs and seeking governmental support to the extent offered. Since no special measures have been implemented for the reduction or payment prolongation with regard to corporate dues, such as rent payments, any measures sought, need to be negotiated with each creditor individually. MORE

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