Bankruptcy
My company went bankrupt: now what?
Before closing, see an accountant and a lawyer: judicial or out-of-court reorganization, or an orderly wind-down. Closing badly costs more.
bairogonzalez.com team, drawing on Bairo's story · Published
Watching the company you built stop breathing is a kind of grief. You know every chair, every customer, every night you thought it would work. Before you turn off the lights, it's worth knowing there is a right way to get through this moment.
What to do now
- Find out where the company really stands. Ask your accountant for an up-to-date picture: cash, accounts payable, accounts receivable, unpaid taxes, labor and bank debts. Without that picture, every decision is a guess.
- Know the exits the law offers. Law 11,101/2005, amended by Law 14,112/2020, provides for out-of-court reorganization (an agreement with some of the creditors), judicial reorganization (a payment plan approved by the creditors, under a judge's supervision) and bankruptcy itself. Micro and small businesses can use a special plan, with installments over up to 36 months (art. 71). And there is a point few people know: a business with no way to recover must, under the law itself, file for bankruptcy (art. 105). In practice, many small businesses without assets close through an orderly wind-down, with agreements. Each path has costs and requirements; a lawyer decides it with you.
- Don't close "in fact" without closing "in law." Abandoning the company while it is still registered, without formally closing it, keeps debts and fines growing. If you are going to close, do the formal deregistration with your accountant. In many cases it is possible to deregister even with outstanding debts, but the debts don't disappear: they may start being collected from the partners.
- If you are an MEI (individual microentrepreneur), the company's debts travel with your CPF. Deregistration is done on the Entrepreneur Portal (Portal do Empreendedor), and any remaining debts are still yours. Negotiate them through the channels of the Federal Revenue Service and the Office of the Attorney General of the National Treasury (PGFN).
- Take care of people first. Employees are entitled to their severance pay, and in bankruptcy labor claims have priority over almost all others. Talk to your team truthfully and with advance notice.
- Ask for free guidance. Sebrae, Brazil's small-business support agency, serves small businesses (0800 570 0800); the Public Defender's Office and law schools' legal aid clinics help those who can't afford a lawyer.
When it happened to Bairo
Bairo says he has seen businesses of his end in more than one way. A natural-based cosmetics brand he built worked, and even so he left: his partners pushed him out when he proposed bringing touchscreen technology into the business. Later, with capital from events and digital printing, he joined as an investing partner in a company that was not what it seemed and did not hold.
He doesn't hide these falls. Whoever shows only success hides precisely what teaches the most. Every business that ended left something in his hands: method, an eye for the future, proof that he could create from nothing, the lesson about whom to build with.
The path
A company that closes is not a life that closes. What you learned by opening, hiring, selling and making mistakes stays with you, and it is the hardest capital to copy. Close with dignity, pay what you can in the right order, keep the lesson. For Bairo, the attempt that worked was the one that carried all the others inside it.
Before any conversation with creditors, with your team or with your family, write on a sheet of paper what you want to happen in the next ninety days. Pay whom? Keep what? Close when? That sheet doesn't need to be right; it needs to exist. It is what keeps panic from making decisions for you. In the hard weeks, go back to it, correct what needs correcting, and keep going.