〈中部経済新聞 「中経論壇」平成26年4月22日掲載 池田桂子 〉
Guarantee of Management Freedom from Responsibility
The guarantee contract is a familiar form of a legal contract. It is difficult to say when a person, either a family member or close friend may request for some help and that help, is with a guarantee contract (that stems from either affection or kindness). However, this may become a burden in the future and may cause some rather unforeseen difficulties because the guarantor does not know at the time they sign a guarantee contract (due to the uncertainty of repayment). There is then the possibility which should to be considered, and that consideration might be one relegated to non-repayment. That non-repayment is then applied to the guarantor who then becomes the main debtor and then could not decide as to taking rehabilitation proceedings and bankruptcy.
Suicides in Japan is said to be around 30,000 people a year. Family, full or part time workers and the self-employed accounted for a little less than 3,000 of them as persons having a job, or some form of income.
In France, there is a principle of proportionality to invalidate the contract if it is devoid of proportionality explicitly to income and property of the guarantor. In the United States, there is the principle, not to continue the blame endlessly; the pursuit of responsibility is to end with the assets as collateral.
When we change the view point, it is that pursuit which can be determined as being unqualified and can be revaluated as a misjudgment of the loan, and or the lender. However, in Japan, it is possible to install a guarantee on individual managers who borrow against business funds and this has been a practice which has been taken for granted. That then brings the result of a disturbing re-challenge, and also delays the decision of discontinuation of business.
Now, there is a movement of amendments in the field of “Civil Law of Obligations” which is underway at a rapid pace. I will outline a provisional draft when it has been compiled by the end of July of this year. In essence; prohibiting the third party guarantee of management other than for loans as debt and is looking at a consensus of those amendments, but what remains is how to delineate the scope of management. It is now a question of deciding whether to grant a spontaneous exception warranty which is now on the agenda.
Last year, a study group of experts, comprising of the Japanese Bankers Association and the Japan Chamber of Commerce and Industry compiled the “Guidelines for Management Guarantee”, and it was with the initial application from February 1, 2014 this year. Is not legally binding, but the Financial Services Agency has also published a draft oversight in light of these guidelines.
Guidelines, (please refer to the Financial Services Agency HP for more information), are expected to enable the payback of the early business development and drastically cutting its integrity.
That is ①Now, the debt of a Company should be considered in a set as a personal guarantee of management. However, do not ask for my personal guarantee as management. For example, when that of an individual who may be management and that of corporations are clearly separated, that is, the summary is to consider the loan terms alternative obligations or products, such as accounts receivable. ②When a debt balance cannot be repaid on the time of fulfillment, the guarantee obligation is exempt in principle. ③ In the case of personal bankruptcy a guarantor may be allowed to continue living at his or her home which is not considered unreasonable and to keep from 1000000-3600000 yen depending on the individuals pension, in addition to the extension of the free assets, as well as the cost of living should also be considered. So that enables a decision as to going out of business and early business revitalization.
< By Keiko Ikeda published April 22, 2014 Chubu Keizai newspaper “Medium through Tribune” Heisei>