I think this article is targeted at larger companies with employees, where you need to think a bit more carefully about how much cushion you need, and when is the &quot;last minute&quot; to pull the plug. Depends on the country, but in many, not paying employees salary&#x2F;wages you owe them for work they&#x27;ve done is a bigger deal legally than going bankrupt with other kinds of debt is. So it&#x27;s usually better to start laying people off before the very last minute, vs. holding out until you literally have no money left, at which point you just don&#x27;t send out people&#x27;s final paycheck. The 2nd approach can lead to a very messy bankruptcy, with lawsuits and government labor agencies involved.<p>As the article says,<p>&gt; If you don&#x27;t do this [i.e., lay off staff and shut down gracefully] and instead end up with zero cash and outstanding payroll, tax or other obligations, things will get Very Bad.