Sorry if my statement was inaccurate. The legal advice I have received states that if I were to start a company I would need to change residence types or would be unable to renew my current visa.
So how does your friend renew his visa? Does he renew as a standard work visa and declare his company at the same time?
As long as you have your current position (employment in my friends case or university enrollment in my case) you can extend the visa on those grounds, basically making you business a "side-business".
After you quit your job or leave university, your visa stays valid until the end of the term.
When the visa expires, you will have to apply for a Business Manager (経営者) visa, because you are not an employee (授業員) at your company, but an executive (役員).
This is incorrect.
A friend of mine started a businesses on a work visa and I myself have even started a business on a student visa [1]. No legal problems. I just recently switched from "Student" to "Manager" visa, and immigration had no problems with the fact that the business was already running for over a year before I applied for my residence status to be changed.
[1] http://marui-plugin.blogspot.jp/2016/11/starting-company-as-...