Give business a second chance
There has been a small amount of celebration among insolvency experts in the past few days.
And, unexpectedly, the reason comes from the European Commission – a body more used to stimulating grumbles than outright joy.
This time however, the experts are happy. The EC has published a paper called Restructuring, Bankruptcy and a Fresh Start, a paper that calls for a review of bankruptcy law across the EU.
At the heart of this is a desire to see the law become less severe and far less likely to deter entrepreneurs from restarting businesses.
In short, the EC wants the end of ‘outdated and harmful restrictions, disqualifications and prohibitions’.
The paper makes good reading for many in the UK profession. Philip Long, head of corporate recovery and insolvency at PKF, believes it will ‘help to embrace and encourage enterprise by further reducing the stigma of business failure’.
And that’s the point right there. Most business failures are not about some unscrupulous shark attempting to escape his debt. They’re about genuine businessmen coming a cropper, making mistakes in good faith and perhaps not having the expertise or backing to recover.
The point is they learn from those mistakes, which means even though a business has tanked, many entrepreneurs become better equipped to go on running a company.
Let’s hope the EU goes on to achieve exactly what it aims for.