Description:Entrepreneurship in Ireland has been marked by high attrition-rates among young companies. In order to create a culture conducive to entrepreneurs, particularly serial entrepreneurs, a change of mindset is required. Entrepreneurs should not be penalised for failures and the business environment should encourage them to try again. They possess talent that should be nurtured. It should be recycled into new start-ups.
Implication(s):Ireland’s bankruptcy laws are punitive and disincentivise rather than encourage entrepreneurship. They are out of kilter with most developed economies and our European neighbours. A balance is needed between encouraging entrepreneurship and discouraging the phoenix syndrome whereby a new company is formed from the ashes and unsatisfied debts of the old. The proposed legislative changes should improve the environment for encouraging business start-up.
The Personal Insolvency Act 2012 represents a significant improvement in Ireland’s regime for dealing with over-indebtedness. Nonetheless, a few areas of concern remain; these should be addressed in order to ensure that the aims of the act are fully realised. Under the current provisions, tax and commercial rates debts are excludable, meaning that they may remain outside of any debt arrangements, but may also be written down with the consent of the Revenue or the local authority. To ensure that debtors do not remain constrained by legacy debts owing to the State, Government at all levels should play its fair and proportionate part in any debt arrangements where it is a creditor. While pension funds are by and large excluded under the act, the same provision does not extend to approved retirement funds (ARFs), which, owing to their flexibility, have been particularly popular with self-employed people. To ensure equitable treatment under the insolvency arrangements, ARFs should be afforded the same level of protection as other pension schemes.
Current Position:Entrepreneurship and bureaucracy seldom see eye to eye and most will view the demands of the regulatory environment as little more than bureaucracy. It is important therefore to keep the regulatory environment as simple and as relevant as is feasible yet strong enough to ensure that business can adhere to necessary and proportionate demands from regulatory agencies. A strong and effective regulatory environment is important as it ensures a level playing pitch for new entrants and so is one of the more important factors in encouraging entrepreneurship. Ibec believes that there is also a need for a Regulatory Commission to encourage greater efficiencies among, and oversee the administration of, regulatory agencies.
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Last Updated: 08/23/2013