This site has been archived on 02/02/2015

Navigation path

This website is no longer being updated.

Please visit the new Internal Market, Industry, Entrepreneurship and SMEs website.

Small and medium-sized enterprises (SMEs)

Policy – Main policy recommendations

2nd chance entrepreneurs in action



"It is better to have enough ideas for some of them to be wrong, than to be right by having no ideas at all" -  Edward de Bono

In 2008, the Commission adopted the Communication on the Small Business Act  (SBA). This Communication was intended to provide all European public authorities - be they local, regional, national or European - with a new policy framework and a series of concrete actions to be implemented to make SME friendly policy mainstream policy. Of the 10 principles to guide policy, Principle II is devoted solely to second chance. It asks public authorities to "Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance" It specifically asks the Commission to "continue to promote a second chance policy by facilitating exchanges of best practicebetween Member States".

In order to fulfill its commitment the Commission asked Member States, EEA and candidate countries to nominate an expert for a 2 year project to exchange good practices between Member States and produce policy recommendations. The main recommendation from the experts was:

It is fundamental to send a message that entrepreneurship may not end up as a "life sentence" in case things go wrong, otherwise it acts as an effective deterrent to entrepreneurship. For that Member States should:

  • Ensure that an honest entrepreneur is discharged and their debt fully settled in 3 years or less and that discharge is as automatic as possible.
  • Take decisive actions for a greater differentiation of honest and dishonest bankruptcies: assume in principle that all are honest and then identify those that are dishonest and prosecute/penalise them.
  • Implement solutions so that the costs of reorganisation for SMEs are lowered.
  • Make out-of-court procedures available for all types of debtors regardless of the amount that can be repaid by the debtor.
  • Guarantee that insolvency proceedings are adjudicated upon by specialist judges and that specialised training is available to judges and court officers adjudicating in or administering such proceedings.


The full document (12 pages) is accessible here pdf - 2 MB [2 MB]

  a second chance for entrepreneurs

 List of participating experts pdf - 58 KB [58 KB] .

Study 'Bankruptcy and second chance for honest bankrupt entrepreneurs'

Share: FacebookGoogle+LinkedInsend this page to a friend

Set page to normal font sizeIncrease font size by 200 percentprint this page