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Bankruptcy and second chance

Bankruptcy and second chance

Even though bankruptcy is not uncommon, the stigma and practical difficulties faced by formerly bankrupt entrepreneurs often deters them from starting new ventures. Moreover, many Europeans fear the consequences of failure enough to deter them from setting up their own business in the first place. The Commission develops tools to help entrepreneurs assess their performance and identify problems to be solved.

The European Commission’s actions

  • the Commission recognises that bankruptcy is a serious matter. Genuinely talented entrepreneurs who went bankrupt should have the opportunity to try again and create wealth and jobs;
  • the Competitiveness Council in May 2011 made a recommendation to limit the discharge time and debt settlement for honest entrepreneurs after bankruptcy to a maximum of three years by 2013;
  • the Commission monitors and develops this policy framework by setting Second Chance as a policy priority and one of the principles of the Small Business Act (principle 2).

Support tools for entrepreneurs

The Commission has developed an early warning tool that helps small and medium-sized enterprises (SMEs) make a preliminary assessment of their performance and provides tips for improvement. While this tool cannot solve problems, it can help businesses identify potential sources of difficulty in time to seek further information, advice, or remedies.

Supporting documents

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