A new legal from for small business?

Abstract

An increasingly common complaint voiced by entrepreneurs and text writers alike nowadays is that the Companies Act has become too complicated and, in many ways, inappropriate, for a small business operated by one or a few participants. Many commentators argue that the solution does not lie in adjustments to the Companies Act but in the establishment, in a separate Act, of a new legal form for small business. This idea is by no means new; it has been raised in the UK as well as in the USA. In both countries active attention is being given to providing a suitable legal form for small business. In Malta, talks and political statements on the economic importance of small and medium enterprises (SMEs) are the order of the day. However, in reality, no serious investigation has ever been conducted in order to check whether SMEs are, in fact, well-served by the obtaining legislative set-up. In this dissertation, I intend discussing the merits and demerits of the present legislative framework applicable to SMEs with a view to ascertaining whether a new form of legal structure is, indeed, necessary or whether some fine-tuning to the structures already available might suffice. Naturally, throughout the discussion, continuous reference will be made to the overseas experience and to the developments taking place there, particularly, South Africa, Australia and the UK.