Promoting Entrepreneurship - the New Company Law Agenda?

Abstract

Promoting entrepreneurship is high on the agenda both at European and national levels. This is reflected in a number of company law initiatives which have mainly been focused on creating easier and cheaper access to limited liability. However, the question is whether it is possible to promote entrepreneurship through company law reforms and, if so, what should the content of such reforms be in order to meet the needs of entrepreneurs. These questions are addressed in this article in which the analysis takes its point of departure in a new study of Danish entrepreneurs and the company law reforms at national and EU levels. The analysis confirms the importance of the capital requirements, formation procedures and costs, and further insight is obtained into the level of minimum capital and costs that is regarded as acceptable. It is also concluded that entrepreneurship can be promoted by introducing more flexible rules for company management and by ensuring that the right default rules apply. Several examples are given of how such reforms can be carried out.

Keywords: company law, promoting entrepreneurship

JEL Classification: K22