The Productivity Commission recently released a draft report (The Report) into Business set-up, Transfer and Closure.

The report examines the barriers to business starting up and exiting and identifies options for reducing those barriers with a view to increasing efficiency and promoting economic growth.

In the report Commissioner Dr Warren Mundy says:

An evolving and expanding stock of businesses is the core to a growing economy”

he further commented that:

whilst the rate of new business establishment in Australia is relatively high, very few businesses can be characterised as innovators.

The report makes a number of recommendations to improve the environment for the setting up and closure of businesses including:

• The introduction of a crowd sourced equity arrangement to improve financing options of new small businesses;
• Formal restructuring of companies through voluntary administration should be possible where a company is not yet insolvent;
• A simplified liquidation process that limits the time expended on recovering assets of little value; and;
• The alteration of the exclusion period and restrictions placed on bankrupts from 3 years to 1 year.

The Commission is currently seeking written submissions on the report which may be made to the Commission by 3 July 2015.

For more information please contact ERA Legal.