Two figures on top of puzzle pieces shaking hands

 

The bedrock of a sustainable economy needs the right legal models in place. Policymakers need to ask the right questions, and understand the implications of the answers, when they’re making changes to the laws regulating legal form.

It’s essential for the health and sustainability of businesses that the right legal frameworks exist to enable everyone to flourish. Fostering trust and managing risk are essential elements in creating a secure environment for entrepreneurs, investors and customers alike, and a key part of the legislator’s role is to ensure that the legal forms available properly reflect the needs of the contemporary economy.

Five enabling strategies for governments to consider as it approaches each theme: Enabling business to be the driver of society's prosperity; Maintaining stability and confidence; Supporting an ethical approach to business; Providing encouragement for business enterprise; Dispute resolution mechanisms for business; Five enabling strategies for governments to consider as it approaches each theme

 

Having the right businesses operating helps government in two ways – by deepening the pool of talent on which procurement processes can draw, and by providing social support and community benefits that the state might otherwise have to fund directly. But to make the most of the talents and resources deployed by entrepreneurs, governments need to enable, encourage, protect and regulate them.

Government has several roles to play in helping new business get off the ground. Most fundamentally, and uniquely, it is part of government’s role to make the legal forms available through legislation. Government alone can set the boundaries of permissible activities under the law, and adjust the rights and obligations of businesses and their stakeholders.

Figure running with puzzle piece that fits in gap between two ledges

 

But beyond this, there can be a role for government in educating people about the available options, and helping them to make the most of them. Many jurisdictions offer community interest vehicles or structures designed to promote employee ownership and engagement, but take-up of them can often be low. Once businesses are aware of the options, the availability of mentoring schemes, trade networks and grants, can significantly improve the chances of a long and fruitful life for the venture.

Although doing business is a fundamental part of society, getting started can often be very risky for entrepreneurs. The challenges facing the entrepreneur are not just about choosing the right form, but also about exploiting it properly and making the most of its characteristics.

ACCA author, Jason Piper