ACCA (the Association of Chartered Certified Accountants) is calling on the UK government to put legal structures in place to support small businesses in its report Building the legal framework to help business succeed.
The report explores the following four key elements entrepreneurs and policymakers must consider:
- Realising the returns: Success can mean different things to different businesses. The founder’s goals can range from financial security to ‘giving something back’, and increasingly entrepreneurs are looking to be measured on social and environmental goals alongside the monetary returns.
- Investing into the business: regardless of the owners’ final aims, every business needs investment, and most will need more than the founders have saved. How that money is raised, and who from, will have wider implications for the rest of society. As technology changes the ways that can happen, regulators must adapt to new structures.
- Legal characteristics and regulation: The defining legal characteristic of a business form will be whether the business has a separate legal identity from its owner. Who makes the business decisions, who will be liable if things go wrong, and for how much, are vital considerations for those in the business and anyone who might buy from, sell to or be employed by it. The frameworks need to be effective, efficient and trusted.
- Administrative requirements: Aspiring entrepreneurs are often most concerned about the ease of starting up and the burdens of registration and the like. Advisers and existing business owners tend to be more concerned about the long term running costs of annual filings and reporting requirements. Policymakers though must address both, striking a balance between rigour and efficiency.