The Enterprise Act 2003, due to come into force on 15 September, will introduce a number of positive changes that will make the rescue of an insolvent company more straightforward than in the past, says Malcolm Shierson, partner within Grant Thornton's Recovery and Reorganisation practice.
However, the Act's objective to promote entrepreneurship by getting company directors and sole traders back on their feet, following a personal bankruptcy process, is ill-directed as it will only benefit a small number of entrepreneurs. The new Act will potentially open the floodgates to thousands of bankruptcy applications from individuals with consumer debts, who, without fully realising the very serious implications, will see bankruptcy as a quick and easy way to wipe the slate clean of debts, warns Mike Gerrard, a personal insolvency specialist within the practice.
