BANKRUPTCY - A POSSIBLE NEW START FOR THE SMALL BUSINESS?

• Main Authors: LAURA GIURCA VASILESCU, ANA POPA
• Format: Article
• Language: English
• Published: University of Petrosani 2010-01-01
• Series: Annals of the University of Petrosani: Economics
• Subjects: bankruptcy; financing; SMEs; warning signals; failure; financial crisis
• Online Access: http://www.upet.ro/anale/economie/pdf/20100112.pdf

Many factors (internal and external) can make a business vulnerable. In the context of the international financial crisis, the firms, and especially the small and mediume enterprises (SMEs) have to face new challenges. Smaller businesses are particularly prone to financial difficulties as they often lack resources to adapt to the changing market conditions. Very often the business distress or even business failure is not yet sufficiently understood as a normal economic development and an opportunity for a new start. In order to take the full potential of business in Europe, should be created the background that genuinely talented entrepreneurs have every opportunity to get another second chance. The European Commission lays out proposals to actively help businesses at financial risk and prevent bankruptcy. In the same time, the national insolvency systems should provide more options for restructuring and rescue. Thus, EU supports simpler and faster procedures for bankruptcy and encourages giving a second chance to honest entrepreneurs who have failed.