Insolvency regulations strain businesses

The need for business advice may become even greater if insolvency regulation is subject to further changes, one group has discovered.

Insolvency trade body R3 found that many companies are questioning plans to give unsecured creditors more of a say.

"The degree of increased regulation proposed is disproportionate and counter to government policy to reduce red tape," noted R3 president Frances Coulson.

She emphasised that the changes are likely to lead to reduced returns for creditors, while "undermining what is good and sensible in the current system".

These comments follow findings from NatWest and Smarta.com, which revealed that nearly a third of start-up businesses do not feel they have the right tools at their disposal in order to be successful.

Furthermore, 61 per cent that cashflow posed major problems, while 40 per cent said they had over-estimated potential sales during their first year of trading.


Published on: May 26, 2011

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