LEGAL STRUCTURES FOR SMALL BUSINESSES
This essay presents a chronological account of the various law reform projects that have affected small businesses in recent years. The essay focuses on small businesses for two main reasons. The first is that they are of vital importance to the UK economy and the second reason, which is linked to the first, is the extent to which recent law reform projects have focused on them. The Small Business Service of the DTI defines as ‘small’ a business with 50 or fewer employees. Over 99% of businesses in the UK are small and they account for 44% of non-government employment and 37% of turnover.1 In the purely corporate sphere 29.5% of companies fall within that definition of small.2 The Small Business Service of the DTI has said, ‘Most of the moderate growth in the business population between 1995 and 2000 has been in the number of ‘micro’ businesses employing fewer than 10 people and in the number of one-person companies’.3 This essay shows that, during the last 40 years, consideration of the problems encountered by small businesses has led to repeated mention of eight important issues. Not all of these issues are relevant to all small businesses in that some are run by sophisticated entrepreneurs who are not troubled by ignorance of the law, or ineptitude in running a business. The recurring issues are: (a) restriction of access to limited liability; (b) creation of a new form of limited liability corporate body; (c) burden of companies legislation relating to disclosure; (d) difficulties in sourcing finance; (e) ignorance as to the effect of company law; (f) general difficulties in running businesses; (g) simplification and restructuring of companies legislation; and (h) reform of partnership law.