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“More often than not, entrepreneurs will fail several times before they make it and will usually learn a lot in the process. To help these entrepreneurs to succeed will require a cultural shift. We ne

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“More often than not, entrepreneurs will fail several times before they make it and will usually learn a lot in the process. To help these entrepreneurs to succeed will require a cultural shift. We need to encourage Australians to take a risk, leave behind the fear of failure and be more innovative and ambitious. Concerns over inadvertent breaches of insolvent trading laws are frequently cited as a reason early stage (angel) investors are reluctant to get involved in a startup. Our current insolvency laws put too much focus on penalising and stigmatising the failures…&rdqu...

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“More often than not, entrepreneurs will fail several times before they make it and will usually learn a lot in the process. To help these entrepreneurs to succeed will require a cultural shift. We need to encourage Australians to take a risk, leave behind the fear of failure and be more innovative and ambitious. Concerns over inadvertent breaches of insolvent trading laws are frequently cited as a reason early stage (angel) investors are reluctant to get involved in a startup. Our current insolvency laws put too much focus on penalising and stigmatising the failures…” Australian Government, The National Innovation and Science Agenda, http://www.innovation.gov.au/ In relation to the current Australian law regarding a director’s liability for insolvent trading, prepare a submission to the Australian Government that: a) critically analyses the statement that “[o]ur current insolvency laws put too much focus on penalising and stigmatising the failures”; and b) describes in detail how you would reform the current law and why.

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Introduction:
For entrepreneurs starting their business insolvency has become as major problem after they fail in the new venture. The Australian law also does not seem to encourage the entrepreneurs to innovate irrespective of high chance of failure in a new venture. The current assignment therefore, focuses on understanding the current insolvency law in order to understand directors’ liability for insolvent trading. Further, a detail analysis regarding the ways by which the current law can be reformed is also taken into consideration in the analysis of this assignment.

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