The European Commission has proposed a new initiative designed to prolong the longevity of family-owned small- and medium-sized firms in the EU by encouraging member states to remove barriers to the transfer of ownership, obstacles which all too often have become insurmountable for many small companies in Europe.
According to the EC, one third of EU entrepreneurs, mainly those running family enterprises, will withdraw within the next ten years as businessmen age, and the new initiative aims to ensure that otherwise economically viable concerns do not hit the buffers unecessarily.
"Thousands of economically sound businesses, mainly small and medium-sized enterprises (SMEs), disappear every year because they fail to overcome the difficulties involved in the transfer of ownership," the European Commission said in a statement issued last week.
It is thought that transfer of ownership problems affect an estimated 690,000 businesses employing 2.8 million people each year. Many of the transferable businesses do not find a successor.
In 1994 the Commission published proposals to improve the conditions for business transfers, but the EU's executive body is of the view that insufficient progress has been made to improve conditions for Europe's small firms.
“It is simply unacceptable that we are losing thousands of healthy companies and jobs a year because the transfer of business is too cumbersome," noted Commission Vice President Günter Verheugen, who is responsible for enterprise and industry policy.
"We want to upgrade the economic environment and support measures for business transfers," he added.
The EC initiative aims to: ensure that member states' tax systems are transfer-friendly; provide adequate financial conditions; raise awareness; consider 'soft factors' such as ensuring that transfers are planned well in advance and support mentoring is in place; and organise transparent markets for business transfers.
.Tags: Italy | Italy
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