By Diane Chapman, current student of the University of Sydney Business School MBA program
I have just had the opportunity to participate in UNCITRAL’s newest Working Group for Micro-Small and Medium Enterprises (WGI) in Vienna in their autumn. Here, countries and their delegations convened with international experts and NGOs to collaborate on new international standard law for incorporation and registration of MSMEs. This international mandate is currently being developed to enhance access for micro and small businesses in developing countries to enable them participate in more formalised and international markets.
Traditional business models have presented barriers for MSMEs, as their establishment has been expensive and they generally face prohibitive compliance costs, over regulation and high relatively liability in cases of insolvency. In response to the last Working Group session, a paper was prepared to analyse best practices around the world for business registration and incorporation. Research found that standard registration forms and fees, minimum capital requirements, unique business identification numbers and minimal judicial or notarial involvement in registration were highly important.
Ex-ante and ex-post checking requirements for business registration and incorporation were discussed at length at this new session, and countries were fairly divergent on this issue, along with use of notaries and level capital requirements to incorporate.
Participation in this amazing new work with the United Nations is currently being undertaken by around 48 nations. The enhanced access of these laws will provide a wide-reaching and internationally recognised method of engaging in business for the benefit of developing economies, with particular focus on small to medium sized enterprises being formally recognised through international standards and providing them with the benefits of legal validation and enhancement of rights, engagement and methods of enforcement.
I am looking forward to attending the third session of the MSME Working Group at the United Nations Headquarters in New York this coming April, and the subsequent experts meeting where we will begin preparing the first draft of the new international laws for incorporation and registration of MSMEs. I hope to share the experience and developments as they unfold.