A critical analysis of the Small Business Act (Cap. 512 of the Laws of Malta) and the legal implications of starting and growing a small business in Malta

Abstract

The Small Business Act for Europe (SBA) was an uncharacteristic legal document, in that it was a non-binding Act in nature, and yet was still ratified in Malta, through the coming into force of the Small Business Act for Malta. Drafted at a time when a financial crisis was already looming over Europe’s future, the Act sought to strengthen and boost the European SME policy across all Member States. Small and Medium Enterprises accounted for over 99% of the business industry in Europe, and were the greatest contributors to the continent’s employment, Gross Domestic Product and Added Value. Small and Medium Enterprises (SMEs) were at the heart of the economy, and provided more to society than larger enterprises. 2008 was the year in which the European Commission decided to firmly acknowledge this fact, and set out on a mission to create a robust policy, which catered exclusively for SME needs and requirements across the EU. This dissertation seeks to investigate the results obtained through such policies, mainly by carrying out a detailed analysis of the Small Business Act. It provides a historical background and institutional context to the drafting of the SBA. Contributions from all relevant sources are analysed together with an examination of the salient elements, which formed the main principles of the Act. The dissertation seeks to give a thorough breakdown of the ten principles found within the SBA together with an explanation of the main policy actions recommended within each principle. Research conducted on the materialization of the SBA leads to a better understanding of the Small Business Act for Malta (SBA(M)), which entered into force in 2011. A detailed study on the main sections of Chapter 512 of the Laws of Malta follows, with the purpose of providing a thorough investigation into the effects resulting from such provisions on the SME industry in Malta. A critical analysis of the outcomes is also discussed, together with suggestions and recommendations, which could be carried out in the drafting of a revised version of both the SBA and the SBA(M).