Micro, small, and medium enterprises (MSMEs) are among the largest commercial users of insolvency systems. MSMEs are a significant part of the global economy - and just as there are large numbers of MSMEs, there are large numbers of MSME insolvencies. However, there are a very few specialized legal regimes for MSME insolvency; most jurisdictions treat MSME insolvencies the same as for other corporate entities, or conversely, natural persons, despite MSMEs' unique attributes. This report considers the specific challenges of insolvent MSMEs (including the difficulties of defining MSMEs and distinguishing them from large corporate entities); reviews and analyzes how legislation in different jurisdictions deals with the challenges of MSME insolvency; and considers if existing international standards are sufficient to address MSME insolvency.

Micro, small, and medium enterprises (MSMEs) are among the largest commercial users of insolvency systems. MSMEs are a significant part of the global economy - and just as there are large numbers of MSMEs, there are large numbers of MSME insolvencies. However, there are a very few specialized legal regimes for MSME insolvency; most jurisdictions treat MSME insolvencies the same as for other corporate entities, or conversely, natural persons, despite MSMEs' unique attributes. This report considers the specific challenges of insolvent MSMEs (including the difficulties of defining MSMEs and distinguishing them from large corporate entities); reviews and analyzes how legislation in different jurisdictions deals with the challenges of MSME insolvency; and considers if existing international standards are sufficient to address MSME insolvency.

Micro and small enterprise (MSME) insolvency is particularly likely to impact not only the business, but also the personal and family life of the owner-operator(s) of such businesses, raising particular concerns that apply much less frequently in the context of corporate insolvency. This report refines and expands on the earlier deliberations of the Insolvency and Creditor or Debtor Regimes Task Force (ICR Task Force) regarding the optimal approaches for treating MSME insolvency. As a matter of terminology, it should be stressed that the term MSME in this report is intended to cover both individual natural persons and juridical business entities, unless specifically stated. This means that the size of an MSME differs from country to country and even industry to industry, making comparisons between jurisdictions and global standard-setting difficult. The scope of this report is designed to be nonprescriptive and dynamic across countries and contexts. Accordingly, this report aims to consider rescue and restructuring for all viable MSMEs, with the objective of preserving individual entrepreneurial initiative, including in the context of liquidation, and of preserving businesses that can continue to operate and add value in an economy. The final section of the report starts the process of examining the ICR Principles in light of the proposals made in this report.

Micro and small enterprise (MSME) insolvency is particularly likely to impact not only the business, but also the personal and family life of the owner-operator(s) of such businesses, raising particular concerns that apply much less frequently in the context of corporate insolvency. This report refines and expands on the earlier deliberations of the Insolvency and Creditor or Debtor Regimes Task Force (ICR Task Force) regarding the optimal approaches for treating MSME insolvency. As a matter of terminology, it should be stressed that the term MSME in this report is intended to cover both individual natural persons and juridical business entities, unless specifically stated.This means that the size of an MSME differs from country to country and even industry to industry, making comparisons between jurisdictions and global standard-setting difficult. The scope of this report is designed to be nonprescriptive and dynamic across countries and contexts. Accordingly, this report aims to consider rescue and restructuring for all viable MSMEs, with the objective of preserving individual entrepreneurial initiative, including in the context of liquidation, and of preserving businesses that can continue to operate and add value in an economy. The final section of the report starts the process of examining the ICR Principles in light of the proposals made in this report.

This book reconsiders the treatment of distressed Micro, Small and Medium Enterprises (MSMEs). Recognising that insolvency systems traditionally suit larger enterprises, and that they do not always apply neatly to smaller entities, the book proposes a 'modular' approach designed to facilitate the treatment of smaller enterprises in distress.

Insolvency law is broadly recognized as an essential tool in well-functioning economies. A balance of mechanisms that allow for timely and effective liquidation, but also for a “fresh start” for individual entrepreneurs and the rehabilitation of viable businesses, tends to enhance creditor recoveries and lender confidence. This study examines the treatment of micro, small and medium enterprises (“MSME”) under the Canada Bankruptcy and Insolvency Act. It undertakes a qualitative examination of 200 business insolvencies in 2015, in order to try to understand the reasons for insolvency, types of debt, and outcomes of proceedings. The study reports on the results of a survey of 53 licenced insolvency trustees and 10 loan officers across Canada, in terms of their experience with respect to the barriers to small and medium enterprise insolvency. It suggests a series of legislative changes, including creating a streamlined approach to the insolvency of micro and small businesses (“MSE”), so that MSE can access formal proceedings; a deemed approval process where creditors have received meaningful notice and do not object to the proposal; increased authority for the insolvency professional, reducing the administrative burden and cost of multiple court appearances; and other measures to enhance access to insolvency system.

This book explains how and why insolvency law in emerging economies needs to be reinvented. It starts by examining the importance of insolvency law for the promotion of economic growth as well as the similarities and divergences in the design of insolvency law around the world. The central thesis of the book is that insolvency law in emerging economies fails to serve as a catalyst for growth. It is argued that this failure is mainly due to the design of an insolvency legislation that is not tailored to the market and institutional environment generally existing in emerging economies. The book also provides a critical analysis of the design of insolvency law in many advanced economies where the insolvency system has proven to be unattractive for debtors, creditors or both. Therefore, in addition to suggesting a new insolvency framework for emerging economies, this book ultimately invites readers to rethink insolvency law.