Share capital impact on the barrier of seriousness and gender equality -A study made after the reduction of minimum share capital

Abstract

Background and discussion: Many countries including Sweden seek to increase entrepreneurship by reducing the administrative burden for small business owners. On first of April 2010, the minimum capital required for setting up a private limited company in Sweden was lowered from SEK 100 000 to SEK 50 000. The reduction has begun a discussion of whether this is good or not. While the purpose of the reduction was to encourage entrepreneurship, some parties argue that a limited company is not always the best corporate form for all entrepreneurs. There is also an ongoing debate about female entrepreneurship where statistics show that more men than women set up an enterprise but that women are slowly approaching the same level as men. Purpose and contribution: Our purpose with this thesis is to investigate the relation between the reduction of minimum share capital and the barrier of seriousness. We also aim to investigate the effects on gender equality caused by the reduction. Our thesis provides new knowledge, which can be used in practice for future change in legislation of minimum share capital. Our thesis can give an indication of what a future reduction may entail when it comes to the barrier of seriousness and gender equality. Therefore, our study is of both empirical and practical relevance. Research question: To what extent is it possible to identify differences in the barrier of seriousness and effects in gender equality after the reduction of minimum share capital? Methodology: Empirical investigations in the shape of qualitative interviews with four respondents have been made. The results were then analysed based on a theoretical framework on whether the seriousness among entrepreneurs has changed since the reduction of minimum share capital and also if there are any up to the present unidentifiable relations. The theoretical framework and the empirical study are discussed with our personal reflections in section 7. Empirics and conclusions: Insolvency is not directly linked to the reduction of minimum share capital and the barrier of seriousness has not been lowered since the reduction either. Neither the number of balance sheets for liquidation purposes nor the number of bankruptcies has increased. Finally, we have not found a significant affect in gender equality caused by the reduction.