"More often than not, entrepreneurs will fail several times before they make it and will usually learn a lot in the process. To help these entrepreneurs to succeed will require a cultural shift. We need to encourage Australians to take a risk, leave behind the fear of failure and be more innovative and ambitious.

Concerns over inadvertent breaches of insolvent trading laws are frequently cited as a reason early stage (angel) investors are reluctant to get involved in a startup. Our current insolvency laws put too much focus on penalising and stigmatising the failures..."

Australian Government, The National Innovation and Science Agenda, http://www.innovation.gov.au/

In relation to the current Australian law regarding a director's liability for insolvent trading, prepare a submission to the Australian Government that:

a) critically analyses the statement that "[o]ur current insolvency laws put too much focus on penalising and stigmatising the failures"; and

b) describes in detail how you would reform the current law and why.

HINTS FOR ANSWERING THE SPECIFIC QUESTION

Notes:

1. You need only consider the director's duty to avoid trading while insolvent. You need not consider other laws relating to insolvency.

2. You may not believe that any law reform is warranted. This can be an appropriate answer to question (b), but you must justify your answer.

3. Public submissions to government do not need to follow any particular format. You can therefore use any format you wish, as long as you answer the question using evidence, analysis and argument.

4. This is a research assignment, so proper citation of sources is essential. You must follow the referencing guidelines set out on Moodle. Note you can choose between Oxford (footnote) or Harvard referencing styles, but you must include PAGE NUMBERS.

GENERAL GUIDE

You do not need to consider any laws that fall outside the scope of this course. You do not need to consider any laws other than those applicable in Australia.

Marking Guide:

Marks will also be deducted for poorly structured answers and evidence of absence of proof-reading the paper before submission (see Moodle).

Students are expected to discuss concepts from (and not merely cite in bibliography) relevant journal articles, primary materials (cases and legislation), industry publications and publications other than your prescribed textbook to enhance quality of answer and mark (just quoting from the textbook won't get you very far). See Moodle for some useful links to searching tools - note that Google is not an effective search tool for this type of research as much of the relevant material sits behind paywalls. The UNSW library collection is much more useful as it has extensive subscriptions to legal journals and other materials. The UNSW Learning Centre and the ASB's Educational Development Unit can also assist with writing and research skills.

You need to show evidence of research: read and follow the style guide carefully. We expect you to show us that you have read and critically analysed other people's published works: but you must show us this by use of proper referencing (including PAGE NUMBERS). More information about referencing and plagiarism can be found in the style guide available on Moodle. Failure to reference properly is not only plagiarism, which may constitute academic misconduct, but it also looks like you have failed to do any/sufficient research.