A GJ Advances article.

Abstract

There are three types of rules applicable to business start-ups: entity formation rules, general operational start-up rules, and activity specific rules. Some types of activities are not subject to activity specific rules. A firm that is engaged in activities that are not subject to activity specific rules can begin operating when it has complied with the entity formation rules and general operational start-up rules.

This paper benchmarks the impact of legal rules on start-ups in Hungary, a recent EU entrant, and Washington State, one of the states comprising the United States, using the legal rules that existed in these jurisdictions during 2003. It then compares the benchmarks in the two jurisdictions with each other and with the benchmarks produced by the Centre for Strategy and Evaluation Services (CSES) for the European Commission during 2001- 2002. The comparison of the Hungarian benchmarks with the CSES benchmarks suggests that the harmonization of Hungarian law with the law existing in the countries of the pre-May, 2004 EU, a process that Hungary underwent as a condition of membership, did not create a set of legal rules whose impact on start-ups is similar to the impact of the rules in the pre-accession EU countries. Additionally, a comparison of the Hungarian benchmarks and the benchmarks in the pre-May 2004 EU suggests that it is easier to start a business firm in at least one of the states comprising the United States than in Hungary and almost all of the countries comprising the pre-May, 2004 EU.

Originally published in Global Jurist Advances.

Recommended Citation

Spall, Hugh and Szerb, Laszlo (2004) "The Impact of Legal Rules on the Time and Capital Necessary to Organize a New Business Entity: Hungary, the United States (Washington State) and the Countries of the Pre-Accession EU Compared," Global Jurist Advances: Vol. 4 : Iss. 1, Article 3.
Available at: http://www.bepress.com/gj/advances/vol4/iss1/art3