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Company Insolvencies Start to Decrease
Written by on 12 November, 2009Company insolvencies are on the decrease in the United Kingdom, according to the latest statistics from The Insolvency Service. The most recent report by the government body shows a 4.7% decline of company insolvencies in the third quarter of 2009 when compared to the previous quarter.
During the third quarter of 2009, there were a total of 4,716 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales on a seasonally adjusted basis. Although this is a significant decrease on the second quarter of 2009, the figure is still an increase of 14.6% when compared to the same period last year.
The figure of 4,716 was made up of 1,301 compulsory liquidations and 3,415 creditors’ voluntary liquidations. When compared to the second quarter of 2009, this translates into a 9.8% decrease in compulsory liquidations and a 2.6% decrease on creditors voluntary liquidations.
However, when compared to the same period last year, compulsory liquidations are down by 12.9% on the third quarter of 2008 while the number of creditors voluntary liquidations were up by 30.2%.
The report by The Insolvency Service stated that in the twelve months ending Q3 2009, approximately 1 in 114 active companies went into liquidation. This figure is up slightly when compared to the previous quarter of 2009, in which approximately 1 in 120 active companies went into liquidation.
In addition 1,578 other corporate insolvencies were registered in England and Wales during the third quarter of 2009. These statistics represent an increase of 9.3% when compared to the third quarter of 2008 and consisted of 410 receiverships, 974 administrations and 194 company voluntary arrangements.
The Insolvency Service also reported on the insolvency statistics from the second quarter of 2009 for Northern Ireland and Scotland, which had also shown a decrease in the amount of companies going into liquidation. When compared to the second quarter of 2008, company liquidations decreased by 3.1% in the second quarter in Scotland, whereas in Northern Ireland, company liquidations had decreased by 38.6%.
The Insolvency Service is the government body that authorises and regulates the insolvency profession. They produce quarterly reports on the figures for both personal and company insolvency for the United Kingdom.
While the statistics for the third quarter showed a decrease in company insolvencies, the statistics for personal insolvencies were quite a contrast, reporting a continuing increase. The third quarter revealed personal insolvencies were up 28.2%, with a total of 18,347 bankruptcies, 12,390 Individual Voluntary Arrangements (IVAs), and 4,505 Debt Relief Orders (DROs) recorded.
Although the UK remains in uncertain economic times, these new figures show a significant decrease in company insolvency following the unprecedented levels of insolvency in the past year. Whether this figure will continue to decrease will depend largely on the credit markets.
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