Top Service News
Business Insolvencies Round-up 2022
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A round-up of last year’s official business insolvencies, across all sectors, by Emma Reilly, MD of specialist credit referencing and debt recovery agency, Top Service Ltd:
* 50 in every 10,000 active limited companies entered insolvent liquidation in 2022. This was an increase from the 33 per 10,000 active companies that entered liquidation in 2021, and was higher than the 42 per 10,000 in 2019 (pre Covid).
* The company liquidation rate in 2022 was the highest liquidation rate since 2015, but was lower than the recessionary peak of 95 per 10,000 in 2009.
* The total number of company insolvencies registered in 2022 was 22,109, which was the highest number since 2009 and 57% higher than 2021.
* The increase compared to 2021 was driven by the highest annual number of Creditors’ Voluntary Liquidations (CVLs) for many years. CVLs occur when the directors of a company appoint a licenced insolvency practitioner to formally close down their insolvent company. They usually do this as a result of pressure from creditors.
* The annual number of Compulsory Liquidations was higher than the record low number in 2021 but remained below pre-pandemic levels. Compulsory Liquidations occur when a creditor issues a Winding-up Petition to the courts and then the court makes an order to wind the company up. Many of these petitions are issued by HMRC for unpaid taxes.
* Administrations were higher than 2021 but lower than pre-pandemic levels. A company can appoint a licenced insolvency practitioner to act as an Administrator if there is a chance that the company can be rescued as a ‘going concern’ or if there is likely to be a better return to creditors than in a liquidation.
* Corporate Voluntary Arrangements were similar to 2021 but lower than pre-pandemic levels. These arrangements are made with creditors to allow the company to continue to trade. Creditors vote as to whether they are prepared to accept a lower settlement figure which is usually paid back over an agreed period of time.