The Insolvency Service recently published statistics that show a rise in corporate insolvencies in England and Wales, during the first quarter of 2017.
Compared to the same time last year, corporate insolvencies have increased by 5.3% and have increased by 4.5% from the last quarter of 2016. These insolvency numbers, despite the increase, are still close to record lows but the beginning of the rise in numbers is bound to worry some business owners.
There are some positives that business owners can take comfort in, such as:
- a growing economy
- creditor forbearance
- low interest rates.
However, there are some negatives that could explain the recent rise in corporate insolvencies, for example:
- the Brexit referendum caused the pound’s value to fall which will have affected importers
- the introduction of the National Living Wage
- the auto-enrolment of pensions
These factors will have challenged smaller companies and could place more in jeopardy in the future.
Adrian Hyde, president of insolvency and restructuring trade body, R3, commented:
“It’s worth noting, however, that insolvencies usually rise in the first three months of the calendar year as many companies come to the end of their financial year and have to make some difficult decisions. Insolvency numbers should be watched closely over the next year to see whether recent rises are just a blip or the start of a new upwards trend.”
What to do if your company is insolvent
If you’re a business owner who is having problems with your company and your business is insolvent, we can help you.
We can advise you regarding the best possible options for you. A Creditors’ Voluntary Liquidation (CVL) is a popular option because it allows you to close your insolvent company, keep your business reputation intact and acknowledge your legal duties to your creditors.
If you let your company be placed into Compulsory Liquidation there could be some serious ramifications for you personally and for your future business activities.
To find out how Clarke Bell can help you, contact us for free advice on 0161 825 0154.