In the first quarter of 2012, according to the Insolvency Service, there were 4,303 liquidations in total in England and Wales. This is an increase of 0.2% on the previous quarter and an increase of 4.3% in the same period in 2011. There was a reduction in the number of companies being wound up by the court with the figure being down 11.2% on the previous quarter and down 11.1% on the corresponding quarter in 2011.
The total number of other insolvencies in this period which includes receiverships, administrations and company voluntary arrangements decreased by 1.8% in comparison to the same period in 2011. It is to be noted however that more big name high street chains are entering into administration with latest reports suggesting that Clinton Cards is next to follow.
In the 12 months ending with the first quarter of 2012, 1 in 138 active companies went into liquidation which was unchanged from the previous year.
Professional advice should be sought as soon as it becomes apparent that a company is facing financial distress. When times are tough the need for company directors to keep a close eye on financial reports relating to the business is an urgent one. As a company director, if there is any doubt at all as to whether the company is solvent or whether it can survive a period of insolvency, specialist insolvency advice must be obtained.
By commercial solicitor, Nicola Whittle