According to global business solutions company Experian, the number of UK limited companies failing in 2003 fell by 9.4 per cent compared with 2002. In 2003, there were a total of 17,522 corporate failures – 1,825 fewer than the 19,347 recorded in 2002. In the fourth quarter of 2003, 4,159 limited companies failed compared with 5,045 in the fourth quarter of 2002, resulting in a fall of 17.6 per cent.
Phil Cotter, managing director of Experian’s Business Information division, comments: “The introduction of new insolvency rules during 2003 to help make it easier for UK businesses to get out of financial trouble has been reflected in the overall decline in the number going to the wall in 2003. Under the new rules, banks are no longer able to appoint a receiver; they can only appoint an administrator and it is now easier for companies to put themselves into administration to gain breathing space from their creditors and put measures in place to help prevent corporate failure.
“The fall in corporate failures is very welcome, but, as the figures highlight, a large number of companies are still failing each year and organizations should ensure that they have good credit management practices in place to protect themselves against the risk of non payment.”
Only eight out of the 34 industries surveyed by Experian recorded an increase in business failures in the fourth quarter of 2003. Among the most significant improvements among the 25 industry sectors where failures fell in 2003 were Printing, Paper and Packaging – down from 56 to 37.
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