Companies going into administration

UK companies entering administration reaches highest level for ten years

Furthermore, insolvency practitioners have noticed that the vast majority of these are now occurring in the SME sector, with large scale collapses such as that of MG Rover in 2005 becoming increasingly rare.

The final quarter of 2006 was particularly bad for business failure, and saw a surge of companies filing for administration, more than double the number that had done so during the equivalent period in 2005. For the year as a whole, the number of administrations totalled 3,683, an increase of 56.3 per cent.

While the number of receiverships continues to decline as a result of the introduction of the Enterprise Act in 2003, other types of corporate insolvency have all slightly increased, with compulsory liquidations up 6.2 per cent, voluntary liquidations up 3.7 per cent and voluntary arrangements up 2.5 per cent.

The highest proportion of business failure occurred in London, Scotland and Wales, where administration orders shot up by 243 per cent, 88 per cent and 83 per cent respectively. The areas to experience the least amount of business failures were the North East, the City of London and Northern Ireland. These three regions were also the only areas of the UK where the number of insolvencies actually decreased during 2006.

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