Latest research from the Accountancy in Bankruptcy (AiB) shows the number of Scottish businesses in receivership or liquidation is falling yet again. Q2 2014 figures reveal there is a 16.4% decline in insolvencies since the first quarter and an overall drop of 22% since the same time last year.
There were 209 businesses in liquidation or receivership compared to 250 the quarter before. It is the lowest number since the beginning of 2013 when the number was recorded at 184 corporate insolvencies.
Out of the 209 businesses, 152 were compulsory liquidations and 56 were Creditor Voluntary Liquidations (CVLs), indicating a majority of companies had completely run out of money (and left it far too late) before being wound up by the court. There was one receivership.
Bryan Jackson from BDO in Scotland commented, “The fall in corporate insolvencies in the third quarter reflects the relatively benign economic circumstances in which we are operating. The low interest rates, the falling energy costs, and the increase in demand have all lead to a period when many businesses can start to contemplate growth once more”.
While there is a fall in company insolvencies, Scottish businesses should ensure financial problems aren’t left too late as compulsory liquidation should always be considered as the ‘last resort’ option. There are other rescue and restructure methods available, like a Company Voluntary Arrangement or administration.
Scottish Business Matters
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