More businesses going bust in 2010

2010-07-28 00:00

THE South African business community continued to come under tremendous strain during the first half of 2010, according to the latest statistics of liquidations.

A total of 379 liquidations were recorded in June 2010, representing an increase of 21,9% when compared to 311 in June 2009.

Liquidation refers to the winding-up of the affairs of a company or CC when liabilities exceed assets. It can be resolved by voluntary action or by an order of the court.

Statistics South Africa said this week that the total number of liquidations recorded for the first six months of 2010 increased by 5,8% from 1 951 during the first six months of last year to 2 065 during the same period in 2010.

According to Stats SA, two sectors contributed to about three-quarters of liquidations during the first half of this year.

“The highest numbers of liquidations during the first six months of 2010 were related to businesses in the financing, insurance, real estate and business services industry [953 cases or 46,2% of liquidations] and the wholesale and retail trade, catering and accommodation industry [584 cases].”

The total number of liquidations recor­ded for 2009 surged by 25,2% from 3 300 in 2008 to 4 133 in 2009, mainly as a result of the recession.

Stats SA said the total number of insolvencies for the first five months of this year dropped by 24% from 2 049 in the corresponding period last year to 1 558 this year.

It said the number of insolvencies in May 2010 also decreased, by 26,8% year on year to 397.

Insolvency — or bankruptcy — refers to an individual or partnership which is unable to pay its debt and is placed under final sequestration.

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