The latest company liquidation figures from the Insolvency Service show mixed fortunes for British businesses in the fourth quarter of 2012.
On a seasonally adjusted basis, there is some cause for celebration, with a fall in forced company liquidation; compulsory liquidations stood down by 15.2% sequentially, and 33.8% year-on-year, at 922 in total.
However, creditors’ voluntary liquidations grew over the same period to 2,912, an increase of 1.2% sequentially and 0.4% annually.
Voluntary liquidations are a form of corporate insolvency that is not enforced on the company by the court.
Creditors’ voluntary liquidations indicate that the company has entered insolvency because it is incapable of covering the cost of its debts.
In contrast, it is possible to liquidate a company via a members’ voluntary liquidation – meaning that the choice to close the company does not relate to its inability to pay its debts.
Finally, compulsory liquidation occurs when a bill is unpaid following a statutory demand; in this instance, the creditor may apply to a court for a winding-up petition, allowing your assets to be sold in order to cover the cost of the debt.