Companies going bust
But individuals hold out
THE RECESSION IS really taking its toll on companies and close corporations, forcing many of them into liquidation. Statistics SA figures show that the total number of liquidations for the first four months of 2009 increased by 45,3% compared to the first four months of 2008.
Stats SA said the increase in liquidations in the first four months was due to increases of 48,2% in voluntary liquidations and 22,4% in compulsory liquidations. When broken down into companies and close corporations, the increases are 54,6% and 37,8% respectively. The total number of companies liquidated in the first four months of this year was 1 357.
It took a while for liquidations to respond strongly to the economic crisis, as companies tried to stay afloat despite high interest rates and slackening demand. Most of the liquidations came from the retail and financial sectors.
On the individual and partnership front, the bankruptcy figures are less shocking, showing perhaps that the worst is over. The total number of insolvencies increased by 10,5% in the first quarter of this year, but was down in March compared to the same month a year ago.