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One in every 150 firms going bust

Latest Government figures show one in every 150 active companies went into liquidation last year while corporate insolvencies have more than doubled.

The figures for the final quarter of 2008 also revealed conditions worsened in the fourth quarter. Between September and December there were 4,607 compulsory liquidations and creditors' voluntary liquidations in total in England and Wales.

This was an increase of 11.9 per cent on the previous quarter and an increase of 51.6 per cent on the same period a year ago.

This included 1,562 compulsory liquidations up 34.4 per cent on a year before and 3,045 creditors voluntary liquidations up 62.2 per cent n the corresponding quarter of 2007.

On top of this there were 2,428 other corporate insolvencies in the fourth quarter including 261 receiverships, 2,018 administrations and 149 company voluntary arrangements. In total these represented an increase of 220 per cent on the same period a year ago.

Geoff Carton-Kelly, Partner at Baker Tilly Restructuring and Recovery, said:

'The figures are depressing in their predictability, showing just what a precarious state UK plc is currently in.

'The last quarter of 2008 saw a massive rise in the amount of corporate insolvencies compared to the last quarter of 2007.

“Whilst many businesses can cope with a small reduction in custom, the massive falls currently being experienced are causing serious damage.

“Certainly, 2009 will go down as a bleak year in history for mid-market companies - things will get worse for them before they get better. Taking professional advice early is the key to survival.'