According to data by Statistics South Africa, nearly 1000 businesses have been liquidated in the first half of 2021, Businesstech News reports.
A company is liquidated when its affairs are wound up due to its liabilities exceeding its assets. This can be done voluntarily or through a court order.
The data shows that 997 companies and close corporations were liquidated between January and June of this year, more than the 763 businesses that were liquidated during the same time last year.
While liquidations remain at high levels, Stats SA’s data shows that there has been a downward trend in these numbers.
There was a 1.5% year-on-year decrease in June 2021 of the total number of companies liquidated. The number of companies liquidated decreased by 12 cases and the number of close corporations liquidated increased by 10 cases during the same period.
But the total number of liquidations increased by 42% in the second quarter of this year when compared to the second quarter of 2020. There was also an increase in liquidations of 30.7% in the first half of the year compared with the first half of 2020.
The total number of liquidations in 2020 exceeded 2000.
The hardest-hit industry was the finance, insurance, real estate and business services sector. This industry accounted for 32% of all liquidations to date. Monthly data shows the same trend, with 44 liquidations in this sector recorded in June.
The trade, catering and accommodation sector was the second hardest-hit, with an almost complete shut-down for the best part of 2020, and with another Covid-19 lockdown in 2021.