Johannesburg - Significantly fewer companies closed down in
May compared to the same month a year ago due to the introduction of the new
Companies Act, Statistics SA said on Monday.
"The year-on-year decline in the number of liquidations
for May 2011 was due to a 78.2% decrease reported for voluntary liquidations
(from 354 to 77)," the agency reported.
"The relatively low number of liquidations in May 2011
can be attributed to the new Companies Act of 2008, which came into effect on 1
May 2011 and which introduces provisions for business rescue and compromise
with creditors," Stats SA said.
The biggest contributors to the decrease were reported in
the financing, insurance, real estate and business services industry and the
wholesale and retail trade, catering and accommodation industry.
The number of liquidations in the first five months of 2011
were down by 15% - from 1 686 to 1 436 - compared to the first five months of
2010.
Statistics SA said liquidations took place when the affairs
of a company or close corporation were wound up because the liabilities
exceeded assets, and the matter was resolved either voluntarily or by a court
order.
Insolvencies - where an individual or partnership is unable
to pay its debt and is placed under final sequestration - also dropped.
"A year-on-year decrease of 40% (from 325 to 195) was
estimated for April 2011," the agency said.
The total number of insolvencies for the first four months
of 2011 decreased by 33% compared to the same period last year.