Total Number Of UK Businesses Increased By 4.5%

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4 July 2023 – New data released by Companies House shows that between March 2022 and March 2023 the number of UK businesses has increased by 4.5%.

Every year, Companies House releases official statistics about the changes in the UK business landscape in their Companies Register Activities report. The new figures cover the financial year 2022/23.

The data shows that currently there are 5,116,743 businesses on the UK total register. This is 4.5% more than in March 2022. This number does include 417,341 firms that are in the process of dissolution and liquidation.

The effective register, the number of businesses without those firms, stands at 4,645,402 businesses, which is 3.2% more than in the previous year.

6.4% More Incorporations Than Last Year

In the financial year 2022/23 801,006 new UK businesses were incorporated, which is 6.4% more than in the previous financial year.

There were 585,807 dissolutions, a slight increase of 0.7% compared to the financial year 2021/22. However, during October 2022 the strike off process was paused for 5 weeks. When it was resumed, a phased approach was taken.

This could mean that the number of dissolutions in the year 2022/23 was affected. Over all, the report shows that the number of incorporations and dissolutions has gone up steadily since records began in the financial year 1986/87.

22,827 of those dissolutions in 2022/23 came from insolvent liquidations. An increase of 34% compared to the previous financial year. 10,237 UK businesses were subject to member’s voluntary liquidations, which is 13.4% more than in 2021/22.

Liquidations and other insolvency proceedings accounted for 35,000 businesses closing down in 2022/23, which is an increase of 15.4% compared to the previous financial year.

As a result of these changes, the UK business register has increased to 5,116,743 companies in 2022/23. This is 4.5% more than the register held in the financial year ending in 2022.

Average Age Of UK Businesses 8.6 Years

On average registered UK companies are 8.6 years old, according to figures by Companies House. However, when drilling down into the data, it came to light that 50% of the businesses on the total register were under five years old.

35.4% of companies were between 1 and 4 years old. Companies that were less than a year old in the financial year ending in 2023 accounted for 14.6%. 71.8% of firms on the total register were less than 10 years old in that year.

Only 10.7% were over 20 years old and 1.3% of all businesses on the total register in that financial year were over 50 years old.

The average company age in the UK has remained around 8 years since the financial year ending in 2004, but has fallen by about 2 years since 2000.

The average age of companies in liquidation or in the course of dissolution in the financial year ending in 2023 was 8.4 years. Almost half (49.6%) were aged between 1 and 4 years. 26.3% of companies in the process of closing down in that year were between 5 and 9 years old.

Companies between 40 and 44 years and 45 and 49 years each accounted for less than 1% of the firms closing down.

Over 95% Of Companies On The Total Register Are Private Limited

Companies House’s register includes 29 types of corporate bodies, but the large majority of UK businesses registered with the government body fall in the Private Limited category, with over 95% of the share. This means there are 5,067,113 Private Limited companies registered in the UK.

There are 57,335 Limited Partnerships, which accounts for 1.1% of all company types. Limited Liability Partnerships are in third place, with 52,627 businesses of that category, which is 1%.

The data also shows that since the financial year 2004/05, the top three company types haven’t changed. They took over 98% of the share in the financial year 2022/23.

Charitable Incorporated Organisations accounted for 0.6% of all organisations on the register in the financial year ending in 2023. In that year there were 31,542 businesses of that type.

Businesses in the category Public Limited have declined since 2008 and now only make up 0.1% of the total register.

While the vast majority of registered companies are UK businesses, 1.7% are classed as Overseas Companies. There were 13,729 firms of this type on the register in the financial year 2022/23. These companies have been incorporated outside the UK, but have a UK establishment, such as a branch.

Most of these companies are from the USA, which account for 19.1% of all overseas businesses. The Channel Islands have the second-largest share with 11.9% and Irleand is in the third spot with 9%.

Of 941 overseas companies that were newly registered in the financial year ending in 2023, most are from the Channel Islands, with 21.6%. 10% were based in Ireland, 9.4% in the United States and 4.8% in the Netherlands.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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