The year 2022 has been remarkable for a curious contrast in terms of the economic and financial difficulties of companies. Indeed, even though the business failures have reached a historical level socks (the lowest ever recorded for 30 years), the delisting of companies jumped over + 30% in a single year. How to explain this phenomenon ? In reality, an “opportunistic” effect allowed entrepreneurs to predict difficulties and close their business amicably before it was too late. Here's what to remember about business failures and delistings for 2022.
Write-offs and business failures: definitions
Business failure
There is no legal definition of business failure. In general, a company is considered to be in default when it cannot repay its debts (stoppage of payments) and turns to procedures to resolve their difficulties. These are mainly procedures collective : safeguard, receivership and judicial liquidation (simplified in the appropriate case).
When a company is the subject of several insolvency proceedings, there are, in principle, several failures. However, for this, the second procedure must terminate the first. There are certain exceptions to this rule, in particular in the event of judicial liquidation pronounced at the end of the observation period. In the latter case, only one failure is counted.
Company write-off
La radiation of a company is the procedure by which a company is deregistered from legal registers. The radiation causes the permanent deletion of the company, contrary to failure. A failing company can, in fact, overcome its difficulties and avoid delisting. Conversely, a deregistered company no longer exists.
The register involved is the Trade and Companies Register (RCS), managed by the clerks of the commercial courts. It stores the information of traders, regardless of their legal status (company or sole proprietorship) and civil companies. There radiation can intervene automatically by the court, following a judicial liquidation or at a closing insurance.
Companies in a less critical situation in 2022
The government has put in place measures to help companies counter the negative economic effects of the COVID-19 pandemic, which has resulted in a decrease in the number of bankruptcies recorded in 2022.
According to the banking institution La Banque de France, 27 failures were recorded in 2022, while the figure was 31 the previous year. In total, the number of these incidents has decreased by 12,7% and between 2021 2022.
Among these cases, the simplified judicial liquidation represents nearly half. It is followed by “classic” judicial liquidation (25%) and receivership (21%).
All economic sectors have benefited from this decrease in bankruptcies, including those most affected by the rules of social distancing (accommodation and catering).
However, we note a rise in bankruptcies in theagriculture and fishing (6%) as well as in real estate activities with the exception of construction (+5,3%).
Explosion of corporate write-offs in 2022
Company write-offs experienced a huge increase in 2022. Data from Infogreffe indicates that, at the end of December, 385 655 companies asked their removal from the trade and companies register. This figure is in increase of nearly 30% compared to the previous year, mainly due to the procedures for amicable liquidations, which represent almost half of total write-offs. Ex officio cancellations also increased by 58%.
More than half of the write-offs concern commercial companies, approximately 30% sole proprietorships and 20% civil companies. Economic interest groups represent less than 1% of write-offs.
An effect of catching was observed at fourth quarter 2022, which accounted for more than 30% of write-offs for the year.
What is the number of business failures and deregistrations in 2021?
Reply :
It is still too early in the year to determine the exact number of business failures and delistings in 2021.
What are the main factors that contribute to business failures and delistings?
Reply :
The main factors that contribute to business failures and delistings are declining revenues, high costs, lack of liquidity, inefficient operations, limited access to credit and the absence of a business plan. solid.
What are the impacts of business failures and write-offs?
Reply :
The impacts of business failures and write-offs are many and varied. The most common impacts are loss of jobs, lower income, lower investment, bankruptcy and higher interest rates.
