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Here is how many Irish businesses went broke last year

The service sector was hit hardest by insolvencies.

Image: Shutterstock/Ljupco Smokovski

WHILE THE ECONOMIC recovery continues to take hold, anyone with ambitions of opening their own restaurant or B & B should keep in mind that they’ll have their work cut out.

New figures from Deloitte have shown that the service sector is still most likely to be hit by corporate insolvencies.

Last year 200 businesses closed their doors after falling on hard times. This accounted for 19% of the 1,049 total closures.

Is that bad or good? 

While 1,000+ business closures doesn’t sound great, things are on the up.

There has been an ongoing downward trend since 2012 when 1,684 insolvencies were recorded.

Out of the current batch  69% were voluntary liquidations, followed by receiverships (24%) and count liquidator appointments (5%).

Commenting on the figures, David Van Dessel, a partner in Deloitte Restructuring Services, noted his disappointment that the number of companies availing of examinerships had not increased.

“It is disappointing that changes, both from the Companies Act 2014 and the new ‘examinership-lite’ legislation of 2014, have not yet made an impact in 2015,” he said.

Examinerships – which involve the appointment of a third party to assist with the restructuring of a company – could potentially assist SMEs avoid liquidation, he went on to say.

Where are businesses going broke?

The majority of businesses that ran out of money last year did so in Leinster.

The province accounted for 65% of total liquidators appointed, followed by Munster with 21% of all appointments, Connaught with 9% and Ulster with only 5%.

Speculating about this year, van Dessel went on to say: “In 2016, we anticipate that the total number of corporate insolvencies will continue to decrease.

Furthermore it is expected that there will finally be an increase in the number of companies opting to restructure by way of examinership, particularly as the general improvement in the domestic economy should mean that more businesses will have a reasonable prospect of survival.

Read: Six months after a €32 million windfall, the Irish founder of Hassle is on the way out

Also: This bank is going to offer you cash for your mortgage

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