The number of company liquidations dropped by 13.9 per cent from the year before to 3,974, while administrations plummeted by 35 per cent compared to the year before to 633. Company voluntary liquidations also dipped by 14.4 per cent on the same quarter last year.

Administrations have now fallen for six quarters in a row since they peaked in Q1 2009, which saw 1,311 companies fall into administration. It is encouraging that the number of business failures is dropping across all sectors.

The most up-to-date Business Failures Report from credit reference company Equifax displays a 19.1 per cent year on year fall and a decrease of 7 per cent throughout the 2nd quarter compared with the first three months of 2010.

A total of 7,175 businesses went bankrupt in between April and June, according to the report, dropping from 8,874 in the exact same interval during 2009.

The document demonstrates that the services industry experienced the greatest level of business bankruptcy in the 2nd quarter, achieving 1,938, but nevertheless falling from 2,247 year on year. Transportation and communications was the very best performer, with failures falling just over 34 per cent on last year from 313 to 206.

Mr. Nic Beishon, head of Equifax Commercial Information Solutions, said: “Our latest report appears to reflect the very close control businesses have been putting on cash flow and costs. Beishon explained that overall, 6,409 businesses went bust in the second quarter of 2008 – there were 7,175 failures in the second quarter of 2010.

He added: “That’s still an increase but certainly a much smaller jump than in 2009 when failures in the second quarter hit 8,874.”

Richard Fleming, Mick McLoughlin and Ian Corfield of KPMG have been appointed joint administrators to First Quench. KPMG said 81 redundancies had been made at the firm’s head office in Welwyn Garden City, and warned that more jobs were likely to go.

First Quench has 1,202 stores under its various brand names, and employs 6,283 workers.

R3 is calling for the Insolvency Service to be allocated greater resources to pursue more cases referred to them by Insolvency Practitioners (IPs). Last year, out of the 4,752 referrals by IPs, the Insolvency Service disqualified 1,252 directors, or about 26%. Six years ago 45% of directors were disqualified.

“One in four reports resulting in a disqualification is simply not a high enough strike rate,” says R3 President Peter Sargent. “Insolvency Practitioners are required by law to report on the conduct of the directors of all businesses when they fail. A particular type of report is required when the conduct of the director appears to the IP to warrant further investigation. The Service does a good job to get the disqualifications it secures but clearly needs additional resources to pursue more cases.”

Under the Directors Disqualification Act, the Insolvency Service can seek a court order for a director to be barred from taking boardroom posts. Most commonly this is for trading when insolvent and the average disqualification period is six and a half years. R3 has been discussing with Parliamentarians and key stakeholders how best to prevent directors making the same mistakes next time round.

Peter Sargent concludes: “We have urged both Government and the opposition to consider introducing compulsory education for disqualified directors. Using a driving analogy, those caught speeding are encouraged to undertake a speed awareness course. Greater publicity for cases the Insolvency Service successfully prosecutes could also act as an additional deterrent, as well as more resources to police those who have been disqualified. Otherwise some ‘dodgy’ directors will simply slip through the net and be allowed to set up shop somewhere else.

Click Here and Take Immediate Action before you find yourself as a Disqualified Director

The Corporate Restructure team at Enable Finance is not surprised by these figures as we are currently in the deepest recession since the Second World War.

There were 5,055 compulsory liquidations and creditors’ voluntary liquidations in England and Wales in the second quarter of 2009, a rise of 2.9 per cent on the previous three months and a 39.1 per cent increase on the same period in 2008. Corporate liquidations comprised 1,457 compulsory liquidations, which are down 6.8 per cent on the previous quarter, and 3,598 creditors voluntary liquidations, which were up 7.4 per cent on the previous three months but a massive 56.8 per cent from a year ago.

While all business failures are traumatic and a real loss to the economy as a whole it would be interesting to see what percentage of businesses restarted having learnt from their mistakes.

A spokesperson for the Association of British Insurers said: “The latest insolvency figures are alarming. They are particularly bad news for suppliers who are unsecured creditors, as it’s likely they will herald an increasing number of pre-packaged administrations, in a year which has already seen a record number.” further highlighting the need for Bad Debt Protection Insurance.

In response to the above statement Corporate Recovery experts commented that a long term view must be taken as often businesses that restart again using a pre pack administration as the vehicle to purchase the assets of the old Company often go on employing staff and creating wealth for the economy in the long term.