Record number of new companies set up so far in 2023
The number of new businesses incorporated in the UK reached a new record in the first quarter of 2023 despite rising costs, reveals a new study of the latest Companies House records. The research, carried out by digital agency Koozai, analysed the latest records from the Office of National Statistics of businesses registered with Companies House.
It shows that 202,130 new businesses were set up in the UK in the first 12 weeks of 2023 - a year-on-year (YoY) rise of 6.5%. This is also a 19.5% (39,966) rise in new business incorporations compared to the final 12 weeks of last year. In 2022 overall there was also a 2% YoY rise in new business incorporations - from 762,278 in 2021 to 778,219 in 2022.
The rise in the number of new companies being set up comes despite growing costs for UK businesses due to rising inflation and interest rates.
The Cost of Living crisis has not deterred new entrepreneurs
Rising costs have so far not led to a decline in the number of people deciding to set up a new business. In the past 64 weeks, which represents the majority of the Cost of Living crisis to date, 52,130 more new businesses were set up than in the previous 64 weeks. New business incorporations are also up 18.23% in the past 64 weeks compared to the 64 immediately prior to the first UK lockdown in March 2022.
Number of businesses being ‘struck off’ is on the rise
Despite many entrepreneurs' optimistic outlook, more businesses are being struck off the Companies House register. The number of UK companies that were dissolved in the first 12 weeks of 2023 rose by 9,789 - 4.7% YoY. 2022 was also a record year for UK business dissolutions, with 876,521 being struck off the Companies House register - a rise of 8.61% YoY.
Compulsory dissolutions rise 52% since the COVID-19 pandemic
A growing number of UK businesses are also being forcibly struck off the Companies House register, rather than being voluntarily dissolved by its Directors. So far in 2023, there have been a record 143,154 compulsory business UK dissolutions - 51.7% more than in the same period of 2019 (the year before the onset of COVID-19).
This is also 7.2% more than in the same period last year. Compulsory dissolutions made up nearly 2 in 3 (65.4%) of all businesses struck off in the first quarter of this year - up seven percent since before the pandemic (Q1 2019).
Gary Hainsworth, Senior Organic Data Specialist at Koozai said: “Our analysis shows that the challenging economic environment has not yet put off UK entrepreneurs. In fact, quite the opposite is true, as the number of new companies continues to grow YoY since the pandemic. It’s possible that confidence may wane if business dissolutions and costs continue to rise, however this hasn’t so far deterred people from taking the plunge to set up a new business.”