Being a sole proprietor is the coolest because more and more companies are drowning in debt

In May, the court of registration published 2,623 company foundations, which is lower than the record-breaking company formation values ​​of recent months, but is still outstanding compared to the data of previous years. “Company formation in May appears to be very subdued compared to the data of recent months, but the monthly company registration value is still 9 percent higher than the monthly average in 2020, which means that the entrepreneurial spirit remains strong,” said Richárd Pertics, Opten company information service analyst.

The number of start-ups in May brought the lowest value in the last six months, but this may not be such a big surprise, as in 2021, unusually high monthly start-up values ​​of over 3,000 were recorded virtually continuously. This was not at all typical of the data of recent years, so the value of the company registration in May is a degree more balanced and is more in line with the slight growth trend of recent years.

However, the number of start-up sole proprietorships was still able to bring in the outstanding values ​​of the first month of the year. In just one month, almost exactly 7,000 new sole proprietorships entered the market, which is 6 percent even higher than in April, and in any case fits well with the outstanding values ​​of recent months.

This also means that in May more than two and a half times as many sole proprietorships were started as joint ventures. The phenomenon is not entirely unique, as the number of sole proprietors has grown much faster in recent years than that of joint ventures. “The fact that there are many more sole proprietorships does not mean that there will be more sole proprietorships in the country than joint ventures, as the number of fluctuations, cancellations and interruptions is also higher for sole proprietors,” says an Opten analyst.

Among corporate enterprises, the number of company cancellations remains at a low point for many years. In just one month, only 1,371 companies went out of business, meaning that the number of company cancellations could continue to fall from the extremely low levels of recent months. The low value of company cancellations is still mainly due to the suspension of forced cancellations.

Source: Opten

Liquidation and winding-up proceedings share roughly half of the winding-up proceedings. In this respect, however, the bad news is that the number of winding-up proceedings has been on an upward trend for months, while that of winding-up proceedings has been declining. That is, more and more businesses are leaving debts behind. Liquidation proceedings have been declining in recent years, but the monthly liquidation counter has been growing steadily for about 9 months, which is not a good sign for the company base.

There are currently about 524,000 joint ventures operating in the country and their number could approach as high as 540,000 by the end of the year. This mainly depends on when forced cancellations can be restarted, as this will be accompanied by a wave of company cancellations. The good news for the company base is that implementations have been relatively low in recent months. In May, enforcement was initiated against only 2,212 joint ventures, which is significantly lower than the values ​​usual this year and those registered last year.

The value of the Opten – Company Fluctuation Index (which compares the number of companies canceled and established during the given period with those operating properly at the beginning of the period) in April was around 9 percent on average.

Source: by

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