What led entrepreneurs to insolvency?
According to publications in MSIG and the National Register of Debtors, as many as 128,354 announcements related to ongoing bankruptcy and restructuring proceedings were published by December 31, 2023 – 21,000 related to consumer bankruptcy, 408 to corporate bankruptcy, and 4,244 were announcements on the opening of restructuring proceedings.
In comparison, in 2022, 360 companies declared bankruptcy, and restructuring proceedings were opened against 2,379.
According to data published by CEIDG, 367,768 entrepreneurs suspended their business activities, and 195,743 terminated them. This is also an upward trend compared to the previous year, when 344,951 businesses were suspended and 192,079 terminated.
The above indicates a growing number of bankruptcy and restructuring proceedings year by year, as well as an increase in the number of suspended and terminated business activities, with a simultaneous decrease in the number of companies that were established – in 2023 there were 299,253 of them, and in 2022 – 308,692.
What led entrepreneurs to insolvency in 2023?
The reasons for this can be traced to rising inflation over the past two years, along with rising electricity, gas, and heating prices, as well as the significant increase in the minimum wage. However, this list isn't exhaustive. Legislative changes introduced by the Polish Deal, such as the increase in health insurance contributions and changes to the deduction of contributions from personal income tax advances, also have significant implications for businesses.
In 2022 and 2023, support from the anti-COVID fund ended, but business conditions deteriorated significantly. Many companies, previously teetering on the brink of insolvency, were unable to cope with declining consumer demand and the slowdown in the Polish and European economies.
A positive change observed since 2020 is the shift of entrepreneurs toward restructuring. Analyses by the Central Economic Information Center indicate that 4,244 restructuring proceedings were announced in 2023. In terms of the type of proceedings, debtors most often filed for restructuring under simplified arrangement approval proceedings – 92.34% of all proceedings. The largest number of proceedings concern individual businesses (72.08%) and limited liability companies (15.29%).
After analyzing the data, we conclude that restructuring proceedings offer entrepreneurs an opportunity to avoid bankruptcy and continue their business. Restructuring allows for reaching an agreement with creditors, deferring debt repayment deadlines, and reducing debt repayments. However, it's crucial to recognize the problem in a timely manner and take appropriate action.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of January 24, 2024
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