Number of limited companies on the up in Wales

Friday 2 August 2013

The number of limited companies registered in Wales has jumped in the past year, according to new data.

According to BBC Wales, the number of limited companies set up in Wales in the 2012-13 tax period increased by 8.9 per cent, to a total of 16,267.

However, although the increase in people striking out on their own with new companies is promising, Wales still straggled behind the UK average of a 13 per cent rise in registrations.

It is worth noting, however, that not all new businesses created in Wales were included in the statistics, as many run as contractors or sole traders, with these figures looking specifically at limited companies.

BBC Wales analysed figures from Companies House and found that in 2011-12, a total of 14,937 limited companies were registered to Welsh postcode addresses, but this rose to 16,267 in 2012-13.

But it wasn’t all good news. The number of company failures also increased, rising by four per cent year on year compared to a reduction in closures across the UK as a whole.

Speaking to the organisation, business expert Professor Dylan Jones-Evans said that the increases in both new and failed businesses is illustrative of a “dynamic economy”.

He said: "People are starting to look at entrepreneurship as a positive alternative to working for somebody else.

"Unemployment had increased and people look very carefully about what their options are and what we tend to find is that people in their mid-30s and early 40s are the sort of people who start a business, and those are the people being made redundant.”

Professor Jones-Evans explained that while businesses are closing and de-registering as limited companies, these things are expected in a “vibrant” economy. He said the increase in start-ups and failures is called ‘churn’ and is a normal part of growth.

However, the increase in self-employment has been seen across the whole of the UK since the recession as people struggle to find jobs and instead turn to freelancing or self-employment.

Figures out from the Office for National Statistics in February revealed that there are 367,000 more people in self-employment now than there were in 2008. Of this increase, 200,000 became self-employed between 2011 and 2012. This is a massive 60 per cent of the total number of self-employed people, becoming their own boss in the space of one year.

At the same time, the number of employees dropped by 434,000 between 2008 and 2012, but this was mainly at the start of the four-year period.

"There may be perfectly good reasons for being self-employed, but it would be naive to think that all these workers are really budding entrepreneurs," the TUC's general secretary Frances O'Grady said.

"These figures instead suggest that many employee roles are being replaced by self-employed positions. Bogus self-employment is bad news for staff as they miss out on vital rights at work, such as paid holidays and employer pension contributions, without having the advantage of being their own boss."

By Victoria McDonnell

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