2020 set to be file 12 months for brand spanking new corporations created
This year should see record number of companies created, with an extra 84,758 businesses setting up in 2020 compared with 2019.
This is equivalent to a 12.3 per cent increase year on year, which is the highest percentage growth since 2011 and the highest actual growth on record.
Between June and August, an additional 59,358 new companies were created at Companies House, according to research.
>See also: How to become a sole trader
Sectors seeing the highest growth included e-commerce (up 88 per cent with 12,490 new businesses registered), clothing (up 55 per cent) and, unsurprisingly, retailers of medical goods (up 176 per cent).
Although on the face of it the SHL research is good news, the reality is that many new companies are created by those who have lost their jobs because of Covid-19.
Rather than create employment, 77 per cent of the UK’s 6m small businesses are sole traders offering little chance of employment to others.
>See also: Registering a company name – a Small Business guide
And there is also a question mark as to how many of the 59,538 companies created between June and August are even legitimate, given the widespread fraud which has gone on with criminals targeting the Bounce Back Loan scheme, which offers limited companies up to £50,000 interest-free for one year.
Business sectors that saw the biggest drop-off in company creation included vets (down 48 per cent year on year), IT consultancy (down 25 per cent), opticians (down 33 per cent) and, again unsurprisingly, aircraft repair/maintenance (down 44 per cent).
Recruitment and training business SHL analysed data for 6.1m businesses created in the UK over the last decade.
However, Iain Wright, director of business and industrial strategy at the Institute of Chartered Accountants in England and Wales, told the Times: “Every downturn in economic history is accompanied by a rise of entrepreneurship. This could be the start of new, innovative businesses.”
5 best ideas to start a small business post coronavirus