The South African industries hardest hit by insolvency
Statistics South Africa has released its liquidations and insolvencies report for the past year, detailing the industries most hit by debt over the past year.
The report found that those in the financing, insurance, real estate and business services were most likely to file for insolvency in South Africa while those working in electricity, gas and water were the least likely to go insolvent.
It is however important to note that according to the Stats SA report, 23% of South Africans currently work in the Business services sector, while only 1% work in the electricity, water and gas industry.
For the purposes of the report, insolvency refers to an individual or partnership which is unable to pay its debt and is placed under final sequestration.
The number of insolvencies does not refer to the number of persons involved, as a partnership which is unable to pay its debt is regarded as one insolvency, irrespective of the number of partners.
Liquidation refers to the winding-up of the affairs of a company or close corporation when liabilities exceed assets and it can be resolved by voluntary action or by an order of the court.
The report also differed between liquidation that was compulsory (i.e court ordered) and liquidation that was voluntary (winding-up by choice).
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