Pandemic fails to dent new company activity


Latest figures from Companies House have highlighted the resilience of the UK Corporate sector by confirming record levels of new company formations.

According to the most recent quarterly data release, 90,000 more new companies were formed in 2020 than in 2019, allaying fears that the pandemic and a series of lockdowns damaged start-up activity.

Strength continues

The 2021 picture is even more reassuring with some 56,000 more new company formations recorded during the first half of 2021 when compared to the same period of 2020. These figures include all public and private Companies Act 2006 companies, although exclude the number of new Limited Liability Partnership formations.

Regional differences

With Companies House being the Company Registrar for the United Kingdom as a whole, a deeper look at the data highlights some interesting regional differences. During the first half of 2021 England and Wales took the lion’s share of new start-up activity with 52,000 more incorporations than during the same period in 2020. In contrast, Scotland’s increase was 3,000 but remained firm with 18,000 new company formations during January to June 2021.

Lockdown response

Whether new company growth is a response to the structural changes seen during lockdown or not remains to be seen, and details of which sectors received the greatest level of new start-up activity are not disclosed. But there is a growing sense that shifting working patterns, with widespread working from home, technological advances, and even furlough, may have sparked a new entrepreneurial spirit which is reflected by those taking the initial steps with new businesses.

Underlying strength but risks on the horizon

Buoyant start-up activity reflects a stronger economy generally. Firm Q2 GDP economic growth has already been reported at a time of the fastest pace ever seen in the CBI’s quarterly SME trends survey. However, several risks loom on the horizon, with the organisation already warning that bottlenecks will likely dent growth in the next few months. Widely reported raw material and semiconductor shortages are causing global supply chain disruption, with knock on consequences for the wider economy in the months and quarters ahead.

Seek appropriate advice

If you are starting a new business, then it is always sensible to seek professional advice at the outset of any new venture. The Corporate and Commercial team at Pinney Talfourd regularly assists with all legal aspects facing new businesses. Whether you require terms and conditions for use with your clients or customers, appropriate policies for inclusion on your website, or even an agreement between company shareholders, we would be pleased to guide you through the process to ensure that your start-up heads in the right direction.

More information

If you require any assistance in this area, please contact our corporate and commercial team here.

This article was written by Edward Garston, Partner in our Company & Commerical Team. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of August 2021.


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