Last year saw the number of businesses in the UK reach a record high – passing the five million company milestone for the first time.
At the end of the 2021, a total of 5,005,147 companies were registered, an increase of 3.5 per cent on the total of 4,837,426 at the end of 2020. Of these 4,416,125 were in England, 272,770 in Scotland, 140,077 in Wales and 74,050 in Northern Ireland.
The statistics come from the Inform Direct Review of Company Formations using data from Companies House and the Office for National Statistics.
Despite the ongoing economic challenges of the pandemic, 771,617 new companies were registered during the previous 12 months, a slight fall on 780,766 in 2020.
Of the 684,335 new formations in England, well over one third (269,246) were in London. 33,988 companies were formed in Scotland, 21,386 in Wales and 9,358 in Northern Ireland.
John Korchak, Operations Director of Inform Direct (above) said: “It is excellent news to see the number of companies based in the UK reaching an all-time high during 2021, despite the continuing challenges of the pandemic.
The number of new company formations, although slightly down on 2020, demonstrates an active economy with entrepreneurs motivated to invest in new businesses
“This continues the trend of consistent annual growth, which has shown the number of companies doubling since 2010.
“Sectors with the highest number of new incorporations were retail (133,077) and construction (77,667). In the case of retail, this may be the result of pent-up demand after the lockdowns of 2020 and early 2021 when widespread restrictions on travel and entertainment may have led to people spending their income in different ways.
“The number of new company formations, although slightly down on 2020, demonstrates an active economy with entrepreneurs motivated to invest in new businesses which meet current and emerging demands for goods or services.”
A second record high was seen in the number of company dissolutions across the UK – 606,912 during 2021 – a huge 45 per cent increase on 2020. This may be evidence of businesses kept afloat by government support early in the pandemic now becoming unviable.
New enterprises set up during the pandemic might also have been short-lived, as people returned to full-time employment or struggled to take the business to the next level.
A a more detailed picture of company formations in the UK here
UK companies pass the 4 million mark