The number of failed unincorporated entities has significantly increased from the September quarter of 2015.
The findings were revealed in CreditorWatch’s latest Small Business Risk Review, which also shows a continuous high in national payment defaults (+67%) during Q4 2016.
Unincorporated entities (typically sole traders and partnerships) are commonly small privately owned businesses. The operators are solely responsible for the debts and liabilities of the business, and are often unaccounted for in traditional statistics as they are not legally registered as a company.
CreditorWatch managing director, Colin Porter said “these results reveal an increasing level of distress in the SME market that should concern businesses of all sizes. It’s becoming more and more important to know exactly who you are trading with and to verify that the entity status is still active.”