Over the last ten years, the number of insolvencies remains deficient.
Slightly more companies filed for insolvency in 2022 than in the previous year (+4.3%). The increase was much more substantial for companies with 11 to 100 employees (+26.1 %). Most of all insolvency applications in 2022 once again came from micro-enterprises (up to 10 employees). To address this, the EU Commission recommends simplifying insolvency proceedings for micro-enterprises.
Despite the increase from 2021, the number of corporate insolvencies remains very low, considering the past ten years. The share of insolvent companies in the total number of companies is also meagre. Only 4.8 out of 1,000 companies filed for insolvency in 2022. By contrast, over 90 % of all company closures are of the owners' own accord.
More insolvencies for limited liability companies (GmbH)
Over 8,400 insolvency applications came from limited liability companies (GmbH) in 2022, 14.8 % more than in the previous year. One reason for this is the reinstatement of a strict insolvency filing directive in Germany. Other causes are specific economic crises and structural change (e.g. in retail trade and among automotive suppliers). In contrast, the number of insolvency petitions filed by companies in the legal form of a sole proprietorship or partnership remained at the level of the two pandemic years 2020 and 2021.
Larger limited liability companies (GmbH) are often restructured during self-administration or continued with the help of investors. Restructuring in insolvency proceedings is particularly frequent in the trade, healthcare and automotive supply sectors. On the other hand, individual companies rarely apply for restructuring methods such as self-administration, partly due to the complexity of the court proceedings. A simplified, fast restructuring procedure could relieve smaller companies of debt and reduce court proceedings.
