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The furniture giant declares bankruptcy after 46 years. Liquidation of stores
Experts believe this change should not be treated with concern. We are talking about a flexible solution, and resuming business is easy. There are also opinions that the impact on future statistics regarding the liquidation of the above-mentioned companies may have planned changes in the rules for determining health insurance premiums.
Closures slightly down
According to data provided by the Ministry of Development and Technology, in the first half of 2024, the CEIDG register received 99.6 thousand. applications regarding the termination of sole proprietorship. This is 3.4% less than in the same period of 2023, when there were 103.1 thousand such cases. In the opinion of Łukasz Goszczyński, legal advisor and restructuring advisor from the GKPG law firm, this decline does not mean much for the economy itself and the broadly understood market. It should also be noted that entrepreneurs are currently in better shape than a year ago. And that's why things are getting better in this regard. Other experts also express similar views.
– The beginning of 2023 was particularly difficult for entrepreneurs. At that time, we were dealing with a period of culmination of cost pressure, related in particular to high energy prices, with simultaneous weakness of internal demand. The Polish economy was in recession, in the first quarter of 2023, GDP decreased by 0.4% year on year. In Q2 2023, it decreased by 0.6% y/y. Since then, the economic situation has improved noticeably. This may also result in a better ability of JDG to stay on the market – says Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs (FPP).
As Dawid Sułkowski from the Polish Economic Institute (PIE) states, business conditions remain stable, but have slightly worsened compared to last year. Although the decline in inflation pleases consumers, it often means lower revenue growth for companies. According to the expert, data on deregistration of companies do not fully reflect the current situation. Entrepreneurs decide to suspend a JDG rather than close it. In addition, Mr. Goszczyński adds that entrepreneurs whose business conditions have only deteriorated, often suspend their operations to wait out a more difficult period.
– The reasons for the closure of JDG are complex and cannot be reduced to one simple factor. The most liquidated activities can be observed in the construction, trade and transport sectors. This is related both to a number of barriers encountered in these sectors of the economy, as well as to the fact that a significant number of companies operate in them – comments the chief economist of FPP.
Suspensions are going up
According to the ministry's data, in the first half of 2024, the CEIDG register received 179.1 thousand. applications for suspension of JDG. This is 3.3% more than in the same period of 2023, when there were 173.5 thousand such cases. In the opinion of attorney Łukasz Goszczyński, this increase is not disturbing. This is rather a natural course of events when it comes to the exchange of companies on the market. Moreover, it does not matter much for the economy, because new entrepreneurs usually replace the closed company.
– In my opinion, these data should not be treated with concern. The institution of JDG suspension in the current legal situation is a very flexible tool that can be used frequently and on an ongoing basis. Entrepreneurs choose this solution so as not to bear the burden of, among others: due to compulsory contributions at a time when, e.g. due to seasonal downtime, a given activity is not performed. However, resuming JDG is as simple as suspending it, explains Łukasz Kozłowski.
Moreover, Dawid Sułkowski does not perceive the current scale of JDG suspensions as disturbing. Data in this area are very variable, and not every such case results from the economic situation of the company. As an expert from PIE notes, some entrepreneurs decide to register a new company instead of resuming a JDG. It also happens that a suspended business is never suspended. In practice, this has the equivalent effect of deregistering the company, but we do not see this in the statistics on the termination of business.
– If the business is suspended, the entrepreneur may, for example, try to recover his receivables and collect them. The regulations allow for activities that fall within the scope of a previously run business, even though the business is not active. In this way, the JDG owner avoids costs, primarily related to social insurance. This attitude may result from the need to carry out actual, not legal, restructuring. Entrepreneurs are waiting for the further course of the situation and if it improves, they will decide to resume their operations – explains Adrian Parol, legal counsel and restructuring advisor.
It's supposed to be better, but…
According to Łukasz Kozłowski, the number of applications to close JDG will decrease at a moderate pace, by 2-4% year to year. As FPP's expert argues, market demand conditions will continue to be a key factor. Future regulations regarding public law charges will also have a significant impact, especially since JDG is often a form of self-employment. In this context, future changes in the rules for determining health insurance premiums may be particularly important. If they are beneficial for small companies, the number of registered JDGs may increase faster and the scale of their liquidation may decrease.
– In my opinion, there will be fewer closures and suspensions of business activities than recently. The improvement of the economic situation in the country will certainly contribute to this. In addition, a change in consumer sentiment on the market is already visible – says attorney Adrian Parol.
Attorney Łukasz Goszczyński has a similar opinion, claiming that in the second half of the year the situation in terms of closing and suspending sole proprietorships should improve. However, for this to happen, nothing untoward must happen in the economy and politics. Then things may still be different.
– An important issue, often somewhat overlooked in the context of JDG, apart from the above-mentioned examples, will be the situation regarding health insurance premiums. These types of entrepreneurs are really waiting for new solutions and often decide to suspend their activities because, as mentioned above, the problem disappears, they will resume their activities. It is true that the current government is announcing changes in this matter, but it is still not happening, and many entrepreneurs cannot afford to wait so long – emphasizes Adrian Parol.