More companies closed down in the first quarter of 2011 compared to the first quarter last year, Statistics SA said on Monday.

"The total number of liquidations recorded for the first quarter of 2011 increased by 12.5% (from 944 to 1062) compared with the first quarter of 2010," Stats SA said.

This increase was due to an increase in the number of voluntary liquidations and compulsory liquidations.

"During this period, company liquidations increased by 15.2% (from 434 to 500) and close corporation liquidations increased by 10.2% (from 510 to 562)."

The highest number of liquidations occurred in the financing, insurance, real estate and business services industry at 35%.

Next was the wholesale and retail trade, catering and accommodation industry at 25 percent of liquidations.

The third highest number of liquidations – 20% -- occurred in the community, social and personal services industry.

Statistics SA said liquidations took place when the affairs of a company or close corporation were wound up because the liabilities exceeded assets, and the matter was resolved either voluntarily or by a court order.

The number of insolvencies for the first quarter of 2011 decreased by 31.3% compared to the first quarter of 2010.

Statistics SA said insolvency referred to an individual or partnership which was unable to pay its debt and was placed under final sequestration.