London data reveals number of businesses in capital reaches “record high”

Latest figures show that the number of businesses in London reached a record high during 2021 – despite the continuing economic challenges resulting from the pandemic.

The statistics come from the Inform Direct Review of Company Formations using data from Companies House and the Office for National Statistics.

The total number of registered companies in London rose to 1,397,474 at the end of 2020, representing an increase of 4.4 per cent.

Camden formed the highest number of new businesses (42,268), followed by Hackney (31,036) and Westminster (23,884).

John Korchak, operations director at Inform Direct said: “It is excellent news to see that London has achieved a record high for the number of businesses in the city despite the continuing challenges of the pandemic.

“The retail sector saw the largest number of new companies (39,543) which may be the result of pent-up demand after the lockdowns of 2020 and early 2021 and people looking to spend their income in different ways as a result of widespread restrictions on travel and entertainment. This was followed by real estate with 23,708 new incorporations.

“Reaching a new record number of companies demonstrates an active economy with entrepreneurs motivated to invest in new businesses which meet current and emerging demands for goods or services. The overall picture for the UK as a whole is also an optimistic one with the total number of companies now exceeding five million for the very first time.”

Whilst company formations grew, the number of dissolutions across the UK – 606,912 during 2021 – hit a record high. Reasons for this may be that new enterprises set up early in the pandemic may no longer be operating as people have returned to full-time employment or businesses thriving pre-COVID-19 have suffered as behavioural and spending patterns have changed.

Inform Direct is a company secretarial and formation specialist. Its company secretarial and formations software currently supports around 250,000 UK companies.

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