The number of limited companies failing in 2003 fell by 9.4 per cent compared with 2002, according to the latest figures released by business solutions company, Experian.

In 2003, there were a total of 17,522 corporate failures 1,825 fewer than the 19,347 recorded in 2002. And in the South West, business failures declined by 13.2 per cent on 2002.

The downward trend in corporate failures has accelerated throughout 2003, in marked contrast to 2002, when an increase of 9.8 per cent was recorded.

Phil Cotter, managing director of Experian's Business Information division, said: "The introduction of new insolvency rules during 2003 to help make it easier for UK businesses to get out of financial trouble has been reflected in the overall decline in the number of UK businesses going to the wall in 2003, while the number of companies going into administration increased by a record 74.5 per cent in the final quarter of the year."

Under the new rules, banks are no longer able to appoint a receiver; they can only appoint an administrator and it is now easier for companies to put themselves into administration to gain breathing space from their creditors and put measures in place to help prevent corporate failure.

Added Mr Cotter: "The fall in corporate failures is very welcome, but, as the figures highlight, a large number of companies are still failing each year and organisations should ensure that they have good credit management practices in place to protect themselves against the risk of non-payment."

The most significant improvements among the 25 industry sectors where failures fell in 2003 were Extraction Industries (down from 17 to 10), Building Materials (down from 13 to nine), Information Technology (down from 1109 to 781), Printing, Paper and Packaging (down from 56 to 37), Post and Telecommunica- tions (down from 243 to 170) and Insurance (down from 57 to 46).

The Business Services sector recorded the highest number of failures in 2003 at 3,170, a decline of 423 from 3,593 in 2002.

Concluding, Mr Cotter said: "Last year thousands of companies went to the wall at the rate of 70 per week.

"That resulted in millions of pounds of bad debts, often at the expense of other UK businesses, consumers and the UK economy as a whole.

"To help protect themselves from losses when customers go bust, companies are well-advised to find out as much as possible about their existing and prospective customers, their financial status and payment performance."