New Zealand company liquidations climbed to 2,934 in 2025—the highest number recorded since 2010—with the construction sector leading failures, followed by hospitality and property.
Independent analysis confirms these are multi‑year highs, reflecting persistent financial pressure across several industries. Registry data also shows elevated monthly liquidations, including 286 in December 2025, and very high numbers of company removals from the register. At the same time, increased IRD enforcement is contributing to more winding‑up applications and formal insolvency appointments.
This is where good legal advice becomes essential: to understand your business’s insolvency risks early, deal with creditors (especially IRD) before matters escalate, protect your personal position as a director, use the right legal tools to recover debt as a creditor, and put strong protections in place if you rely on vulnerable counterparties.
In a climate with rising numbers of companies in liquidation, getting advice early can prevent small issues from becoming major losses.
Table of Contents
For Business Directors & Owners: Act Early to Reduce Insolvency Risks
- Stabilise cash flow and speak to key creditors early—regulators, lenders, banks, Inland Revenue, and debt collectors are enforcing harder. Delays narrow your financial options for making repayments.
- Meet your duties when insolvency risks appear, especially with failure rates at their highest in 16 years. Document decisions and stay ahead of risk.
- Explore restructuring and insolvency options (creditor compromises, standstills, voluntary administration) before creditors take control of the process.
For Creditors: Protect Yourself and Recover Owed Money Faster
- Move quickly to recover debt—repayments tend to diminish the longer you wait, especially in sectors with high liquidation rates.
- Use targeted enforcement tools such as statutory demands, PPSR checks, caveats on property, and charging or freezing orders to secure your position.
- Monitor counterparties for early warning signs, such as non‑payment or asset movements.
Contract Counterparties & Landlords: Strengthen Your Position
- Build insolvency protections into contracts, such as step‑in rights, milestone payments, and performance security—particularly relevant given failures in construction and hospitality.
- Follow a clear escalation process when defaults occur, aligned with today’s faster enforcement landscape.
Early Warning Signs of an Unstable Financial Situation
- Repeated late or partial repayments
- Requests to renegotiate repayment terms
- IRD arrears or non‑compliance
- Silent construction sites, suspended work, or supplier withdrawals—common in high‑risk sectors
How Norling Law Helps You Navigate This Environment
Norling Law’s insolvency experts advise directors, owners, and lenders on:
- Rapid insolvency risk assessment and clear next‑step options
- For directors and owners, negotiations with creditors before unmanageable debt piles up (including IRD tax debt), and practical restructuring and insolvency options
- For creditors, swift legal action against debtors: statutory demands, winding‑up applications, security realisation, and caveats
- Restructuring and recovery strategies tailored to today’s elevated insolvency landscape
With companies under liquidation at their highest in more than a decade, acting early and strategically gives you the best chance of protecting assets.
Contact Norling Law for decisive, practical guidance tailored to your situation. Book your 30-minute consultation today.
