Data gathered by KPMG shows that administration and receivership appointments – typically affecting bigger businesses – decreased by 46% compared to the same quarter last year.
A quarter on quarter comparison also shows a decline in business failures, falling from 19 to 15.
Blair Nimmo, KPMG’s head of restructuring in Scotland, said, “Our latest stats show the number of corporate insolvencies largely support most, if not all, other economic indicators in confirming a recovering economy in Scotland.
“We are seeing fewer large company insolvencies coming across our desk, suggesting most corporates are in better shape than they have been for some time.
“We’re also finding that many are contemplating transactional activity for the first time for several years.”
Despite the decrease in the number of receivership appointments, there was a marked increased in the number of liquidation appointments.
In total, the number of liquidation appointments – normally affecting smaller companies – grew from 167 to 225 between 2013 and 2014 – a 35% jump.
Looking at the quarterly figures, the number of liquidation appointments appears to have slowed; the difference between the last two quarters is just 2%. Similarly, with 225 liquidation appointments, the number remains lower than the total appointments from the last quarter of 2013, which saw 231.
Nimmo said, “Although the number of liquidations looks to have increased, our experience suggests that the majority of these appointments have been made for companies that ceased trading some time ago – with HMRC’s involvement marking the end of a process rather than being an indication of a sudden increase in numbers.
“Nevertheless, there are businesses which have been left with legacy issues, including for example, weak balance sheets where some form of restructuring is still required.
“This, however, will not give rise to formal insolvencies and we are busy at present assisting companies in dealing with cost reduction, cash management and balance sheet restructuring to help combat these issues.”
Earlier this week, business minister Jo Swinson announced new proposals that would ensure insolvent businesses were still supplied with vital utilities.
Giles Frampton, president of insolvency professionals’ trading body R3, said the measures would help potentially viable businesses recover in the long term.
“Contract cancellations and ‘ransom’ charges which take effect on insolvency are one of the biggest obstacles to business rescue that insolvency practitioners come across,” Frampton said.
“They force the closure of potentially viable businesses, posing unnecessary risk to jobs.”
Frampton said that R3 estimates that banning termination clauses in supply contracts could help save 2,000 businesses a year.
He said, “Business rescue is in the interests of both creditors and insolvent businesses and their employees. Turning a business around can be a much better outcome than that business being liquidated.
“Scrapping termination clauses will give many struggling businesses a better chance of survival and should boost the UK’s business rescue culture.”
A spokesperson from the Scottish government said, "We all know the worth of businesses to our communities, and that a downward trend in the number of business failures means that livelihoods are being protected.
"We are delighted that the good work that the Scottish government has invested in supporting Scottish businesses is reflected in the positive story told by these latest quarterly figures from professional services firm KPMG."