The precise restrictions that apply depend on the circumstances and Director conduct that led to the company’s insolvency. It is possible to re-use a company name following insolvency, but The Insolvency Act 1986 places certain restrictions on Directors which can limit the practical benefit of small company owners to do so. What Does the Insolvency Act Say About Using a Previous Trading Name After Liquidation? There can be considerable benefit in retaining and maintaining that value. We aim to prevent loss and damage, including loss of valuable brand assets, by assisting companies in litigating and defending claims.īuilding up goodwill takes time, effort, and capital. Why is a Company Name Important?Ī company’s failure can be caused by external circumstances and disputes.
NAME BRAND LIQUIDATION FULL
Any underlying assets of the old company must be sold at full price - not undervalued - to the new entity.
But the courts will not allow this to occur unless creditor interests are maximised.
UK law protects both creditors and the general public from what is referred to as phoenix companies.Ī phoenix company “rises from the ashes” of an insolvent business. Typically, directors can use any existing intellectual property assets in the business featuring the name.īut there are pitfalls to using a company’s former brand and trading style. It can save considerable time and money compared to building a brand from scratch. There are multiple benefits of using the company’s established trading name, including:įor a company that retains positive brand associations despite undergoing financial hardship, an existing trading name can offer a head start to getting the business back on a solid footing. It can be better to try to resist forced liquidation to avoid having to deal with these issues.įlout the rules, and you could face some severe penalties. It is possible to use a previous trading name from a company that has gone into liquidation. Are you the owner or director of a business that is at risk of liquidation but wishes to continue trading under the same company name?
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