It’s understandable that you might want to keep a company’s name after it liquidates. After all, you’ve likely put in thousands of hours of work into that business at this stage.
Perhaps opening the business was a learning curve and you’re keen to give it another shot with the same branding, carrying on the benefits of all that hard marketing. Unfortunately, the Insolvency Act of 1986 prevents the re-using of a limited company which has been entered into a liquidation process. There are some workarounds, which we’ll discuss below, but for the most part the name of a liquidated company will be listed as ‘prohibited’, as will any other name the company was known by 12 months prior to winding up. This ‘prohibition’ applies to those directors who were involved in the running of the company up to a year before it liquidated.
“The Insolvency Act of 1986 prevents the re-using of a limited company which has been entered into a liquidation process”
The restrictions put in place by the insolvency act cover the name itself, as well as other names which are so close as to suggest an association to the original company, as well as the directors and shadow directors which were involved. We know that liquidation is in no way the end of the road for many, but a way of resolving a company’s debts so that the directors and shareholders may move on and learn from their experiences. But suppose they do move on and want to keep the original company name, what are the exceptions to the insolvency act?
1. If you come into some money as a director you are able to purchase the company in its entirety (including any debt) from the insolvency practitioner who has been appointed as liquidator. If this path is taken, then all creditors must be informed and the information must be made public .
2. The other way to go if you want to reuse the name of a liquidated company is to apply for the name in court. You’ve got to be quick off the mark though – this application must be submitted within 7 days of the company going into liquidation. During the application process you are allowed use the name for up to six weeks or until the court has made its decision. This is of course a risky route to take as the court may rule against the use of the name so it’s important to weigh up the pros and cons.
If your company has gone into liquidation then you’ll no doubt have a licensed insolvency practitioner on standby who will be able to offer advice and suggest the best course of action for you to take.