Can I reuse my company name after liquidation?
Reusing a company name after liquidation is possible, but it depends on the type of liquidation and restrictions from The Insolvency Act. If your company was solvent and closed through a Members’ Voluntary Liquidation (MVL), you can usually reuse the name without restriction. Following an insolvent liquidation, such as a Creditors’ Voluntary Liquidation (CVL) or compulsory liquidation, it’s still possible to reuse the company name, provided the legal conditions under the Insolvency Act are met.
The reuse of a company name can be a complicated issue. We can provide you with free, confidential advice on this issue and can advise on your unique circumstances.
When can’t you reuse a company name after liquidation?
For the same name to be considered as prohibited, it must have been associated with the insolvent company for at least 12 months prior to liquidation. If you have liquidated a company, you cannot carry out any of the following for five years after the liquidation of said company:
- Act as director of a company with a prohibited name
You cannot hold a directorship of a company that trades under a name that has been prohibited by Section 216. - Promoting a prohibited company name
You cannot be involved in the promotion, formation, or management of a company with a prohibited name. - Continuing the company name
You cannot be involved in the carrying on of a business which has a prohibited name.
What are the potential consequences of reusing a prohibited company name?
If you act in contradiction of Section 216 of the Insolvency Act and reuse a company name after liquidation without the required permissions, you could face penalties, including fines, director disqualification, imprisonment and the loss of limited liability.
What are the exceptions that may allow you to reuse a company name?
Certain exceptions can allow a new company to use the same name as a previous company that has been liquidated within the last five years.
- Purchase the business’s trading name
During the liquidation of an insolvent company, in some circumstances, you have the option of purchasing the entirety or part of the business of the company that is being liquidated under arrangements made by the insolvency practitioner. This purchase can also include the trading name and the right to use it. Notices must be sent to all creditors of the insolvent company within 28 days of the date of acquisition and it must also be published in the London Gazette. - Apply to court
You can apply to the courts within seven days of the date of the liquidation of your company to keep its name. You can then use it for up to six weeks or until a court decision is made. However, in this period they may decide to not rule in your favour. - Name already in use by another company/group of companies
Some companies are formed in groups and can have the same or a similar name. If one of these companies enters liquidation, an exception can be made to retain the liquidated company’s trading name so as not to affect the related companies. However, relevant criteria must be met:- The prohibited name must have been used by a company for the period of at least 12 months prior, ending the day before the liquidation of the insolvent company.
- During those 12 months, the relevant companies must have traded continuously and not been dormant for any period.
How our services can help you
If your company is facing financial difficulty and you are considering the liquidation of your company, we can help you understand the processes available and the reuse of a company name post-liquidation.
- Close your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your company, ceasing its trading operations, realising any assets, and removing the threat of creditor legal action. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed, your company’s unsecured debt will be written off and the company is dissolved, allowing you, the director, to move on.
- Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The company name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
How to get in touch with us: The next steps
- Speak with our initial advisers
Make contact with our team, via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems - Formally engage with Wilson Field
If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.
In summary
The reuse of a limited company name after an insolvent liquidation is prohibited under Section 216 of the Insolvency Act. There are exceptions which can be made, but this is dependent on your company’s circumstances. We will be able to advise you on your specific situation and the reuse of a company name.
Case Studies
Care Homes Claims and MS2U
Kelly Burton • Financial Services • Pre-Pack Administration
Jobs have been preserved at a Leeds-based group of claims companies after they were bought out of administration in a pre-packed sale.
Care Home Claims and MS2U worked with customers who had been mis-sold financial products and services including PPI or had been over-charged on care home fees.
Joint administrators Kelly Burton and Lisa Hogg from Sheffield-based Wilson Field were called in by the directors when the group faced financial difficulties.
The business and assets of the companies were sold, for an undisclosed sum, to Acquire Inc Ltd. As part of the deal, 32 employees of an associated company transferred to the purchaser.
Group managing director Joseph Battle said:
“Problems were encountered as a result of an unprofitable contract and accrued HMRC arrears which lead to a severe cash flow shortage. We took professional advice and worked with the administrators to enable the business to continue as a going concern and preserve jobs of existing staff. Despite this being a very difficult time, the outcome means the business can continue.
“With the same management team, we can assure clients the same high level of service in the future.”
Kelly Burton, director and insolvency practitioner at Wilson Field, added:
“These companies ran into difficulty following the over calculation of work in progress on a contract, coupled with an accumulation of HMRC arrears. The directors contacted us for advice and have worked closely with us to achieve this result.
“We are pleased that the restructuring of these companies has resulted in the businesses continuing to trade via the successor business.”
Berks Healthcare Services Limited
Kelly Burton • Healthcare • Administration
Wilson Field has advised on the sale of a Slough-nursing agency which was bought out of administration saving all 7 jobs.
Berks Healthcare Services Limited, which traded as Enchor Healthcare Services, specialised in providing healthcare professionals for the public and private sector.
It supplied registered general and mental health nursing staff, together with unqualified support and ancillary staff, to private hospitals and care homes in the areas local to the company’s offices in Slough, Portsmouth, Birmingham and Luton.
The company, headed up by healthcare professionals, called in administrators from Wilson Field after suffering from a fall in turnover, which left it struggling to meet unsustainable historic legacy debt. It had also been issued a winding-up petition from HMRC.
Kelly Burton and Emma Bower were appointed as joint administrators on 14 June 2018 and concluded the sale of the business and assets for an undisclosed sum to an unconnected company Connect Care & Support Limited, also based in Slough.
Kelly Burton, director and licensed insolvency practitioner at Wilson Field said: “The company had a turnover in the region of £2.9m per annum in 2017. However this is a very competitive marketplace, which is primarily price driven and recent minimum wage legislation changes had also impacted on the company’s potential profit margins.
“As administrators, we sought a purchaser for the business.
“This pre-packaged sale to Connect Care & Support Ltd saved seven permanent jobs as well as numerous temporary agency staff.
“It has also mitigated employee termination claims in the nature of wage arrears, accrued holiday pay, redundancy and pay in lieu of notice estimated to total £29,576 as the liabilities have transferred to the successor business under the TUPE regulations.
“This means the business has a new future moving forward.”
Berks Healthcare Services Ltd was incorporated in January 2015, but can be traced back to February 2007. Enchor Health Care was recognised and registered as Recruitment Consultants providing both permanent & temporary staffing solutions to many different Health and Social Care settings. It also had supported living and rehabilitation centres.
Print On Solutions Limited
Kelly Burton • Service Agency • Administration
A Leeds print company has been bought out of administration saving all 54 jobs.
Print On Solutions Limited was set up in 1999 years ago and went from start-up business to the largest envelope overprinter in the UK with offices in Leeds and Bury, 12 litho presses and six digital presses.
Administrators Kelly Burton and Joanne Wright from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 11 April after the company, based in Century House, Holbeck, ran into financial difficulties following an ongoing dispute relating to a significant contract.
The directors took early advice and the business was sold to new company WEPOS Limited as a going concern saving all 54 employees’ jobs.
Kelly Burton from Wilson Field said:
“Following discussions with the directors, the business was sold to WEPOS Limited as a going concern, safeguarding all 54 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team.”
In 2003 Print On expanded by moving to a 12,000 sq ft, purpose-built factory in Leeds, designed to offer the business a state-of-the-art platform for growth.
The expansion of the group was through strategic acquisitions and mergers of envelope manufacturers. Tower Envelopes in Bury merged with Print On in 2010 and became the Lancashire division.
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