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 Payments 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
Consortia Service Group
Kelly Burton • Service Agency • Pre-Pack Administration
A Cardiff security specialist has been bought out of administration saving all 44 jobs.
Zenith Security Specialists Limited was set up in 2009 providing manned CCTV security systems to national and private firms, local authorities and small businesses.
Trading as Consortia Service Group, the company was based at Cardiff Bay Business Centre and was taken over in January 2015 by director Ozma Nasir with a view to expanding the business.
Administrators Kelly Burton and Joanne Wright from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 May after the company faced mounting pressure from HMRC in respect of PAYE and VAT arrears.
Miss Masir took advice from Wilson Field and the business was sold in a pre-pack administration to Consortia Services Group Limited as a going concern saving all 44 employees’ jobs.
Kelly Burton from Wilson Field said:
“Unfortunately, a number of the inherited on-going contracts were unprofitable. Despite attempts, the company did not have sufficient time to turnaround the business and was struggling to service both its on-going overheads and significant HMRC liabilities.
“Attempts were made to source further additional funding proved impossible and so the decision was taken to enter administration.
“Following discussions with the director, the business was sold as a going concern, safeguarding all 44 employees’ jobs and offering a better return for the company’s creditors than alternative options.
“The new company will be under the same management offering the same standards of service to its customers.”
Mercer Group
Kelly Burton • Construction & Engineering • Pre-Pack Administration
All 38 jobs have been saved at a Bolton construction trade company after administrators at Wilson Field sold the company in a pre-pack deal to existing management.
Joint administrators Kelly Burton and Lisa Hogg from Wilson Field were called in by directors of Mercer Group on 7 July 2017.
The company, based at Turton House on Wellington Road in Bolton, had suffered due to serious underpayments from clients resulting in VAT and PAYE arrears and issues with HMRC.
Mercer Projects Ltd bought the company for an undisclosed sum with all 38 staff from across the group being transferred to the new company under TUPE.
As well as saving jobs, estimated redundancy and holiday pay totalling almost £97,000 were mitigated resulting in a better return to creditors.
Kelly Burton, director and insolvency practitioner at Wilson Field, said:
“We are pleased that the sale of the company to Mercer Projects has resulted in all 38 jobs being secured and that the business will continue to trade.
“We determined that a pre-packaged sale would be in the best interests of creditors.”
Director Alison Mercer said:
“This has been an uncertain and very difficult period for Mercer Group but advice from the administrators at Wilson Field has made the whole process less stressful. Their communication and procedure and working closely with them has meant we have been able to keep all 38 staff.
“With our strong reputation within the sector as a multi trade company and with the same staff team, we were confident that the company has a viable future.”
Alison added:
“It is very frustrating when events which are outside of your control threaten the very existence of your business and the jobs of a loyal workforce. Working with our advisors and staff, the future of Mercer Projects now looks very positive and we are in a position to offer our customers the same high quality of products and service.”
The companies began as Mercer Brothers Limited in 2004 and D Mercer and Sons Ltd in 2009 as plastering only businesses and quickly evolved through training and business expansion into a multi-trade company, to become known as Mercer Group.
During a period of quadruple growth between 2012 and 2013, the company relocated its offices to Bolton and undertook work in both the public and private sectors including residential, educational, medical and commercial properties.
Areas of expertise included demolition, plastering, screeding, tiling, flooring, joinery, painting and decorating, structural and ground works and roofing.
It also worked in partnership with a number of local colleges and schools to provide apprenticeship schemes for 16-24 year olds to gain experience, skills and qualifications in the construction industry. Mercer Projects has continued to provide apprenticeships and currently has 4 apprentices who are working on our construction sites.
Gosschalks Solicitors of Hull advised and dealt with legal work with asset sales through Ian Maycock of Charterfields Surveyors in Manchester.
Statestrong Limited
Kelly Burton • Manufacturing • Administration, Creditors' Voluntary Liquidation (CVL)
Insolvency experts at Wilson Field have helped turn around the fortunes of a loss-making manufacturing company in Lancashire providing a new future for its 80 employees.
Businessman Russell Blaikie acquired the struggling 40-year-old Statestrong Limited, headquartered in Lytham St Annes, through a pre-pack sale and has been able to help the company immediately utilising his expertise in manufacturing and management.
Arrangements for the purchase of Statestrong’s business and assets were negotiated by Sheffield business specialists Wilson Field, who effected the sale shortly after being appointed.
The company, which manufactures and supplies aerosol and liquid products for use in health and beauty, household, automotive and industry globally, posted sales of £12m last financial year, but had suffered pressure from creditors with outstanding arrears.
The total value of the deal is undisclosed but includes the business and the assets of the company based on Boundary Road in Lytham St Annes and Tarporley in Cheshire, which will now trade as Statestrong Products Limited.
Mr Blaikie said:
“Transactions of this nature are sensitive and require careful handling. The team at Wilson Field provided exactly the right professional approach.”
Wilson Field’s insolvency practitioners Kelly Burton and Joanne Wright worked closely with Mr Blaikie along with senior corporate case administrator Gareth Kinneavy.
Kelly Burton, said:
“The company had a wealth of expertise but was straddled with financial liabilities which ultimately made its future questionable. Looking forward, a previously distressed business now has a viable future.”
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