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
ARB (Sound Vision Light Power) Limited
Kelly Burton • Leisure & Hospitality • Administration
Wilson Field has secured a new future for a Banbury headquartered events management company, which boasted clients including Crufts, Tour of Britain and Virgin London Marathon after it was bought out of administration.
ARB (Sound Vision Light Power) Limited was established in September 2014 and specialised in event hire including providing audio visual solutions equipment, hire and installation.
The company, which traded from Coton Cottage, Chacombe near Banbury, called in administrators from Sheffield-headquartered Wilson Field for formal insolvency advice.
The company, which has an impressive client list and relied solely on sub-contractors as and when needed, suffered VAT and HMRC issues as a result of a period of illness.
Kelly Burton and Lisa Hogg from Wilson Field were appointed as joint administrators on February 20 and concluded a pre-packaged sale of the business and assets for an undisclosed sum to ARB Motors Limited, lead by the same management team.
Kelly Burton, director and licensed insolvency practitioner at Wilson Field said:
Wilson Field was brought in to look at the situation of the business.
The focus on the company had diluted during a period of illness of one of the two directors. A debt was due to HMRC and a repayment proposal was rejected resulting in the need to protect the business and assets via a formal insolvency procedure.
The pre-packaged sale means the business, which was an established player in event management at large scale events, has a bright future moving forward.
The loss of a major employee’s input through illness can harm an organisation and it is important for businesses to seek help should this arise. Timing is essential to keep focus on the business.
ARB has combined experience of more than 100 years and provided hire equipment such as indoor and outdoor PA systems, single and double-decker commentary units, street sound vehicles, exhibition TVs, stage lighting and mobile power in both primary and secondary distribution.
Oldham Precision
Kelly Burton • Construction & Engineering • Administration
Machining engineers Oldham Precision has been bought out of administration saving all 12 jobs.
The company’s principal activity was the sub-contracting manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.
Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.
Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.
After advice from Wilson Field, the business was sold to the existing management team as a going concern saving all 12 employees’ jobs.
Kelly Burton, director in the Leeds office at Wilson Field said;
“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 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.”
Bay Cleaning Solutions
Kelly Burton • Other • Pre-Pack Administration
Administrators from Wilson Field have helped safeguard all 245 part time jobs at a Welsh commercial cleaning company after it was sold in a pre-pack deal to existing management.
Joint administrators Kelly Burton and Lisa Hogg from Yorkshire-based Wilson Field were called in by directors of Swansea-based Bay Cleaning Solutions on 19 October 2017.
The company, based at Walter Road in Swansea, had seen significant growth over the last two years but increased direct costs and administrative expenses had rendered the company loss-making.
Cash flow problems had resulted in the accumulation of substantial tax arrears and other debt and despite attempts to seek increased borrowing and arrange a payment plan with HMRC, the company was placed into administration.
MRB Cleaning Limited bought the company with all 245 part-time staff being transferred to the new company under TUPE.
In saving all the jobs, Wilson Field mitigated employee termination claims in the nature of wage arrears, accrued holiday pay, redundancy and pay-in-lieu of notice which equates to almost £137,500, offering 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 MRB has resulted in all 245 jobs being secured and that the business will continue to trade. This is a substantial number of jobs saved. We determined that a pre-packaged sale would be in the best interests of creditors.”
BCS has over three decades of experience in the field of commercial cleaning with its core business relying on high footfall premises such as pubs, clubs and restaurants.
It also worked in areas including commercial cleaning, specialist cleaning, building maintenance, student accommodation, end of tenancy, hard floor and domestic cleaning.
Robert McArdle of David Currie & Co of Manchester dealt with asset disposal while Shulmans Solicitors of Leeds handled the legals.
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