It can be extremely difficult to let go of your company’s name after it has been put into liquidation. After putting so much work, time and money into your company, making your dream a reality, it can be tough to have to just walk away. That’s why so many company directors want to keep their company name after it liquidates. Many directors hope to give the company another go with the same name to keep the brand alive, learning from their mistakes the second time around.
Unfortunately, the Insolvency Act of 1986 prevents the re-use of a limited company name which has entered into liquidation. The name of the liquidated company will be known as ‘prohibited’ and if your company was known by any other name within the previous 12 months of it being liquidated, that name will be prohibited too. Similarly, any names that are close to or give an indication of relation to the original company will be dismissed too. Any directors who were involved with the running of the company within the previous 12 months of it being liquidated will also be included in this prohibition.
However, all is not lost if you’re really desperate to save your company name. There are some exceptions that will allow you to keep your company’s name after liquidation that we’ll outline here.
If your company is being liquidated as a pre-pack administration and you are able to purchase your entire company, along with all the debt, you can keep your company name and continue trading. In this circumstance, the insolvency practitioner on the case must outline why and how this course of action was determined to be the best decision. All creditors must be made aware of the decision and the information made public.
Applying for the name in court is another way of keeping your name. In this case, the application must be submitted to the court within the first 7 days of your company entering liquidation. Whilst the court makes its decision, you will be allowed to continue using the company name, or for 6 weeks, whichever comes sooner. This process is a risky one as the court can of course rule against you. So this course of action should be thoroughly thought through before a decision is made.
If you have several different companies that are named similar things to your insolvent company, or include the same name as your insolvent company, you can continue to operate these other companies without changing the name. For example, if you have three companies named Clarke Bell Manchester Ltd, Clarke Bell Birmingham Ltd and Clarke Bell London Ltd, and one becomes insolvent and has to enter liquidation, the other two can carry on trading using the Clarke Bell name as long as they have been in operation for the full 12 months previous to the insolvency.
It’s a tricky subject to tackle which is why it’s best to have licensed insolvency practitioners there to oversee each step of the process and ensure everything is being done in a completely legal way.
If you need help or advice relating to an insolvent company, contact us at Clarke Bell. We have an experienced and friendly team who can give you free, initial advice before you make any decisions about your company. Contact us today 0161 907 4044 / [email protected]