Can you keep a company name after liquidation?
Section 216 of the Insolvency Act, 1986, states that company names cannot be retained post-liquidation, apart from in very limited circumstances. Similar names are also included in this ruling, which is intended to protect creditors from further financial loss and ensure that members of the public are not misled into thinking that the company still exists.
The rule applies to the 12-months prior to liquidation, and to all directors or shadow directors in office at the company during the same period. It is regarded as a serious offence to contravene these regulations, with the potential for severe penalties including fines and even a jail sentence in the most serious cases.
These are the three exceptions to the ruling:
It is a serious issue if you contravene the Insolvency Act. The rules are there to protect creditor interests, and prevent directors from escaping responsibility in insolvency. You could be held personally liable for company debts, receive a substantial fine, or even go to prison.
Begbies Traynor can offer further advice to company directors facing insolvency. Call one of the team for a same-day consultation free-of-charge.