Can I reuse a company name after liquidation?

Reusing a company name post-liquidation

If your company is liquidated it means that all affairs have been wound down, its assets sold, creditors repaid as far as possible, and its name has been removed from the register of active companies held by Companies House.

The liquidation of one business doesn’t necessarily prevent you from starting a new company and taking on the role of director in the future, however. In many cases business failure is a result of elements outside the control of company directors, such as general market decline, rather than deliberate action to run the business into the ground. Due to this, the majority of directors of liquidated companies will not be prevented from incorporating a future venture.

With that being said, if you do choose to start a new company, there are stringent rules when it comes to reusing the name of a company which has been liquidated. Knowing these rules is imperative to ensure you do not fall foul when setting up a new limited company.

Why reuse the name of a liquidated company?

When you start a new company following liquidation, you may feel that using the same name, or one that sounds similar, can help you get the business off the ground quickly as it’s already a recognised commercial entity in your industry.

However, it is precisely for these reasons why rules and restrictions are in place. The rules on reusing company names are laid out in Section 216 of the Insolvency Act, 1986 and are in place to prevent directors deliberately trying to misrepresent themselves and their company, and mislead former creditors or the public at large. Passing off a newly incorporated company as being the same entity as a previously liquidated company, is strictly against these rules.

There are serious consequences to incorrectly reusing the name of a liquidate company; the rules are extremely strict, and it’s important to be aware of the potential consequences of getting it wrong. Failure to adhere to these restrictions include personal liability for any debts of your new company, financial penalties, and even imprisonment in the most serious cases.

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Reusing a company name after liquidation

While strict regulations prohibits the reuse of the same or similar company name after that company has been liquidated, there are three exceptions which can allow you to use the name of a liquidated company. They are:

You obtain permission from the court

You can apply to court to reuse the name of your liquidated company, but you must do so within seven days of liquidation. This process is known as applying for ‘court leave’ – essentially, requesting official permission to use the same or a similar name.

You buy the business assets from the liquidator

If you purchase the whole - or the vast majority of the business - from the liquidator, you may be able to reuse the company’s name. An important part of this process, however, is to inform the creditors of your liquidated company that you’ll be reusing the company name, and also place an advert to the same effect in the Gazette.

You use an existing name

If the new company has used the name for at least 12 months prior to the liquidation taking place, you may be able to continue to use the name, The new company must have been trading during this time, not simply registered and left dormant.

Reusing a company name outside of these three scenarios could have serious ramifications for you and other directors. Our experts at UK Liquidators can arrange a free consultation to establish whether you can legally reuse your company name – we operate from an extensive network of offices throughout the country.