Contrary to what a lot of people think, there is no automatic restriction on being a director of a limited company if you have previously been a director of a company that has gone into Liquidation or is currently in Liquidation. This means that if the right business decision is to liquidate your existing company and start again with a new debt free company, you are able to do so. This ability to restart a business is important in supporting entrepreneurship by giving people another chance to get it right.

with the right help and guidance there is no reason why you can't get your business back up and running.

In certain circumstances. a new company can use a similar name to a company that is being liquidated and is in a similar line of business. Where this occurs, the new company is often referred to as a Phoenix company.

However, if you have been a director or manager of a company that has gone into liquidation, there is a restriction on the reuse of a similar name or trading style to that company. Essentially, you are barred from being a director of a company with a similar name or trading style unless you satisfy any one of three exceptions.

The 3 exceptions are summarised in simplified form below:

Exception 1: You buy the rights to the name from the liquidator and then provide suitable notification to creditors by correspondence and advertisement.

Exception 2: Successfully apply to the Court for leave to use the name following liquidation.

Exception 3: If you had been a director of the new company for at least 12 months prior to liquidation and it had been actively trading for this period using a similar name.

Acting as a director without correctly complying with one of these exceptions is a criminal offence and you can also be made personally liable for the debts of your new company. Because of the potentially severe consequences of non-compliance and the complex nature of these exceptions it is extremely important that you get the right advice at an early stage. With the right advice and guidance though, there is no reason why you can't get your business back up and running.

We can help you with all aspects of setting up a new company from initial company registration to complying with legislation, opening a bank account, getting appropriate funding, getting business insurance or finding an accountant who will work with you to support your business. Call us to discuss your new business further on 0800 066 3122