Can my company's name be reused after bankruptcy?

 
Bankruptcy orders are made by courts against individuals who are no longer able to make payments to clear their debts, following a petition either by the debtor or their creditors if they are owed more than £750. If you are declared bankrupt your possessions and affairs are placed into the hands of a trustee known as the Official Receiver (OR) or Insolvency Practitioner (IP). It is advisable to contact a solicitor for legal advice prior to declaring bankruptcy.
 
If you are a company director you are automatically disqualified from being a director by a bankruptcy order, for the duration that it is in force. The OR or IP is able to sell your business in order to settle your debts, and may also dismiss any staff employed by you. They are also able to sell your home and any luxury possessions you may own. You will only be allowed to retain essential personal possessions and enough money to afford to live. Once your assets are administered, any remaining debts are written off. In total, it usually takes 12 months to be discharged as a bankrupt, at which time you may resume your normal affairs.
 
If your company is liquidated in such circumstances, there are restrictions on any new company name that you may later decide to form. These restrictions are intended to prevent the formation of ‘phoenix companies’, which emerge trading with the same name shortly after a previous business was liquidated. 
 
The restrictions apply to companies with prohibited names. These include any names which your previous company traded under, including those registered at Companies House, any other trading name or any name similar to those which suggests an association with the liquidated company. The restrictions apply to you if you were a company director, or acted as a company director within 12 months of the date of the liquidation. 
 
The restrictions prevent you from forming, promoting, managing or being a director of any company with a prohibited name for five years from the date of the original liquidation. They also apply to any sole trader business or partnership formed under that name. It is a criminal offence to breach of these restrictions, with punishments including a fine or a prison sentence. If you are considering formation of a company following bankruptcy you should consult your solicitor for legal advice prior to making any commitments.
 
If you would like to obtain legal advice on bankruptcy, Contact Law can put you in touch with a local specialist solicitor free of charge. So, if you have any questions or would like our help in finding local solicitors please call us on 0800 1777 162 or complete the web-form above.
 
 
 
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