Can I re-start my business without the debt?
Re-Start Your Existing Business Using a Creditors’ Voluntary Liquidation
I’d like to re-start is this possible with liquidation? How can you help me with this?
It can be done smoothly and quickly and most importantly within the law!
When a company is placed into liquidation all of its contracts and relationship come to a close. This doesn’t have to mean that the business that operates within the shell of the company can’t be uplifted and placed into a new company taking the good bits forwards and starting afresh.
This can mean that worthwhile contracts can be negotiated over to a new company.
From here the idea of the phoenix or pre-packed business is born.
FA Simms provides the Start Afresh service for such a situation.
What Are The Restrictions On Re-Starting The Business of a Liquidated Company?
There is no automatic restriction on a Director of an insolvent company being a Director of another company meaning that you can start a new limited company and become a Director of that company.
However if you want to start a new company using the same or similar name as the liquidated company, there are certain restrictions.
Restrictions on Re-Use of A Company Name
As a Director of a limited company which has been placed into insolvent liquidation, you are restricted from using the same name or a name so similar to suggest an association under Section 216 of the Insolvency Act 1986. This applies to the company name and any associated trading names or styles. There are various penalties for not complying with the legislation.
There are some exceptions to S.216 and one of those would be to purchase the whole or substantially the whole of the assets of the company from the liquidator. You would then be required to write to all of the creditors of the existing company and place an advert in the London Gazette to advise that you are to become a Director of a company with a same or similar name.
Transfer of Goodwill and Assets
You should not transfer the assets of the insolvent company into a new limited company without making or intending to make a payment for them. An independent valuation will need to be obtained to ensure that you are paying a fair price for the assets to avoid criticism from the creditors of the insolvent company.
The existing company will then be liquidated and the liabilities will remain as a creditor of the company in liquidation except those for which Directors have given a personal guarantee.
This information is a brief summary of starting again without the current liability and here at FA Simms we can provide full details of all of these points.