Re-Use of Prohibited Company Name or Trading Style
Where a director of an insolvent company wishes to continue to be involved in a successor business or any business using the same or similar trading name, he needs to be aware of the threat of possible criminal or civil liability.
Provisions were introduced by S.216 of the Insolvency Act 1986 with the intention of deterring “rogue" directors some of whom had been involved in multiple liquidations with considerable losses to creditors, continuing to benefit from the customer goodwill attached to the trading name.
Under Section 217 of the Insolvency Act a director can be made personally liable for the debts of the new business even if trading under the protection of limit of liability. We can advise on the risks and the statutorily prescribed routes to avoid both criminal and civil liability.