Using the same or similar name of a company that is in insolvent liquidation is prohibited by s 216 of the Insolvency Act 1986 (IA).
A director who acts in breach of s216 by being a director of, or being involved in the promotion, formation or management of a company that is using a prohibited name, risks personal and potentially criminal liability (s217 IA 1986) – unless one of three “excepted cases” set out in the Insolvency Rules 2016 (Rules) applies.
The purpose behind s216 IA was to stop the so called “phoenix” syndrome whereby a shelf company was brought to life using the same or similar name to a company that has gone into liquidation by the same directors. The prohibition and risk for acting in breach of s216 was…
