Liquidation – it’s not the end!
If you’ve made the decision to put your company into liquidation, you may feel like your business dreams have been liquidated along with it.
However, this is not necessarily the case – liquidation doesn’t have to spell the end. In fact, you may be thinking about starting a new company after liquidation.
Voluntary liquidation gives company directors the opportunity to leave the mistakes of their old business behind and start afresh with a new company.
Can I be the director of more than one company?
In general, you can be the director of as many companies as you like. There are no automatic restrictions preventing the director of an insolvent company becoming the director of another company.
This means you can start a brand new limited company and become its director.
Starting a new company after liquidation – all is not lost.
Although it may feel like the end of the road, starting a new company after liquidation is perfectly achievable.
When your old company is liquidated, all of its relationships and contracts come to a close. However, this doesn’t mean you can’t take the business that operated within the old company forward into a new one.
It may well be possible to negotiate valuable contracts over to a new company, meaning you can walk away from the debts of the old company while salvaging the good bits.
Transferring the assets
If your old company had any assets, you don’t have to leave them behind. You can transfer them into your new company – as long as you pay for them.
You’ll need to obtain an independent valuation to make sure you’re paying a fair price for the assets, otherwise you may attract criticism from your old company’s creditors.
Can I reuse my old company name?
If you’re starting a new company after liquidation, you cannot give it the same name as the old company, or a name similar enough to suggest an association.
This is prohibited under Section 216 of the Insolvency Act 1986, and failure to comply can result in criminal action being brought against the director.
There are exceptions to this rule, but bear in mind that setting up a new company with the same name may lead to bad feelings amongst the old company’s creditors, even it is done legally.
What should I do next?
Liquidating your company is a bold step, but one that will ultimately provide relief. This can be a stressful and challenging time, but remember to focus on the light at the end of the tunnel.
With the advice and support of a business liquidation specialist, voluntary liquidation could be a springboard into exciting new business ventures.
If you’d like any more information about starting a new company after liquidation, don’t hesitate to get in touch.