Prohibited name???

[yosf]

Hi
my question is this
if a 'ltd' Co. go into liquidation, is it legal for the 'sole' director of that Co. to carry on using the previous name, (without the Ltd), under the guise of being a subsidiary of his other (sole trader) Company?
they are using the same website & Logo as the liquidated co., and trading from the same premises.
the Director did not apply to the court to use the name, and did not 'purchase' the total assetts/goodwill etc. of the old company.
the other 'sole trader' Co. has NOT been using the liquidated Co. name for the past 12 months (or ever)
any advice would be appreciated

 

[Alan R Price]

Hi
my question is this
if a 'ltd' Co. go into liquidation, is it legal for the 'sole' director of that Co. to carry on using the previous name, (without the Ltd), under the guise of being a subsidiary of his other (sole trader) Company?
they are using the same website & Logo as the liquidated co., and trading from the same premises.
the Director did not apply to the court to use the name, and did not 'purchase' the total assetts/goodwill etc. of the old company.
the other 'sole trader' Co. has NOT been using the liquidated Co. name for the past 12 months (or ever)
any advice would be appreciated

The prohibition imposed by s216 of the Insolvency act 1986 against using a similar name only applies to being a director of a limited company. If the director of the liquidating company wants to start trading in the same name, as a sole trader, there is no statutory reason he shouldn't.

Of course if he uses the intellectual property of the company (name, logo etc.) he may be liable to pay the company or its liquidator for the privilege of doing so.

 

[appyammer]

As much i know about the companies act i think,
According to Section 216 restricts campanies directors where companieshave gone into financially troubled liquidation from being adirectors of company using the same or identical name of the liquidated company.

whats to stop a company in liquidation using a similar name ie: (uk)

 

[yosf]

Thanks for the replies guys.
guess I was wrong, I read from the insolvency website that it stopped a director using the name with a new ltd co., but it also went on to say :' in addition, you may not be concerned in, or take any part in carrying on a business that is using a prohibited name if the business is NOT a limited Company (for example if it is a partnership or sole trader)'
so am I reading this wrong then?
:|

 

[Alan R Price]

Apologies. On rereading s216(3)(c), the prohibition seems to extend so that a person may not: "in any way, whether directly or indirectly, be concerned or take part in the carrying on of a business carried on (otherwise than by a company) under a prohibited name." I had never considered this to mean a sole tradership but it seems the Insolvency Service believes otherwise.

A director can take advantage of one or other of the exceptions to the prohibition (see Insolvency Rules 4.228-4.230), usually by buying the "whole or substantially the whole of the business of the insolvent company" from its liquidator or administrator.

Sorry for any confusion.