Our firm is embracing social media.
And so it is that I’ve been let loose to write my first blog and, although at 26 years old I’m (arguably) “down with the kids’ and should be up on these kind of things, I have no idea what format a blog should take.
That being said, I’m told it’s meant to be informal, possibly critical and sometimes controversial – a bit like me then!
I’m actually going to go for an informative angle in this blog (yawn!) about how a director can avoid liability under section 216 of the Insolvency Act 1986 (I can see I’ve lost you already).
This section of the Insolvency Act will only apply to a director or business owner if he or she previously had a business which has gone in to administration or liquidation, and has continued to trade using the same name as the last business – so called ‘phoenix’ businesses.
Nasty letters from the Insolvency Service might appear on the door step (something I have actually seen more of in the last couple of months) or the director may find himself the subject of criminal proceedings if he uses a company name or trading name which is the same as a name used in a previous business which has gone bust.
Another harsh penalty is that the director might even be said to be personally liable for the debts of the ’new company’, removing the very raison d’etre of a limited liability company!
Scary ey? So is there anything the director can do?
Yes. All the director has to do is comply with a number of rules and he is then free to use whatever name he likes.
Which hoops the director has to jump through depends on whether the insolvent company is in liquidation or not.
If the company is not yet in liquidation then there is a notice procedure to follow. If the insolvent company IS in liquidation then the director will have to apply to Court for consent to use the name or resign as a director of the new company which has been using the “prohibited’ name (the Government’s words not mine) to trade the business.
If you’ve not nodded off yet and you need help or advice in relation to the above then please feel free to give me a call.