Prohibited name definition

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How a director of an insolvent company can use a prohibited name and avoid personal liability

The purpose of this Practice Note is to:•summarise section 216 of the Insolvency Act 1986 (IA 1986)•discuss the exceptions to that section and how those exceptions can be used in practiceWhat is the prohibited name rule?IA 1986, s 216 applies to a person where a company has gone into insolvent liquidation (the liquidating company) and they were a director or shadow director of the liquidating company at any time in the period of 12 months ending with the day before it went into liquidation.For the purpose of IA 1986, s 216, a name is a prohibited name in relation to such a person if it is a name:•by which the liquidating company was known at any time in that period of 12 months, or•which is so similar to the name of the liquidating company so as to suggest an association with that companyExcept with the leave of the court or in such circumstances as may be prescribed, a director or shadow director may not at any time in the period...

Prohibited names under section 216 of the Insolvency Act 1986

The purpose of section 216 of the Insolvency Act 1986Section 216 of the Insolvency Act 1986 (IA 1986) is aimed at preventing phoenix companies from causing a disadvantage to creditors by creating more transparency surrounding the re-use of company names.A phoenix company may typically be where a director or directors trade a successive company with a similar name, taking the valuable parts of the company in liquidation, leaving behind its creditors. The re-use of the name is seen by many as a way of deceiving creditors into thinking they are dealing with the same company. This practice (known as phoenixing) is therefore met with distrust by creditors.The Insolvency Service has produced guidance on the law relating to the practice of carrying on a business through a series of companies where each becomes insolvent, ie 'phoenix companies'.In some circumstances, the purchase of the business and assets of the company in liquidation and the continuation of the business can be positive, especially for employees, and can be a way of bringing money...

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Settlement agreement—IP dispute—short form

Settlement agreement—IP dispute—short form This Settlement Agreement is made on [insert date] (the ‘Settlement Date’) between the following parties (each a ‘party’ and together the ‘parties’): Parties 1 [insert name of party] a company incorporated in [England and Wales] whose registered number is [insert company number] and whose registered office is at [insert registered office] (‘[Name of party]’); and 2 [insert name of party] a company incorporated in [England and Wales] whose registered number is [insert company number] and whose registered office is at [insert registered office] (‘[Name of party]’). Background (A) [The parties are engaged in a dispute regarding [insert details of the dispute, including material facts, potential causes of action and alleged losses] [full details of which are set out in the Schedule attached] (the Dispute). AND/OR (B) The parties have issued various claims against each other [relating to certain aspects of the Dispute] in the High Court of Justice Business & Property Courts of England & Wales [Intellectual Property Enterprise Court OR...

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216 Restriction on re-use of company names

(1)     This section applies to a person where a company (“the liquidating company”) has gone into insolvent liquidation on or after the appointed day and he was a director or shadow director of the company at any time in the period of 12 months ending with the day before it went into liquidation.(2)     For the purposes of this section, a name is a prohibited name in relation to such a person if—(a)     it is a name by which the liquidating company was known at any time in that period of 12