HMRC WONT BE HAVING IT EITHER!!!!!

INS45340 - Successor companies: Restriction on re-use of company name: What is a trading name, or a name ‘so similar as to suggest an association’?

Section 216(2) IA 1986 provides the name of the director’s second company will be prohibited if, compared to the liquidated company

• it is the same as any name by which the liquidated company was known at any time in the 12 months before its liquidation
• it is so similar to any name by which the liquidated company was known at any time in the 12 months before its liquidation as to suggest an association with the liquidated company.

For example, if a company went into liquidation called Freda Jones Limited, and it had traded as ‘Westshire Building’, then prohibited names for the second company would include:

• Freda Jones (2000) Limited
• Westshire Building Limited
• Westshire Building (Contract Services) Limited
• Rapid 4000 Limited trading as Westshire Building
• Rapid 4000 Limited trading as Westshire Building and Maintenance

Consider whether there is an association between any name by which the old company was known to its customers, and any name by which the new company is known to its customers. The Insolvency Act is drafted widely on this point and so most situations where the director is attempting to capitalise on the old company’s goodwill will be caught.