Many directors worry about their future after company liquidation. Chris Worden explains the rules and how you can start again safely and legally.
- Liquidation closes a company, not your business career
- You can start a new limited company if you follow the rules
- Section 216 restricts reuse of the old company name/branding
- There are legal exemptions to Section 216
- Buying back assets must be at fair market value
- Disqualification or bankruptcy prevents restarting
Key Points
- Liquidation does not bar you from being a director again
- Follow Section 216 rules on company names
- Buy assets at fair value with proper valuation
- Register a new company and set up new accounts
- Disqualification or bankruptcy are the main barriers
What Happens After Liquidation?
Liquidation ends the old company, but most directors can start a new business. Chris Worden has helped many directors restart, keeping jobs and livelihoods intact.
Section 216: The Name Rule
If you were a director in the 12 months before liquidation, you cannot use the same or similar company or trading name for five years, unless you qualify for an exemption:
- Exemption 1: Buy the goodwill (name, brand, domain) from the liquidator and notify creditors/publicly advertise
- Exemption 2: Obtain a court order
- Exemption 3: Existing use by another company trading for over 12 months
Buying Back Company Assets
Assets can be bought back at fair market value, ideally close to the agent's 'insitu' valuation. Always use an independent agent and keep records to avoid criticism or claims of undervalue.
How to Start a New Company Legally
- Liquidate the insolvent company properly
- Understand your personal exposure (loans, guarantees, HMRC investigations)
- Buy back assets at fair value with agent valuation
- Register a new limited company with a new name
- Set up new bank accounts, insurance, and leases
When Can't You Start Again?
- If you are disqualified as a director
- If you are personally bankrupt (unless with court permission)
Why Starting Over Can Be Smart
Many directors, including Chris Worden, have rebuilt stronger businesses after liquidation. Liquidation can offer a clean slate and a chance to fix past mistakes.
Key Takeaways
- Liquidation is not the end—most directors can restart
- Follow Section 216 rules to avoid penalties
- Buy assets at fair value and keep documentation
- Disqualification or bankruptcy are the main barriers
- Professional advice helps ensure a safe restart
Frequently Asked Questions
- Can I be a director again after liquidation?
- Yes, unless you are disqualified or bankrupt, you can be a director again.
- What is Section 216?
- Section 216 restricts reuse of the old company name or similar names for five years after liquidation.
- How can I reuse my old company name?
- You must buy the goodwill from the liquidator and notify creditors, or obtain a court order, or have an existing company using the name for over 12 months.
- Can I buy back company assets?
- Yes, but you must pay fair market value, ideally based on an independent agent's valuation.
- What stops me from starting a new company?
- Disqualification as a director or personal bankruptcy are the main barriers.
Need help restarting after liquidation? Contact us for expert guidance from Chris Worden and the Director First team.
