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Where a phoenix company
is set up following the liquidation of the original company,
there are strict rules concerning the re-use of the company
name.
Section 216 of the Insolvency
Act 1986, states:-
(1) This section
applies to a person where a company ("the liquidated 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 the
period of 12 months, or
(b) it is a name which
is so similar to a name falling within paragraph (a) as to
suggest an association with that company.
(3) Except with leave
of the court or in such circumstances as may be prescribed,
a person to whom this section applies shall not at any time
in the period of 5 years beginning with the day on which the
liquidating company went into liquidation:-
(a) be a director
of any other company that is known by a prohibited name, or
(b) in any way, whether
directly or indirectly, be concerned or take part in the promotion,
formation or management of any such company, or
(c) 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.
(4) If a person acts
in contravention of this section, he is liable to imprisonment
or a fine or both.
(5) In subsection
(3) "the court" means any court having jurisdiction to wind
up companies; and on an application for leave under that subsection,
the Secretary of State or the official receiver may appear
and call the attention of the court to nay matters which seem
to him to be relevant.
(6) References in
this section, in relation to any time, to a name by which
a company is known are to the name of the company at that
time or to any name under which the company carries on business
at that time.
(7) For the purposes
of this section a company goes into insolvent liquidation
if it goes into liquidation at a time when its assets are
insufficient for the payment of its debts and other liabilities
and the expenses of the winding up.
(8) In this section
"company" includes a company which may be wound up under Part
V of this Act.
Section 217 of the Insolvency
Act 1986, states:-
(1) A person is personally
responsible for all the relevant debts of a company if at
any time -
(a) in contravention
of section 216, he is involved in the management of the company,
or
(b) as a person who
is involved in the management of the company, he acts or is
willing to act on instructions given (without the leave of
the court) by a person whom he knows at that time to be in
contravention in relation to the company of section 216.
(2) Where a person
is personally responsible under this section for the relevant
debts of a company, he is jointly and severally liable in
respect of those debts with the company and any other person
who, whether under this section or otherwise, I so liable.
(3) For the purpose
of this section the relevant debts of a company are-
(a) in relation to
a person who is personally responsible under paragraph (a)
of subsection (1), such debts and other liabilities of the
company as are incurred at a time when that person was involved
in the management of the company, and
(b) in relation to
a person who is personally responsible under paragraph (b)
of that subsection, such debts and other liabilities of the
company as are incurred at a time when that person was acting
or was willing to act on instructions given as mentioned in
that paragraph.
(4) For the purposes
of this section, a person is involved in the management of
a company if he is a director of the company or if he is concerned,
whether directly or indirectly, or takes part, in the management
of the company.
(5) For the purposes
of this section a person who, as a person involved in the
management of a company, has at any time acted on instructions
given (without the leave of the court) by a person whom he
knew at that time to be in contravention in relation to the
company of section 216 is presumed, unless the contrary is
shown, to have been willing at any time thereafter to act
on any instructions given by that person.
(6) In this section
"company" includes a company which may be wound up under Part
V.
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