I see where you are coming from. The legislation as I understand it excludes directors of an existing enterprise from setting up a company which effectively looks like it is same company, that is without the specific permission of the court. The more likely appropriate mechanism would probably be an administration order if they directors wanted to continued the business in a restructured manner.Thanks for your input. Very helpful. The following is the situation in the UK. There are some "get out of jail" cards which are not mentioned.
Essentially insolvency legislation prohibits any person who has been a director or shadow director of a company at any time for a period of 12 months preceding that company entering liquidation from carrying out the following for a period of 5 years following liquidation:
* Be a director of a company that operates with a similar name or trading style (so close to infer an association with the liquidated company);
* Be involved in any way (whether that be directly or indirectly) in the promotion, formation or management of another company with a similar name or trading style;
* Be involved in any business which trades in a similar trading style as the company which entered liquidation.
Breaching this legislation is a criminal offence and therefore leaves the person(s) involved liable to imprisonment and/or a fine, and possible disqualification from being a director in the future. Also, should the subsequent company or business fail leaving a shortfall to its creditors, then the person(s) involved may also be made personally liable for the shortfall to creditors.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?