Director fined, given community service and then ordered to pay a confiscation order of £100,000 plus costs.
ThorntonRones advises directors on how to avoid this exposure – to date, directors who have acted upon our advice have never been pursued.
It is a criminal offence to continue trading using the name of a company which has gone into insolvent liquidation (a prohibited name) – Section 216 of the Insolvency Act 1986 – and applies to anyone who was a director or shadow director of the company any time in the preceding 12 months for a period of 5 years following the liquidation.
What is often missed is that it applies to the use of not only a registered name, but also any trading name, and even if the future trading is not through an incorporated entity i.e. in partnership or as a sole trader!
It is a criminal offence - successful prosecution could lead to a fine, a prison sentence or both.