A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
Can I close a company with debts and start again?
Yes - closing an insolvent company through a proper liquidation and starting a new business afterwards is lawful, common, and consistent with how limited liability is meant to work; what the law polices is not the fresh start but the shortcuts some directors take to reach it.
In this guide you'll learn the legitimate route, the strict rules on reusing the old company's name, how a new company can (and can't) acquire the old one's assets, and the phoenix patterns that attract investigation.
The difference between a lawful fresh start and a problem is almost entirely about process - so it's a good idea to plan the ending and the beginning together, with advice, rather than improvising either.
The legitimate route, step by step
Close the old company properly - a Creditors' Voluntary Liquidation, with a licensed liquidator, employees' claims processed, and the conduct review passed as honest directors routinely do.
Debts without personal guarantees die with the company; your ability to be a director of a new company is unaffected - there is no waiting period and no permission to seek.
Then start clean: new company, new capital, and any assets acquired from the old company bought properly, as covered below.
What the legitimate route never includes: striking off a company with debts to skip the scrutiny - the failure modes of that shortcut (restoration, objection, investigation of dissolved-company directors) are the subject of their own guide.
The name rules - the trap that catches genuine restarts
Section 216 of the Insolvency Act prohibits directors of a liquidated company from being involved, for five years, with a business using the same or a similar name - "similar" meaning close enough to suggest association, which catches trading styles, not just registered names.
Breach is serious out of proportion to how innocent it feels: it's a criminal offence, and it makes the director personally liable for the new company's debts - converting the fresh start into unlimited exposure.
There are three statutory exceptions - notably where the new company buys the business from the liquidator and gives the prescribed notice to creditors, and where court permission is obtained - but they are formal, deadline-driven, and precisely the kind of thing to do with advice rather than discover afterwards.
If the new venture's name is anywhere near the old one's, treat that as a legal question, not a branding one.
Can my new company buy the old company's assets?
Yes - from the liquidator, at independently assessed market value, with real money.
That purchase is legitimate and everyday: equipment, stock, the website, sometimes the business itself - and paying the liquidator properly puts value into the creditors' pot, which is the whole point.
What's not legitimate: transferring assets out cheaply before liquidation (a transaction at undervalue the liquidator can reverse), or the new company simply "adopting" the old one's assets, contracts, and customers without paying - both of which feature prominently in the personal liability claims that follow.
Where the business as a whole has going-concern value, a pre-pack administration is the regulated version of directors buying it back - with the independent-evaluation safeguards that make the deal defensible.
What is phoenixing, and when does starting again become a problem?
The pattern the rules target: serial insolvency as a business model - build debts (especially tax debts), liquidate, restart, repeat - with each incarnation shedding creditors.
The countermeasures are real: HMRC security demands from directors with a history, personal liability provisions aimed at repeated non-payment, disqualification for conduct across companies, and the Insolvency Service's power to investigate directors of dissolved companies.
None of this touches the ordinary director whose one company failed honestly - the fresh start is theirs by design - but a second or third failure changes how everything is read, which is worth knowing before the second one.
Doing it properly
The sequence that works: advice first, an orderly CVL, the name question answered in writing, assets bought at valuation through the liquidator, and the new company capitalised to survive - because the most common killer of restart companies is inheriting the old one's undercapitalisation along with its van.
Call our licensed insolvency practitioners in Manchester on 0333 023 5090 - tell us about the ending and the beginning together, and you'll get a plan that makes both lawful, clean, and final.
InsolvencySupport.co.uk is operated by Xeinadin Corporate Recovery Limited (company no. 11415156), 8th Floor, 100 Barbirolli Square, Manchester M2 3BD. Our insolvency practitioners are licensed and regulated by the ICAEW.
This article is intended for general information purposes only and does not constitute financial, legal, or professional advice. Always take advice from a licensed insolvency practitioner about your specific position.
Reviewed by Alan Fallows, Licensed Insolvency Practitioner, ICAEW.