Phoenix Company Advice
Get in touchAt Fast Insolvency, we provide clear, compliant guidance on forming a phoenix company in , a new business that rises from the closure of an insolvent company.
This route allows directors to start fresh, retain viable parts of the old business, and protect jobs, but strict rules apply under UK insolvency law.
We protect directors from liability while helping you start fresh with a viable new business.
Contact us today for free advice on phoenix company formation and to avoid the legal risks of getting it wrong.
What Is a Phoenix Company?
A phoenix company is a new business that is formed after an insolvent company has been liquidated.
It often has the same directors, staff, and assets, but operates as a legally separate entity with a different name or structure.
Is It Legal to Start a Phoenix Company?
Yes, forming a phoenix company is legal in the UK, as long as it follows the rules under the Insolvency Act 1986.
The process must be transparent, and directors must not trade while insolvent or breach restrictions on using the old company name.
What Are the Legal Restrictions?
Under Section 216 of the Insolvency Act 1986 in , directors of an insolvent company are prohibited from reusing the same or similar name for 5 years, unless they follow strict exemption procedures.
Breaching this rule can result in personal liability for the new company’s debts and even criminal penalties.
How Can I Reuse the Company Name Legally?
You can apply for a Section 216 exemption in if:
You buy the old company’s assets from a licensed insolvency practitioner
You notify all creditors and file the correct forms with the court and Companies House within 28 days
We can handle this entire process for you to ensure compliance.
Can I Keep My Staff and Clients?
A phoenix company can often retain key contracts, client relationships, and employees from the old business.
Transferring staff must follow TUPE regulations to protect employment rights.
Will Creditors Be Notified?
All creditors of the liquidated company must be notified if the new company is using a similar name or operating in a similar way.
This ensures transparency and protects creditors from deception.
Can I Buy the Assets from the Old Company?
The assets including stock, equipment, or intellectual property, can be sold to the new company at fair market value by the liquidator.
You cannot transfer assets privately or below market value.
What Are the Risks of Forming a Phoenix Company?
If the rules are not followed correctly, you could be held personally liable for new company debts or be disqualified as a director in .
There may also be reputational damage if the new company appears to evade the old one’s obligations.
What Is the Process for Creating a Phoenix Company?
The typical process includes:
Entering a formal liquidation (CVL)
Valuing and selling the old company’s assets
Setting up a new company
Transferring staff and operations
Filing all legal notices and exemption forms under Section 216
We manage this process end-to-end to ensure full compliance.
Does HMRC Allow Phoenix Companies?
HMRC permits the formation of phoenix companies, but they monitor closely for misuse.
You must remain fully compliant with tax obligations in the new business.
Can I Form a Phoenix Company After Compulsory Liquidation?
If your company was forcibly wound up through compulsory liquidation, you must still follow the same name reuse restrictions and apply for court permission.
In some cases, HMRC or other creditors may object.
What If I Want to Use a Completely New Name?
If the new company name is not the same or similar in , Section 216 restrictions do not apply.
However, you still need to ensure that no misleading links exist between the old and new businesses.
How Much Does It Cost to Set Up a Phoenix Company?
A CVL costs from £3,000–£5,000 in , plus legal fees for name reuse applications if needed.
The cost depends on whether you’re purchasing assets and the complexity of the liquidation.
We offer fixed-fee packages that include full phoenix company advice and compliance.
Get Expert Phoenix Company Advice Today
If you're closing an insolvent company and want to continue trading, legal guidance is essential.
We offer low-cost, legally compliant phoenix company services with expert oversight.
Contact Fast Insolvency now for free, confidential advice on forming a phoenix company safely and lawfully.