Areas of Law / Bankruptcy Debt

One month before going into liquidation a director of a limited company formed another limited company and is now working there. Is that legal?

A company director can normally start up another business, but should no’t use the same or a similar name to the business in liquidation other than in special circumstances. This ban is imposed for five years after a company goes into compulsory or creditors’ voluntary liquidation. If a company director is declared “unfit” by the liquidator (because he or she failed to meet their legal responsibilities) they can be disqualified from being a director of a company for between two and 15 years, or prosecuted. You’’re automatically disqualified from being a company director if you’’re declared bankrupt, given a debt relief order or are subject to bankruptcy restrictions.

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