Dissolved companies no longer exist, which means their names can be registered by new or existing companies. When choosing such a name, there are no legal restrictions besides the Companies Act 2006 rules, but it is important to consider the reputation of the dissolved company.
Legal Considerations and Restrictions
You can’t operate a business without a legitimate business name. Business names are protected by trademark law, and another business’s name cannot be used without the owner’s permission. A dissolved company’s name becomes available to register, but there may be conditions to consider, particularly concerning the company’s reputation.
When a company dissolves, it goes through liquidation, which means removal from the register and an end to its legal existence. The new business entity using the name will be entirely separate from the dissolved company, with no past transactions transferring over.
Before deciding on using a dissolved company’s name, research is essential, as there may be drawbacks associated with the reputation of the previous entity. If the name belongs to a dissolved company, ensure that it was not forcibly dissolved due to insolvency or unlawful activities.
Procedure and Precautions for Registration
An inactive company can resume operations until dissolution documents are filed. This implies one should verify the company’s status properly. The state is responsible for verifying the availability of business names. If a business is dissolving, it will file a notice of its intent to cease operations, and you should consult with a trademark attorney as part of your due diligence.
If you find a suitable name attached to a dissolved corporation, you can form your new company with this name, bearing in mind that your entity will be assigned a different company number and will be separate from the dissolved company.
Be sure to consult a qualified business advisor if you have doubts, as they can guide you to the right solution. Additionally, consider any potential confusion in the market or major disadvantages like customers mistaking your new business for the old one.
If the name has been used by the company for 12 months before liquidation, there may be an option to continue using it. However, there are serious ramifications if reusing a name outside of these scenarios.
When searching for names, if a company is listed as dissolved, the name is generally available. However, if a company is merely inactive, written consent might be required for use. An officer of a dissolved corporation might become personally liable for rent under a lease during dissolution.
Ultimately, if you locate a responsible party, you can negotiate to transfer the unused name. Once obtained, submit the necessary proof to the state registrar with your formation documents.