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A phoenix company is where the assets of one Limited Company are moved to another legal entity.

Often some or all of the Directors remain the same and in some cases, the new company has the same or a similar name to the failed business. Typically, the phoenix company continues along the same lines as the previous company.

Are phoenix companies legal?

It is perfectly legal to form a new company from the remnants of a failed company. A director of a failed company can become a director of a new company unless he or she:

1. is subject to a disqualification order or undertaking, or

2. is personally adjudged bankrupt, or

3. is subject to a bankruptcy restrictions order or undertaking.

For more information on disqualified directors, see the Insolvency Service website.

Why set up a Phoenix Company?

Not all legitimate businesses succeed at the first attempt, according to the Small Business Service, up to one in three businesses close within three years.

Businesses can fail for any number of reasons and there are occasions when honest individuals find they can no longer trade out of their difficulties. In these cases, the phoenix company arrangement allows a business to start again and for the profitable elements of the failed business to survive, offering some continuity for both suppliers and employees.

Can a Phoenix Company be used alongside an Insolvency Process?

Yes; however, there are strict rules applying to companies and directors that are experiencing debt problems.

If you feel this may be an option, please call for specific advice before taking any action.

What to do next

Please call Anderson Brookes on 0800 1804 933 to discuss your options.

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Anderson Brookes Ltd

Anderson Brookes Ltd provides advice to individuals, business owners and company directors that are struggling with debt. Anderson Brookes Ltd is Authorised and Regulated by the Financial Conduct Authority; our registration number is 669796. You can confirm our details on the FCA website www.fca.org.uk. Anderson Brookes Ltd is a limited company registered in England and Wales; company registration number is 4213701. You can read more about the services provided by Anderson Brookes Ltd by visiting OUR SERVICES. A printed copy of our Initial Disclosure Document will be provided to you before any Instructions are accepted from you. You can request a copy at any time by calling 01204 255 051. Some of the services provided by Anderson Brookes Ltd are not regulated by the Financial Conduct Authority.

Anderson Brookes Insolvency Practitioners Ltd

Anderson Brookes Insolvency Practitioners Ltd is a limited company registered in England and Wales; company registration number is 10324159. Registered office address is 4th Floor, Churchgate House, Bolton, Lancashire BL1 1HL. Brendan P Hogan is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Licence Number 101680.