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Are There Drawbacks Of Using The Name Of A Dissolved Company?

Person sticking a closed sign in a window

When you’re starting the process of registering your company, you might have found the perfect name for your new venture. But what should you do if the perfect name also belongs to that of a dissolved company?

Dissolved companies have gone through the liquidation process, meaning they have been removed from the Companies House register. Going through this process means they have no legal existence.

Because dissolved companies don’t have a legal existence, you can reuse the name for your own company.

The dissolved company and the new company will be separate legal entities, with none of the previous transactions transferred from the dissolved company to the new one.

Even though the new company will not have any ties to the dissolved company, there are still some drawbacks you need to consider before deciding to use the name.

Reputation

Did you ever pick up a nickname in school that you’ve never been able to shake? Or did you pick up the reputation of being the class clown, and now your old friends are surprised you’ve landed a serious job?

Reputations such as these are just as prevalent within businesses.

When considering using the name of a dissolved company, you need to consider why the company was dissolved in the first place.

It could be that they provided a bad service which meant that no one wanted to work with them or buy their products.

You might find that it’s an uphill battle trying to shake this poor reputation and prove yourself as different from them.

However, there can be a flipside to this; if the company had a positive reputation, you can piggyback on this until you’ve found your feet.

Debt collectors

While debt collectors should carry out stringent checks to ensure you’re a different company from the dissolved one, if their processes aren’t as robust as they should be, they could still come after you.

While this is a remote possibility, it is still a possibility and will need to be considered before embarking on the journey to company ownership.

How can I avoid these problems?

There is one word which can help you prevent falling foul of these problems, research.

Before registering in the name of a dissolved company, you should carry out research in the following areas:

  1. The last set of accounts from the dissolved company that were submitted to Companies House
  2. Perform credit checks on the dissolved company to see if there are any outstanding County Court Judgements (CCJs) against them
  3. Perform a search on the internet to see if there is anything in the news regarding the company. This search could include news articles, press releases, and customer reviews

If you find anything in your research that could be concerning, then it may be best to look at choosing a different name for your company.

However, if all of your research is positive, then you should be able to proceed with the registration.

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