A phoenix company describes a new company that has risen again from a previously failed company. Quite often the old company will have gone into liquidation and the directors will buy back the assets and start trading again in the same business. It may upset creditors of the old business but it is legal if done properly. It is an effective tool to help a company that perhaps had a one off hit and needs to start again.
Nothing upsets creditors quite like a phoenix company as they think it is unfair that a business seems to have shed its liabilities and can carry on without them. In more cases a phoenix is legal provided it meets certain criteria, such as:
Some suppliers will not deal with a phoenix company and may impose stricter trading terms. HM Revenue & Customs (HMRC) may well request a bond or deposit against future PAYE or VAT liabilities.
If you want to start again the best thing you can do is take early professional advice from a Licensed Insolvency Practitioner. Call us on 0800 331 7471 we are here to help and remember the earlier you take advice the more options are likely to be available.