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 buy back the assets and start trading again in the same business under a different name.
It can upset creditors of the old business but it is legal if done properly. It can be an effective tool to help a company that has had a one off hit and needs to start again.
Nothing upsets creditors quite a like a phoenix as they think it is unfair that a business seems to have shed its liabilities and can carry on without them. However, in most 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 & Customers may well require a bond or deposit against future PAYE or VAT liabilities.
If you want to start again the best thing you can do is to seek professional advice early from a licenced insolvency practitioner. Contacting us early is likely to give you more options - we can help, speak to one of our experts today on 0800 331 7417