Can directors start another company after liquidation?

Yes, directors can generally start another company after liquidation, unless they are disqualified for misconduct. However, there are strict rules to prevent abuse. Under the Insolvency Act, directors cannot reuse the same or a similar trading name as the liquidated company without court approval or following specific legal procedures. This is known as ‘phoenixing’ and is intended to protect creditors from confusion or deception. Breaching these rules is a criminal offence and can result in fines, disqualification, or personal liability for company debts. That said, many directors do go on to successfully run new businesses after liquidation, provided they comply with the regulations. A pre-pack administration or open market purchase of assets can also allow directors to buy back parts of their old business legally. For directors, it is essential to seek legal advice before setting up a new company to avoid breaching insolvency rules.