2 min read
Definition
A phoenix company is a new company that continues the business of an insolvent predecessor, typically by buying its assets from the liquidation or administration. It is lawful when done transparently and at fair value.
In plain terms
The viable trade survives in a new vehicle while the old company’s debts are dealt with in insolvency. Abuse — to dump debts unfairly — is restricted by law, including rules on reusing company names.
Why it matters for your company
Legitimate phoenixing must be handled by an insolvency practitioner with proper valuations to avoid director liability. Cutting corners risks disqualification. See pre-pack administration.
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