Insolvency Service

Home / Technical Library / England & Wales / Guidance / Insolvency Service
The Insolvency Service - Forward Thinking Conference 2022 (18 November 2022)


Enabling greater use of section 216 of the Insolvency Act 1986 (‘IA86’),

‘Restriction on re-use of company names’

Key points

  • Sections 216 and 217  IA86 are aimed at preventing phoenix companies from causing damage by controlling the re-use of company names, and making the rogue director personally liable where the director of a company that goes into insolvent liquidation (company A) is involved in the management of a second company with a similar name (company B).


  • Despite the repercussions for breaching the section being relatively severe for a director, de facto or shadow director, the legislation is not effective in practice as many creditors are unaware of this entitlement and few have sufficiently significant debts to make a claim economically viable on their own.


  • To enable the legislation to be widely used in practice and function effectively as a powerful tool, we would propose some relatively minor changes to sections 216 and 217 IA86 and the introduction of a new section 217A. The proposed changes would extend the ambit of the provisions to insolvent dissolved companies and are likely to enable creditors the ability to benefit from claims under these sections more effectively. 


The proposed changes to ss 216 and 217 IA 1986 and the introduction of a new s 217A was the innovation of Stewart Perry but he was fortunate to have the assistance and constructive criticism of others when drafting. In this regard the authors would especially like to thank Stephen Hill, Jim James, Mark Lawford, Rachel Grant and Graham McPhie; who were or are at the time of drafting members of R3’s General Technical Committee. Proposed insertions are shown in underline text and proposed deletions in strikethrough text.





Enabling greater use of section 216 of the Insolvency Act 1986 - Size: 199Kb Download
Ben LuxfordBen Luxford
Head of Technical
020 7566 4218
Moira FitzpatrickMoira Fitzpatrick
Technical Manager
020 7566 4210

R3 members can provide advice on a range of business and personal finance issues. To find an R3 member who can help you, click below.