If you breach this law, you are committing a criminal offence and will be liable for all the debts of the other company and may be disqualified from acting as a director for up to 15 years.
There are some exceptions to the general rule:
- If the company purchases the business including goodwill from the liquidator, and notice in a prescribed form is given within 28 days to the liquidated company's creditors
- If you apply to the court and the court gives you permission
- If the company with a similar name as the one going into liquidation, has had a similar name or trading style and has been trading for the full 12 months prior to the liquidation.
This is a complicated area of law and, as can be seen, the penalties for falling foul can be severe. It is therefore always best to take specialist advice if in any doubt.