Can You Change A Company Name During Administration?December 6, 2023
There are lots of reasons to change the company name but people often ask us if you can do it during administration.
The purpose of administration is to try rescuing the company. It’s an insolvency procedure for securing control when creditors are set to take action against the company.
With a total of 2,315 in October 2023, the number of insolvencies was 18% higher than for the same month in 2022, according to The Insolvency Service. The total number of administrations is also up year-on-year.
This is what happens when a company goes into administration. But of course, entering administration is not the only reason why a company may want to choose a new name.
Reasons for changing the company name
It’s very common for a company to change its name. Often a name change signals the evolution of a brand’s personality or core values.
In terms of marketing, sometimes a company name doesn’t stand out enough or is hard to find on search engines. On occasion, the name is too similar to that of other companies and causes confusion among customers or prospects.
But those in charge of a company may also want to change the name after the business has gone through a tough time, such as a lengthy period of insolvency and administration.
Intended to provide a fresh start for a struggling business, it stands to reason that directors may also want to signal new beginnings with a different name for the company.
During administration, creditors cannot take any legal action against the company unless a court approves. This protection from creditors gives the company time to make plans to pay back the debts.
And if there is a winding up petition, the company can go into administration to protect itself from going through a compulsory liquidation.
Bear in mind that if the administrators assess there is no way to save the business, they may need to distribute company property to creditors.
Given the legal requirements of administration, directors often ask if it’s possible to change the company name during this time.
Can you change a company name in administration?
Yes, you can change the company name during administration.
You would need to approach the licensed insolvency practitioner for their approval first but if it is appropriate, administration itself does not prevent a company name change.
During administration, the insolvency practitioner has a significant amount of control over all company decisions, so they should review the decision for changing names.
Ultimately, other approvals are required too – you will need to register the name change with the government via Companies House.
How to change company name with Companies House
Broadly speaking, here is the process for changing a company name during administration:
- Consult the insolvency practitioner about the name change
- Choose a new name – here is an availability checker from Companies House
- Hold a written or special resolution (see below) involving a vote by members, with 75% of shareholders by value agreeing to the change before passing
- Send the signed resolution to Companies House with form NM01, the fee (£8 for online submissions, £10 for paper) and revised articles of association
- Receive a certificate of incorporation from Companies House
For a change of name by special resolution, directors call and hold a board meeting. They can propose a special resolution at a general meeting or as a written resolution for private limited companies.
For a general meeting, directors need to send a notice to the company’s members – it must comply with Companies Act 2006 requirements in terms of content and notice period. The general meeting then takes place on the relevant date, with shareholders voting on the resolution.
In terms of a written procedure, directors must circulate a copy proposing the special resolution to company members.
Summary: Changing a company name during administration
During administration, it is possible for a company to change its name as long as the insolvency practitioner agrees that directors can pursue this.
Administration is a rescue attempt and therefore, a chance for the company to start a new chapter, which a new name can help symbolise.