Background

It is a criminal offence to continue trading using the name of a company which has gone into insolvent liquidation (a prohibited name).

Judgment

The Court of Appeal has just ruled on a case relating to confiscation orders made against individuals who illegally trade under a prohibited name. In this case, the defendant was given community service, and ordered to pay a confiscation order of £100,000, plus costs. The individual appealed the confiscation order on various grounds.

The court concluded that:

  • a confiscation order can be made against an individual who is convicted for trading under a prohibited name / style; and
  • the court is entitled to hold that the total turnover (not just the net profit) for the entire period of trading under that name is recoverable.

Comment

Following this decision, anyone convicted of this offence could be ordered to pay a sum equal to the total turnover for the entire period of illegal trading. This would be in addition to any fine or prison sentence handed down as a punitive element.

R v Neuberg [2016] EWCA Crim 1927