Best way to redirect website without losing ranking?

Hello,

I have a web design business. I am rebranding my business name as I am no longer just doing web design and want to branch out and do different stuff.

I also have another website that was hit by a penalty Penguin 2.0.

I have seen people talk about redirecting to another domain name and start pointing quality backlinks to the new domain, but will the same website with a new domain be still penalized?

How does this work. Any information would help.

Thank You

A 301 redirects all backlinks. The penalty would transfer understandably along to the new domain after time. It doesn't just transfer PA from the previous domain, otherwise we'd be buying up any sort of domain with good and bad backlinks from expired but still indexed, despite having a penalty or not.

It transfers the good and the bad.