fraudulent trading

fraudulent trading
Under Section 213 of the Insolvency Act 1986, a director found guilty of trading with intent to defraud creditors of the company may be made personally liable for company debts.

Easyform Glossary of Law Terms. — UK law terms.


fraudulent trading
the carrying on of business by a company for a fraudulent purpose or in defraud of creditors. If in the course of the winding up of a company it appears that a company as been so trading, the court, on the application of the liquidator, may declare that any persons who were knowingly party to such trading are to be liable to make such contributions to the company's assets as the court may think proper. See Companies Act 1985 and Insolvency Act 1986. See also R v. Cox & Hedges [1982] 75 Cr. App. Rep. 291.

Collins dictionary of law. . 2001.


fraudulent trading
Where, during the course of the winding up of a company, any business of the company has been carried on with the intent to defraud creditors of the company. Fraudulent trading is a criminal offence. A liquidator can apply to the court to obtain a contribution from those who were knowingly parties to the carrying on of the business in such a manner (section 213, Insolvency Act 1986).
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Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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