wrongful trading

wrongful trading
Under section 214 of the Insolvency Act 1986, where a director allows a company to continue trading when he should have concluded that there was no reasonable prospect that the company could avoid going into insolvent liquidation the director may be liable to make a personal contribution to the company's debts.

Easyform Glossary of Law Terms. — UK law terms.


wrongful trading

Collins dictionary of law. . 2001.


wrongful trading
A statutory offence in section 214 of the Insolvency Act 1986. Once a director or directors conclude (or should have concluded) that there is no reasonable prospect of the company avoiding an insolvent liquidation, directors have a duty to take every step which a reasonably diligent person would take to minimise potential loss to the company's creditors. If, after the company has gone into insolvent liquidation, it appears to the court that a director has failed to comply with this duty, the court can order the director to make such contribution to the company's assets as it thinks proper.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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