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10th Jan 2010
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David Winch
By David Winch
12th Jan 2010 20:53

Fraudulent trading

Then again there is the criminal offence of "fraudulent trading" contrary to s993 Companies Act 2006.  This occurs where a person (probably, but not necessarily, a director) is "knowingly party" to the business of a company being carried on "with intent to defraud creditors" or "for any fraudulent purpose".

Fraudulent trading necessarily involves dishonesty.

The maximum penalty for fraudulent trading is 10 years imprisonment.


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By CM Business Recovery
19th Jan 2012 13:44

As with most things, the law

Always seek insolvency advice from a reputable IP in your country/state.

As with most things, the law varies in different countries. Some have "ring-fenced" payments made for fraudulent trading so that they are made available to the pool of assets for unsecured creditors.

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By ksagroup
01st Feb 2013 14:01

Wrongful or insolvent trading

An example of wrongful trading would be where a company took lots of deposits from customers knowing full well that they would ve very unlikely to be able to honour the contracts but used the money to pay off creditors.  Whilst not necessarily fraudulent it is wrong.

For more definitions look at our page on wrongful trading  and trading whilst insolvent

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By David Billy
19th Jul 2016 13:53

It’s true that the wrongful trading is an unlawful act while if you are trading after getting insolvent, it will be a part of the wrongful trading but not an unlawful act, yet it varies according to the circumstances. The Fraudulent Trading Lawyers in London can best guide in this respect.

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By ImranAli
13th Mar 2020 09:23

If you have been accused of financial crime Ashmans Solicitors can help

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