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wrongful trading

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wrongful trading

Company carrying on business at a time when it is unable to avoid insolvent liquidation. In the event of liquidation, creditors can apply to a court to have a director of the company held personally responsible for the debts of that company. If it can be shown that the director was aware that the company would become insolvent, yet continued trading, then the court may order the director to make a contribution to the company's assets.
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If directors have any concerns regarding the viability of the company and fear they are nearing insolvency then they must be aware of the repercussions of trading whilst insolvent, otherwise they will be guilty of wrongful trading.
Know your duties and prepare to fulfil them; Susan Mairs from Clarke ... by The Journal (Newcastle, England)
He said: "A ban of between two and 15 years can be imposed on a director for failing to meet his statutory duties and possibly being guilty of wrongful trading.
Directors may escape bans; SERVICE: Cuts could spare insolvent bosses ... by Birmingham Mail (England)
It should be stressed that liability for wrongful trading cannot arise until there is no reasonable prospect that the company can avoid going into insolvent liquidation.
Know Your Law by Evening Gazette (Middlesbrough, England)
 
 
 
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