wrongful trading

Trading during a period in which a company had no reasonable prospect of avoiding insolvent liquidation. The liquidator of a company may petition the court for an order instructing a director of a company that has gone into insolvent liquidation to make a contribution to the company's assets. The court may order any contribution to be made that it thinks proper if the director knew, or ought to have known, of the company's situation. A director would be judged liable if a reasonably diligent person carrying out the same function in the company would have realized the situation: no intention to defraud need be shown.

Accounting dictionary. 2014.

Look at other dictionaries:

  • Wrongful trading — is a principle of UK insolvency law. It was introduced to enable contributions to be obtained for the benefit of creditors from those responsible for mismanagement of the insolvent company. The Insolvency Act 1986The principle of wrongful trading …   Wikipedia

  • 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 …   Law dictionary

  • wrongful trading — Trading during a period in which a company had no reasonable prospect of avoiding insolvent liquidation The liquidator of a company may petition the court for an order instructing a director of a company that has gone into insolvent liquidation… …   Big dictionary of business and management

  • wrongful trading — (U.K.) Fin the continuation of trading when a company’s directors know that it cannot avoid insolvent liquidation …   The ultimate business dictionary

  • Trading while insolvent — is unlawful in a number of legal systems, and may result in the directors becoming personally liable for a company s assets. Under UK insolvency law trading once a company is legally insolvent can trigger several provisions of the Insolvency Act… …   Wikipedia

  • Trading while insolvent (UK) — In many legal systems, once a company becomes insolvent, the directors have to take particular care. Under UK law, trading while insolvent can trigger several provisions under the Insolvency Act 1986 which may have the effect of making directors… …   Wikipedia

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  • fraudulent trading — Carrying on business with intent to defraud creditors or for any other fraudulent purpose. This includes accepting money from customers when the company is unable to pay its debts and cannot meet its obligations under the contract. Such conduct… …   Big dictionary of business and management

  • Corporate veil in the United Kingdom — The corporate veil in the United Kingdom is a metaphorical reference used in UK company law for the concept that the rights and duties of a corporation are, as a general principle, the responsibility of that company alone. Just as a natural… …   Wikipedia

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