ACCA LW Eng Syllabus H. Corporate Fraudulent and Criminal Behaviour - Fraudulent and Wrongful trading - Notes 8 / 8
Fraudulent trading
Directors continue business, defrauding creditors
The directors must have acted dishonestly
The directors must have intended to make a gain for themselves
Remedies
If Criminal prosecution Max 10 years in prison and/or a fine
If Civil action (insolvent liquidation) 'make such contribution to the company's assets as the court thinks proper'
Wrongful Trading
When can't prove fraudulent trading
Directors continue business - knowing (or should have) no reasonable prospect of avoiding insolvent liquidation
Not taking reasonable steps to avoid losses for creditors
Remedy is civil - 'make such contribution to the company's assets as the court thinks proper'
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Syllabus H. Corporate Fraudulent and Criminal Behaviour
H1. Fraudulent and Criminal Behaviour
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