Fradulent trading meaning

Fraudulent trading describes carrying on a company’s business with an intention to cheat or deceive creditors, or for any other fraudulent purpose. It is a statutory concept: in England and Wales and Scotland, Insolvency Act 1986, s 213 permits the court, on a liquidator’s application during winding up, to order any person who was knowingly party to such conduct to contribute to the company’s assets. It is also a criminal offence under Companies Act 2006, s 993. In Northern Ireland, the equivalent civil remedy is in the Insolvency (Northern Ireland) Order 1989, art 75; the criminal offence is likewise under Companies Act 2006, s 993. In Ireland, comparable relief is available under Companies Act 2014, s 610 (fraudulent or reckless trading), with a separate criminal offence in s 722. Key features include: proof of actual intent to defraud; liability of any person knowingly party (not only directors); typical pursuit by the liquidator or official receiver; potential personal contribution orders, criminal penalties and director disqualification. It is distinct from wrongful trading (which does not require fraudulent intent). Usage and effect are broadly consistent across the UK, with closely aligned Irish provisions.