Defending Fraudulent Trading Claims
The uglier sister of wrongful trading, an allegation of fraudulent trading is even more serious. It’s a crime as well as a civil offence.
What is Fraudulent Trading?
Fraudulent trading is continuing to trade when a company is insolvent and intending to defraud company creditors. It’s deliberate and involves deception.
If your company goes into liquidation or administration and the company liquidator/administrator suspects you of fraudulent trading, they could bring a civil claim against you under section 213 of the Insolvency Act 1986.
More seriously, you could also be prosecuted in the criminal courts.
Who can be prosecuted for Fraudulent Trading?
Another way that fraudulent trading differs from wrongful trading: company directors are not the only people who can be investigated. Anyone who was involved in the fraud can be held liable. That includes shareholders and third parties.
What are the potential consequences of Fraudulent Trading?
As with wrongful trading, you can be made personally liable for a portion of company debts, fined and disqualified as a director.
Worse, if you are convicted of fraudulent trading, you can be sent to prison. In the most serious cases, that could be for up to 10 years.
That’s why if you’re concerned about your company’s finances, it’s vital to take expert advice on what you can and can’t do – and what you should be doing – as soon as possible.
Contact us today for a confidential discussion
Being accused of something as serious as fraud can be frightening. It can make you feel anxious and confused about the future.
At Altion Law, our experienced solicitors work with company directors every day. And our senior barristers are experts in defending the most serious charges of financial crime.
Contact us today to discuss your situation.