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Legal Terms - Fraudulent Trading
Fraudulent business practices include taking advance payment for items without fulfilling them or repaying the payment. This action is a criminal offense (Companies Act 2006 § 993) and can result in civil liability under section 213 of the Insolvency Act 1986. The court may force people responsible to contribute to the company's assets during a winding-up. Cases: Re Patrick & Lyon Ltd [1933] Ch 786 and Re Maidstone Building Provisions Ltd [1971] 1 WLR 1085.
Fraudulent business practices include taking advance payment for items without fulfilling them or repaying the payment. This action is a criminal offense (Companies Act 2006 § 993) and can result in civil liability under section 213 of the Insolvency Act 1986. The court may force people responsible to contribute to the company's assets during a winding-up. Cases: Re Patrick & Lyon Ltd [1933] Ch 786 and Re Maidstone Building Provisions Ltd [1971] 1 WLR 1085.
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