fraudulent trading

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Carrying on business with intent to defraud creditors or for any other fraudulent purpose. This includes accepting money from customers when the company is clearly unable to pay its debts and cannot meet its obligations under the contract. Such conduct is a criminal offence. The liquidator of a company may apply to the court for an order against any person who has been a party to fraudulent trading to make such contributions to the assets of the company as the court thinks fit. ‘Fraudulent’ in this context implies actual dishonesty or real moral blame. Compare wrongful trading.

Subjects: Financial Institutions and Services.

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