ABSTRACT
Section 213 provides that if a company is in liquidation and the court finds that its business has been carried on with intent to defraud creditors or for fraudulent purposes, the court may make such order as it thinks fit in respect of any person who knowingly carried on the business to contribute to the company’s assets. Fraudulent trading is also a criminal offence under s 458 of the Companies Act 1985. The company will be guilty of fraudulent trading if, knowing that there is no reasonable prospect of new creditors being paid, it nevertheless carries on business and incurs debts.
