Several rules for fraudulent trading, Business Law and Ethics

Several rules for Fraudulent trading:

Various rules have been established to determine what is fraudulent trading:

(a) Only persons who take the decision to carry on the company's business in this way or play some active part are liable.  An employee who is aware that the debts incurred may not be paid and who merely fails to inform the directors of the situation is not a "party" to carrying on business since it is not a decision or action on his part.

                                                  Case: RE MAIDSTONE BUILDING PROVISIONS (1971)

The secretary of the company also acted as financial adviser to the directors.  The secretary was aware but did not tell the directors that in carrying on its business the company was incurring debts which it was not likely to pay.  Proceedings were brought against the secretary for fraudulent trading.


As the secretary did not take the decision to continue trading he was not a "party" to fraudulent trading.  In so far as he had failed to provide information and advice which it was his duty to give he might have been negligent but that was not an issue in these proceedings.

(b) "Carrying on business" can include a single transaction and also the mere payment of debts as distinct from making trading contracts.

Posted Date: 1/15/2013 5:45:11 AM | Location : United States

Related Discussions:- Several rules for fraudulent trading, Assignment Help, Ask Question on Several rules for fraudulent trading, Get Answer, Expert's Help, Several rules for fraudulent trading Discussions

Write discussion on Several rules for fraudulent trading
Your posts are moderated
Related Questions
State the term - monetary policy coordination Criticisms have been put forward on proposals for enhanced fiscal and monetary policy coordination. This policy coordination might

Exceptions: The rule in Turquand's case will not apply if: i.The person suing the company is in fact an insider, such as a director of the company: Howard v Patent Ivory

Q. Liability based definition of phoenix activity? The definition used by Treasury, and used as a working definition for this project, focuses on the intent with which phoenix

Contingent and prospective liabilities of the company: A creditor who petitions on grounds of the company's insolvency may rely on any of the following situations to show (as

Explain UNCTOC UNCTOC identified the concept of an organized crime. A crime is termed as an "Organized Crime" when people in different countries and/or of different national

Differences between Liquidators and receivers: There are also significant differences: (a)a liquidator has numerous statutory powers. A receiver must rely on the powers given

Powers of Arbitral Tribunal Powers of Arbitral Tribunal are as Follow: For determine whether it has jurisdiction to entertain a dispute and For provide interim reme

Question: (a) Ethics is the set of moral principles by which people conduct themselves personally, socially, or professionally. Critically analyze the basic ethical values

#questiwhat are lawson..

Delays: However certain standard defences knows as "essoins" caused considerable delay earlier than a case could be heard.  Now for a certain condition like the hearing of a c