Several rules for fraudulent trading, Business Law and Ethics

Assignment Help:

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.

Held:

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.


Related Discussions:- Several rules for fraudulent trading

Find out the tort, 1. Chuck walked into a room. As a joke, Matt stuck his l...

1. Chuck walked into a room. As a joke, Matt stuck his leg out so that Chuck would trip Chuck tripped and in so doing, dropped the bottle of soda he was carrying. In the

Publication, PUBLICATION: Whether in section 46(3) of the constitution...

PUBLICATION: Whether in section 46(3) of the constitution states that like, upon a Bill that has been passed through the National Assembly being presented to the President for

Oppression of minorities, OPPRESSION OF  MINORITIES:                  ...

OPPRESSION OF  MINORITIES:                    7.3.1 Section 211 of the Act provides that any member of a company who complains that the affairs of the company are being conduc

What are the functions of the commission for conciliation, Question 1: ...

Question 1: (a) Explain what you understand by the following legal terms under the Employment Relations Act - (i) Collective bargaining (ii) Collective agreement (iii

Describe urys stages-strategy, Question 1: i) What are the main charac...

Question 1: i) What are the main characteristics of good faith bargaining? ii) What are the main criteria used in the US labour relations system to test good faith bargain

Misfeasance by the auditors, Misfeasance by the auditors: However it i...

Misfeasance by the auditors: However it is not sufficient to describe that the frauds must have been detected whether the entries in the books had been put mutually in a way w

Articles of partnership - partnership law, Articles of Partnership - Partne...

Articles of Partnership - Partnership Law However a partnership need not be formed through written agreement, it is accustomed for 'Articles of Partnership' for be drawn up, s

planned parenthood v. casey opinion, Common law systems such as that in th...

Common law systems such as that in the United States rely on prior decisions as a principal source for determining cases as they arise. a) What are the five ways that precedents

Torts law problem, Bazil decided to celebrate a promotion he had received a...

Bazil decided to celebrate a promotion he had received at work that week by having a few alcoholic drinks on the weekend. After a few hours spent in the local pub, Bazil decided he

Explain the elements of governmental authority, Explain the elements of gov...

Explain the elements of governmental authority The theme of these draft laws is mentioned in Article 1, which says that every internationally wrongful act of a State entails th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd