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

Objects of the law society, Objects of the Law Society Whereas under s...

Objects of the Law Society Whereas under sec 4 of the Act society object as established are as: For maintain and improve the standards of learning and conduct of

Judges of appeal, Judges of Appeal, Attorney and Registrar Judges of...

Judges of Appeal, Attorney and Registrar Judges of Appeal However a "judge of appeal" is a judge that who is appointed to the Court of Appeal. Attorney - General

Dividends - alteration of capital, DIVIDENDS: As a commercial term, th...

DIVIDENDS: As a commercial term, the word "dividends" has a variable meaning which depends on the context in which it is used. For purposes of company law, it denotes the paym

Regulations regarding alcohol purchase and storage, REGULATIONS REGARDING A...

REGULATIONS REGARDING ALCOHOL PURCHASE AND STORAGE As YOU know, ethyl alcohol is one of the laboratory chemicals which can be misused. To control its purchase, storage and use,

How an offer differ from an invitation to treat, Question 1: Write brie...

Question 1: Write brief notes on the following contractual terms:- (a) How an offer differ from an invitation to treat. (b) The principles governing goods wh

Define the term - agenda amendments, Define the term - agenda amendments ...

Define the term - agenda amendments The solution to the above lies in the rules of policy or agenda amendments and the real weapon in the hands of the voter is their ability t

Employment relations act, QUESTION 1 Evaluate the circumstances under w...

QUESTION 1 Evaluate the circumstances under which an employer would be justified in terminating his worker's contract of employment under the Employment Rights Act QUESTION

What is the territorial sovereignty, What is the territorial sovereignty ...

What is the territorial sovereignty The territorial sovereignty includes the land territory, the territorial sea, the seabed and the subsoil of the territorial sea. It also inc

Service of notice - meetings and resolutions, Service of Notice: Secti...

Service of Notice: Section 134 (a) provides that, unless the articles of the company make other provision in that behalf, notice of the meeting of a company shall be served on

Sale of goods, Sale of Goods However in US Law relating to the sale an...

Sale of Goods However in US Law relating to the sale and purchase of goods is such contained in the Sale of Goods Act like cap 31. Therefore the Act is a reproduction of Goods

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