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

State about the stages in the policy process, State about the Stages in the...

State about the Stages in the policy process Stages in the policy process are generally conceptualized within a broader environment governed by constitutional rules, political

an express term and an implied term, What is the difference between an exp...

What is the difference between an express term and an implied term? Provide me with an example of each.

State article 22 of international law, State Article 22 of international la...

State Article 22 of international law Article 22 declares the premises of the mission as inviolable and agents of receiving State are not to enter them without the consent of

Labour laws , Labour Laws: The small units manufacturing items reserved fo...

Labour Laws: The small units manufacturing items reserved for manufacture in small scale sector do not require any prior license. This is a major relaxation where no licensing or

Proceedings for compulsory liquidation, Proceedings for Compulsory Liquidat...

Proceedings for Compulsory Liquidation: When the petition is presented to the court a copy is delivered to the company in case it objects, and it is advertised so that other

Determine the name and elements of the tort, Sue owns a car that has 150,00...

Sue owns a car that has 150,000 miles on it, but otherwise looks to be in very good condition. She advertises to sell the car and Ken asks her how many miles are on the c

Article 1 - state responsibility, Article 1 - State Responsibility The ...

Article 1 - State Responsibility The laws on state responsibility are derived from state practices and various other customs and practices. However the main text on the law of

Principle of floating charges, Principle of floating charges: The gene...

Principle of floating charges: The general purpose of the rule is to prevent an unsecured creditor of an insolvent company from getting advantage over other creditors by obtai

Who can apply for registration with sehda, QUESTION a) How is the term ...

QUESTION a) How is the term "investor" defined in the Investment Promotion Act? b) In what ways can the Board of Investment (BOI) assist in business facilitation and Public-Pr

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

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