Fraudulent Trading
Glossary
Fraudulent Trading
Fraudulent trading is the UK offence of carrying on the business of a company with intent to defraud creditors or for any other fraudulent purpose — both a civil claim (under section 213 Insolvency Act 1986) and a criminal offence (under section 993 Companies Act 2006).
The civil claim, brought by a liquidator, can require directors to personally contribute to assets. The criminal offence carries up to 10 years imprisonment plus an unlimited fine. The key difference from wrongful trading is intent — fraudulent trading requires dishonest intent, wrongful trading just requires that the director ought to have known. Many wrongful-trading claims get reframed as fraudulent-trading when there's evidence of deliberate creditor-deception.
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