30:
629:
on the conduct of all directors. If the liquidator has come across any conduct which makes the director unfit to be involved in the management of a company in the future (which things would include trading while insolvent) the
Department for Business, Innovation and Skills will apply to the Court for
613:
In the UK, directors are exposed in respect of transaction at an undervalue, preferences, and extortionate credit transactions if the transaction occurred: a) while the company was insolvent; and b) within 2 years before the onset of liquidation if the transaction was with a connected person, and 6
29:
539:
to become personally liable for a company's debts if they have acted improperly. In most legal systems, the liability in respect of unlawful transactions only extends for a certain period of time prior to the company going into liquidation.
606:. It also means that the directors need to be extremely careful when considering whether to continue to trade, or not. Any director who knows that the company is insolvent and makes the decision to continue to
680:
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333:
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389:
691:
318:
189:
445:
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359:
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184:
779:
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81:
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594:—outweigh the company’s assets. This is a critical point in the lifespan of a company as it denotes when the
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235:
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112:
91:
610:, and in doing so increases the debts of the company can be made liable for the company debts.
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225:
774:
430:
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220:
204:
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137:
132:
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8:
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251:
168:
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572:
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487:
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455:
302:
230:
122:
71:
642:
Many other countries have similar laws, often referred to as 'insolvent trading' or
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Directors who continue to trade while insolvent may face disqualification under the
552:, trading once a company is legally insolvent can trigger several provisions of the
643:
560:
536:
297:
266:
163:
127:
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66:
655:
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when it can no longer pay its bills when due, or its liabilities—including
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256:
86:
625:, the liquidator must make a report to the Disqualification Unit of the
476:
51:
21:
603:
583:
194:
292:
153:
117:
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an order disqualifying the director or directors from acting as a
450:
621:. Under the provision of this act, when a company goes into
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months if the transaction was with an unconnected person.
535:
to be unlawful in certain circumstances, and provide for
531:
A number of legal systems make provision for companies
578:
Extortionate credit transactions – Section 244
761:
627:Department for Business, Innovation and Skills
598:' responsibilities move from the interests of
738:"Company Directors Disqualification Act 1986"
512:
619:Company Directors Disqualification Act 1986
519:
505:
762:
770:Insolvency law of the United Kingdom
690:. UK Statutes Crown. Archived from
13:
637:
28:
14:
791:
730:
709:
673:
634:for a certain period of time.
1:
666:
567:Transaction at an undervalue
7:
649:
10:
796:
780:United Kingdom company law
717:"Trading whilst insolvent"
582:A limited company becomes
543:
466:History of bankruptcy law
236:Voidable floating charge
533:trading while insolvent
483:Pre-packaged insolvency
436:Bankruptcy alternatives
324:Cross-border insolvency
262:Trading while insolvent
113:Insolvency practitioner
92:Provisional liquidation
588:contingent liabilities
226:Undervalue transaction
33:
681:"Insolvency Act 1986"
431:Anti-deprivation rule
329:Insolvency Regulation
221:Fraudulent conveyance
205:Scheme of arrangement
159:Preferential creditor
138:Trustee in bankruptcy
133:Referee in Bankruptcy
32:
602:to the interests of
592:redundancy payments
575: – Section 239
569: – Section 238
563: – Section 214
554:Insolvency Act 1986
185:Administration (UK)
742:legislation.gov.uk
461:Financial distress
334:UNCITRAL Model Law
252:Fraudulent trading
169:Unsecured creditor
34:
688:Insolvency.gov.uk
661:US insolvency law
550:UK insolvency law
529:
528:
488:Sovereign default
471:List of bankrupts
441:Creditors' rights
303:Security interest
231:Unfair preference
213:Avoidance regimes
123:Regulatory agency
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728:
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644:wrongful trading
632:company director
561:Wrongful trading
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298:Second lien loan
267:Wrongful trading
164:Secured creditor
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17:
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638:Other countries
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319:Chapter 15 (US)
283:Floating charge
190:Chapter 11 (US)
67:Conservatorship
12:
11:
5:
793:
783:
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772:
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697:on 9 July 2011
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664:
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656:UK company law
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410:United Kingdom
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57:Chapter 7 (US)
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47:Administration
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9:
6:
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3:
2:
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493:Subordination
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415:United States
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311:International
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200:Restructuring
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177:Restructuring
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775:Business law
746:. Retrieved
741:
732:
720:. Retrieved
711:
699:. Retrieved
692:the original
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675:
641:
616:
612:
600:shareholders
581:
547:
532:
530:
475:
400:South Africa
261:
97:Receivership
77:Examinership
15:
722:14 November
623:liquidation
573:Preferences
405:Switzerland
257:Misfeasance
87:Liquidation
72:Dissolution
764:Categories
667:References
477:Pari passu
342:By country
128:Liquidator
52:Bankruptcy
22:Insolvency
604:creditors
596:directors
584:insolvent
537:directors
380:Hong Kong
355:Australia
195:Cram down
146:Claimants
105:Officials
39:Processes
650:See also
590:such as
350:Anguilla
293:Mortgage
275:Security
244:Offences
154:Creditor
118:Tribunal
748:30 July
744:. Crown
701:29 July
456:Default
390:Ireland
548:Under
544:UK law
451:Debtor
395:Russia
370:Cayman
365:Canada
695:(PDF)
684:(PDF)
608:trade
423:Other
385:India
375:China
750:2014
724:2016
703:2014
288:Lien
360:BVI
82:IVA
62:CVA
766::
740:.
686:.
646:.
752:.
726:.
705:.
520:e
513:t
506:v
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