Criminal offences by directors on insolvency

Oh my! How you brighten up my life 🙂

Option A – naughty. But naughty at any time and not necessarily as a consequence of their company being insolvent

Option B – I think that we are agreed on this – making a false declaration of solvency is clearly a criminal offence and such a declaration is only required when a company is facing an insolvent position.

Option C – Let me come back to this one

Option D – Again, naughty. But not naughty only when connected with insolvency. The tie into insolvency is not a consequence of ‘action and reaction’.

So I’m eliminating options A and D as being not directly tied to insolvency.

Now then! Option C. Clearly tied inexorably to insolvency. But is it criminal? Section 214 of the Insolvency Act 1986 clearly sets out that wrongful trading is a civil wrong. Fraudulent Trading is a criminal offence but that’s not tied to insolvency.

I’ve checked the Insolvency Act and there doesn’t appear to be any relevant update / amendment. I visited a site for ‘company rescue’ (www.companyrescure.co.uk) and they reiterate the mantra that wrongful trading is a civil offence. But then they confuse me with this (I quote) “In some cases, they (directors) can also be disqualified from being a director, fined or even imprisoned.”

Getting back to the question … option B is clearly half of the answer and options A and D are clearly not.. That leaves option C as the other half … even though it’s civil and not criminal 🙁

Poor question? Where is this one from?

OK?

As always, you’re very welcome