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Which two of the following are criminal offences tht directors of a company may commit as a consequence of their company being insolvent
1.acting as a director whilst disqualified
2.making a false declaration of solvency
3.wrongful trading
4.abuse of position
The bpp answer says 2&3.
But how is wrongful trading a criminal offence.That’s a tricky one indeed!
You’re correct, of course. Whereas fraudulent trading is criminal, wrongful trading per se isn’t. However, continuing to trade whilst knowing that there was no reasonable prospect that the company would be able to pay its debts in full (it’s insolvent, per the question) is probably criminal (fraudulent) …… but is wrongful trading whilst knowing that it’s insolvent criminal?
I think that is probably the way the Kaplan mind was working. But I could be wrong! Why not direct your question to Kaplan and see if they can explain their thinking?
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