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Regarding Fraudulent trading What is the main Difference between the Defination of both under Insolvency act 1986 and Companies act 2006?
What I found the main 2 differences:
1)The first one is under companies act its a criminal offence and under insolvency act it is civil offence
2)The other one is that in companies act the business is intended to carry on for purpose of defrauding creditors and in Insolvency act it is same as companies act but only Difference is that fraudulent trading or business is carried under financial difficulties
are these differences enough or I am missing out any major point?
From what date was this question? Wrongful trading was introduced because it was too difficult to prove fraudulent trading. I can’t believe that you’ll get a similar question in F4 these days. It’s difficult enough without asking esoteric questions about the differences which arise from two differing pieces of legislation.
Well I generally ask this question as this topic was found in BPP study text book in chapter (Fraudulent trading) {Last Chapter}…… But I can tell you the question regarding this topic it was:
in BPP Q120 Fran,Gram and Hen
In Past Papers December 2009
Fran, Gram and Ham did not ask for the differences between Insolvency Act and Companies Act. Please tell me I’m not wrong
This is the Requirement of the question:
Required:
Advise Fran, Gram and Hen as to any potential liability they might face as regards:
(a) fraudulent trading, under both criminal and civil law;
(b) wrongful trading under s.214 of the Insolvency Act 1986.I answered this question correctly but a little bit confusion is in fraudulent trading only because under fraudulent trading my answer was not accurate and misses the point of companies act
The answer in both BPP and examiner answer is same
These are both the links of december 2009 question paper and answers:
https://www.accaglobal.com/content/dam/acca/global/pdf/f4eng_2009_dec_q.pdf
https://www.accaglobal.com/content/dam/acca/global/pdf/f4eng_2009_dec_ans.pdf
Wow – I live and learn! I would never have drawn the distinction of the inadequacies of the Companies Act which themselves led to the necessity of the Insolvency Act.
thank you… can u find me the difference between fraudulent and wrongful trading ??
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