Section 213 Of The Insolvency Act 1986 – Fraudulent Trading

Section 213 of the Insolvency Act 1986 is about trading with the intent to defraud creditors and the entitlement as a result to seek compensation for that conduct.

(1) If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect.

(2) The court, on the application of the liquidator may declare that any persons who were knowingly parties to the carrying on of the business in the manner above-mentioned are to be liable to make such contributions (if any) to the company’s assets as the court thinks proper.

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