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209 Fraudulent trading

Fraudulent trading

If a company is in the course of winding up or there are winding-up proceedings against the company, and it appears that the company has been carried out business with intent to defraud the creditors, the liquidator or creditor or contributor of the company, may, apply to the Court to have the persons responsible for fraudulent trading. If the Court thinks it is proper to declare that any person who was knowingly a party to the carrying on of the business in that manner shall be personally responsible, without any limitation of liability for the payment of the whole or any part of that debt (Section 304 CA).

Every person who was known as a party for the carrying on of the business with that intent or purpose to defraud creditors shall be also guilty of an offence under the Act.

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