ACCA · Question 19 · Insolvency law
Section A
During a liquidation, the liquidator discovers that the directors continued to trade and incur debts for six months after they knew, or ought to have concluded, that there was no reasonable prospect of avoiding insolvent liquidation.
What action can the liquidator take against the directors?
Answer options:
Bring a claim for fraudulent trading, which requires proof of intent to defraud creditors.
Bring a claim for wrongful trading to compel the directors to contribute personally to the company's assets.
Automatically disqualify the directors for a period of 15 years.
Nothing, as directors are protected by limited liability.
60 questions · hints · full answers · grading
Expert