Fraudulent trading refers to the act of carrying on a business with the intent to defraud creditors or for any other fraudulent purpose. This includes accepting money from customers when the company is unable to pay its debts and meet its obligations under the contract. Such conduct is a criminal offence.
Wrongful trading refers to the act of continuing to trade when a company has no reasonable prospect of avoiding insolvency. Directors can be held personally liable if they knew, or should have known, about the company's financial predicament.
