Q&As

While a director is awaiting trial for offences under section 993 of the Companies Act 2006 for fraud, can they be stopped from trading ?

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Published on LexisPSL on 27/01/2021

The following Corporate Crime Q&A provides comprehensive and up to date legal information covering:

  • While a director is awaiting trial for offences under section 993 of the Companies Act 2006 for fraud, can they be stopped from trading ?
  • Restraint orders

While a director is awaiting trial for offences under section 993 of the Companies Act 2006 for fraud, can they be stopped from trading ?

Section 993 of the Companies Act 2006 (CA 2006) makes it an offence for any business of a company to be carried on with intent to defraud creditors, or for any fraudulent purpose and every person who is knowingly a party to such activities commits the offence. Any person convicted of this offence is liable on conviction on indictment to imprisonment for up to ten years and/or to an unlimited fine, or, on summary conviction in England and Wales, to imprisonment of up to six months and/or an unlimited fine.

Section 9 of the Fraud Act 2006 makes fraudulent trading by sole traders, partnerships and trusts and other non-corporate entities a criminal offence. On conviction, offenders are liable on conviction on indictment to a maximum term of imprisonment of ten years and/or an unlimited fine. Following summary conviction, the maximum term of imprisonment which may be imposed is six months and/or an unlimited fine. For more information, see Practice Note: Fraudulent trading under the Fraud Act 2006.

In addition, any director convicted of this offence may be disqualified from acting as a director for up to a maximum of 15 years if made by the Crown Court or five years if made

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