Difference between revisions of "Reckless trading"
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Latest revision as of 18:07, 23 January 2012
A company may not carry on its business recklessly, with gross negligence, with intent to defraud any person or for any fraudulent purpose; or trade under insolvent circumstances.
A company satisfies the solvency and liquidity test if, considering all reasonably foreseeable financial circumstances of the company at that time-
- the assets of the company exceed the liabilities of the company as fairly valued;
and
- it appears that the company will be able to pay its debts as they become due in the ordinary course of business for a period of-
- 12 months after the date on which the test is considered; or
- in the case of a distribution, 12 months following that distribution.
