Fraudulent trading under the Fraud Act 2006


Published by a ÑÇÖÞÉ«ÇéÍø Corporate Crime expert
Practice notes

Fraudulent trading under the Fraud Act 2006


Published by a ÑÇÖÞÉ«ÇéÍø Corporate Crime expert

Practice notes
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Fraudulent trading under the Fraud ACT 2006

A Defendant who is a sole trader, in a partnership or a trust, commits the offence of fraudulent trading if they are knowingly party to the carrying on of a company’s business either with intent to defraud creditors or for any other fraudulent purposes.

Where the offence is committed by a company it would be charged under section 993 of the Companies Act 2006 (CA 2006).

Section 9 of the Fraud Act 2006 (FrA 2006) extends the type of fraudulent business to circumstances in which the business is not carried on by a company or a corporate body. This parallels the offence that applies in the case of fraudulent businesses carried on by companies and other corporate bodies but extends criminal liability to non-corporate traders, including sole traders, partnerships and trusts and other non-corporate traders.

The offence of fraudulent trading has evolved through case law and it is established that the offence has these features:

  1. •

    dishonesty is an essential ingredient of the offence

  2. •

    the mischief is the

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Jurisdiction(s):
United Kingdom
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Key definition:
Fraud definition
What does Fraud mean?

The offence of fraud under the Fraud Act 2006, s 1, may be committed by: (a) dishonestly making a false representation (to a person, or to any system or device) with a view to gain or with intent to cause loss or expose to a risk of loss; (b) dishonestly (and with a view to gain or with intent to cause loss, etc) failing to disclose information when under a legal duty to disclose it; or (c) dishonest abuse of position, with a view to gain or to cause loss, etc. It is irrelevant whether gain, loss or exposure to loss actually occurs.

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