Wrongful trading

wrongful trading: in company law, the civil liability of a company director under section 214 of the Insolvency Act 1986; after a company has gone into insolvent liquidation, a court can make a wrongful trading order against someone who was a director of the company if that person, knowing there was no reasonable prospect of the company avoiding an insolvent liquidation, failed to take every step which a reasonably diligent person would take to minimise potential loss to the company’s creditors. The court will order the director to contribute a financial sum towards the overall pool of funds available for distribution to the company’s creditors.