Question 51 PointWhich of the following statements best describes actions for wrongful and fraudulent trading?Only a liquidator can bring an action for wrongful trading.A liquidator can bring an action for wrongful trading against a director or any officer of a company.An award against a director for wrongful trading will be assessed on a compensatory basis.A creditor can bring an action for fraudulent trading against a director or any officer of a company. An award against a director for fraudulent trading will be assessed on a punitive basis.
Question
Question 51 PointWhich of the following statements best describes actions for wrongful and fraudulent trading?Only a liquidator can bring an action for wrongful trading.A liquidator can bring an action for wrongful trading against a director or any officer of a company.An award against a director for wrongful trading will be assessed on a compensatory basis.A creditor can bring an action for fraudulent trading against a director or any officer of a company. An award against a director for fraudulent trading will be assessed on a punitive basis.
Solution
The statement that best describes actions for wrongful and fraudulent trading is: "A liquidator can bring an action for wrongful trading against a director or any officer of a company. An award against a director for wrongful trading will be assessed on a compensatory basis. A creditor can bring an action for fraudulent trading against a director or any officer of a company. An award against a director for fraudulent trading will be assessed on a punitive basis."
Here's why:
-
"Only a liquidator can bring an action for wrongful trading." - This statement is partially correct. While it's true that a liquidator can bring an action for wrongful trading, it's not exclusive to them. Creditors can also bring an action for wrongful trading.
-
"A liquidator can bring an action for wrongful trading against a director or any officer of a company." - This statement is correct. If a company goes into liquidation, the liquidator can bring an action against the directors or officers of the company if they believe they have traded wrongfully.
-
"An award against a director for wrongful trading will be assessed on a compensatory basis." - This statement is correct. If a director is found guilty of wrongful trading, any award against them will be assessed on a compensatory basis, meaning they will be required to pay back the amount that the company lost as a result of their actions.
-
"A creditor can bring an action for fraudulent trading against a director or any officer of a company." - This statement is correct. If a creditor believes that a director or officer of a company has been involved in fraudulent trading, they can bring an action against them.
-
"An award against a director for fraudulent trading will be assessed on a punitive basis." - This statement is correct. If a director is found guilty of fraudulent trading, any award against them will be assessed on a punitive basis, meaning they will be punished financially for their actions.
Similar Questions
whether there has been a breach of the directors’ duty to avoid insolvent trading.
Which of the following is INCORRECT in relation to a director who accepts a bribe in return for selling the company’s business for a low price? Select one: a. The director has breached their statutory duties under ss 181 and 182 of the Corporations Act 2001 (Cth). b. The director may be found guilty of a criminal offence if they were intentionally dishonest. c. The director has breached their fiduciary duty to avoid a conflict of interest. d. The director will only be liable under the common law and under the Corporations Act 2001 (Cth) if they were intentionally dishonest and evidence establishing the directors’ dishonest intention must be put forward.
Which of the following is NOT a valid defence for insolvent trading? Select one: a. A director had reasonable grounds to expect that the company was solvent, and that it would remain solvent. b. A director delegated monitoring of the company’s financial situation to a competent and reliable person. c. A director was absent from management for holidays for 2 weeks. d. A director took all reasonable steps to prevent the company from incurring the debt.
What or whom prevents companies to be an accomplice of illicit trade?1 pointThe company’s official registrationThe company’s accountantsThe company's corporate social responsibility
When a business is accused of mail fraud and members of the staff face possible imprisonment, it is an example of:Multiple choice question.mediation.arbitration.civil law.criminal law.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.