Is Trading While Insolvent a Criminal Offense?
In the United States, there is no personal liability for directors that trade while insolvent. However, in some other countries, such as the United Kingdom and Australia, there can be a range of penalties spanning from fines or a ban on leading future companies to criminal proceedings. While the concept of trading while insolvent does not exist in the United States, numerous laws still exist that regulate bankruptcy and debt in general. Understanding the potential consequences begins with learning what exactly trading while insolvent means.