Companies Act (Cap. 386), article 315

315. (1) If in the course of the winding up of a company, whether by the court or voluntarily, it appears that any busine ss of the company has been c arried on with intent to defraud creditor s of the company or creditors of any other person or for any fraudul ent purpose, the court on the appli cation of the official receiver, or the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in the manner aforesaid be personally respons ible, without any limitation of liability for all or any of the debts or other liabilities of t he company as the c ourt may direct. (2) Where the business of a company is carried on with such intent or for such purposes as is mentioned in sub-article (1), every COMP ANIES [CAP. 386. 191 person who was knowingly a party in the carrying on of the business in the manner aforesaid, shall be guilty of an offence and liable on conviction to a fine ( multa) of not more than two hundred and thirty-two thousand and nine hundred and thirty-seven euro (€232,937), or imprisonment for a term not exceeding five years , or to both such fine ( multa) and imprisonment. Wrongful trading.316. (1) The provisions of this article shall apply where a company has been dissolved and i s insolvent and it appears that a person who was a director of the company knew, or ought to have known prior to the dissolution of the company that there was no reasonable prospect that the comp any would avoid being dissolve d due to its insolvency. (2) The court, on the application of the liquidator of a company to which this article applies, m ay declare the person who was a director referred to i n sub-article (1) liable to make a paymen t towards the company’s assets as the court thinks fit. (3) The court shall not grant an application under this article if it is satisfied that the person who was a director knew that th ere was no reasonable prospect that the company would avoid being dissolved due to its insolvency and accordingly took every step he ought to have taken with a view to minimising the potential los s to the company’s creditors. (4) For the purposes of sub-articles (2) and (3), the facts whic h a director of a company ought to know or ascertain, the conclus ions which he ought to reach and the steps which he ought to take, a re those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both - (a) the knowledge, skill an d experience that may reasonably be expected of a person carrying out the same functions as are carried out by or entrusted to that director in relation to the company; and (b) the knowledge, skill and experience that the director has. (5) For the purposes of this ar ticle, "director" includes a pers on in accordance with whose directi ons or instructions the directo rs of the company are accustomed to act. Restriction on reuse of company names. Amended by: L.N. 425 of 2007; XVIII.2025.42.