When a director(s) of a company or member(s) of an LLP has run the company/LLP with intention of defrauding creditors, or for any fraudulent purpose, this is known as Fraudulent Trading.
Proving Fraudulent Trading is often very difficult to do as the criminal burden of proof must be overcome – that is establishing beyond reasonable doubt that the company was run with the intent of defrauding creditors.
If found guilty of Fraudulent Trading, not only is it a criminal offence but those involved can be made personally liable for the debts of the company.
Fraudulent Trading is covered in detail by Section 213 of the Insolvency Act 1986.