380 Carrying on business fraudulently or dishonestly incurring debt

(1)

Every person who is knowingly a party to a company carrying on business with intent to defraud creditors of the company or any other person or for a fraudulent purpose commits an offence and is liable on conviction to the penalties set out in section 373(4).

(2)

Every director of a company who,—

(a)

by false pretences or other fraud induces a person to give credit to the company; or

(b)

with intent to defraud creditors of the company,—

(i)

gives, transfers, or causes a charge to be given on, property of the company to any person; or

(ii)

causes property to be given or transferred to any person; or

(iii)

caused or was a party to execution being levied against property of the company—

commits an offence and is liable on conviction to the penalties set out in section 373(4).

(3)

Every director of a company commits an offence and is liable on conviction to the penalties set out in section 373(4), who, with intent to defraud a creditor or creditors of the company, does any thing that causes material loss to any creditor.

(4)

Every director of a company commits an offence and is liable on conviction to the penalties set out in section 373(4) if—

(a)

the company incurs a debt (the debt); and

(b)

the company—

(i)

is insolvent at the time that it incurs the debt; or

(ii)

becomes insolvent by incurring the debt; or

(iii)

is insolvent at the time that it incurs debts that include the debt; or

(iv)

becomes insolvent by incurring debts that include the debt; and

(c)

the director knows, at the time when the company incurs the debt, that the company is insolvent or will become insolvent as a result of incurring the debt or other debts that include the debt; and

(d)

the director’s failure to prevent the company incurring the debt is dishonest.

(5)

In subsection (4), insolvent means that the company is unable to pay its debts.

Compare: 1955 No 63 s 461D; 1980 No 43 s 47

Section 380 heading: amended, on 3 July 2014, by section 7(1) of the Companies Amendment Act 2014 (2014 No 46).

Section 380(3): inserted, on 1 November 2007, by section 33 of the Companies Amendment Act 2006 (2006 No 56).

Section 380(4): inserted, on 3 July 2014, by section 7(2) of the Companies Amendment Act 2014 (2014 No 46).

Section 380(5): inserted, on 3 July 2014, by section 7(2) of the Companies Amendment Act 2014 (2014 No 46).