IBC1 min read
Wrongful Trading
An offence under Section 66(2) of IBC where an officer of the corporate debtor, knowing that there was no reasonable prospect of avoiding insolvency, continued to incur debts. The NCLT can make such persons personally liable.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Wrongful Trading in Indian corporate law?▼
An offence under Section 66(2) of IBC where an officer of the corporate debtor, knowing that there was no reasonable prospect of avoiding insolvency, continued to incur debts. The NCLT can make such persons personally liable.
Q2. Why is Wrongful Trading important for compliance?▼
Wrongful Trading is governed by the Insolvency and Bankruptcy Code, 2016 and regulated by IBBI. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Wrongful Trading?▼
Wrongful Trading is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with IBC regulatory matters in India.
Contextual Analysis & Regulatory Updates🔗
Read our latest analysis and critical updates on corporate circulars related to IBC:
IBBI Discussion Paper 2026: Guidance for Insolvency Professionals on Due Diligence to Detect Fraudulent or Malicious Initiation of CIRP
Published: 14 August 2026
MCA Invites Stakeholder Suggestions on Integrated Platform for Insolvency Ecosystem (iPIE) 2026
Published: 28 July 2026
IBBI Extends PGIRP Form Filing Deadline for Personal Guarantor Insolvency Cases to 30th September 2026
Published: 9 July 2026