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.
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