In terms of section 214 of the Insolvency Act 1986 a director of a company in insolvency may be ordered by a court to contribute towards any losses incurred by the company’s creditors.

The court will only make a contribution order where the director is shown to have known, or that he ought to have known that the company was insolvent and despite this continued to trade.

Section 213(1) of the Insolvency Act 1986 provides that,

"If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect."