2. Wrongful trading will only occur where, prior to the commencement of a winding up, the director knew that there was no reasonable prospect of the company avoiding insolvent liquidation. True or false? True False 3. How does fraudulent trading under the Companies Act 2006 differ to fraudulent trading under the Insolvency Act 1986? Fraudulent trading under the Companies Act 2006 imposes civil liability only, whereas fraudulent trading under the Insolvency Act 1986 imposes criminal liability also. Fraudulent trading under the Companies Act 2006 only applies to registered companies, whereas fraudulent trading under the Insolvency Act can also apply to partnerships and sole proprietorships. Fraudulent trading under the Companies Act 2006 can apply at any time, whereas fraudulent trading under the Insolvency Act 1986 can only apply during the course of a winding up. There is no difference - both provisions are identical