Discuss the concept of insolvent trading under the Companies Act, 2013.

There is no doubt that corporate powers of the Board of Directors continue to exist until a company is ordered to be wound up. Section 277(3) of the Companies Act, 2013 (corresponds to section 445(3) of the Companies Act, 1956) states that the winding up order shall be deemed to be a notice of discharge to the officers, employees and workmen of the company, except when the business of the company is continued. However, even before a winding up commences, which in any case as stated in section 441 of the Companies Act, 1956 (corresponding to section 357 of the Companies Act, 2013), is the date of presentation of a petition for the winding up of a company, the Board of Directors of the company must ensure that if there is no reasonable prospect of paying its debts, the company should not contract for further debts and obtain goods and services on credit. Such trading will constitute insolvent trading and it may expose it directors to consequences trading (carrying on the business of a company with an intention to defraud). Though the provisions of Chapter XX of the Companies Act, 2013 relating to winding up of companies commencing from section 270 to section 365 have been brought into force, it is worth noting that in the case of a voluntary winding up. Section 308 of the Companies Act, 2013 states that a voluntary winding up shall be deemed to commence the date of passing of the resolution for voluntary winding up under section 304. Section 309 of the Companies Act, 2013 declares that that the corporate state and corporate powers of the company shall continue until it is dissolved. In any winding up other than a voluntary winding up, section 357(2) of the Companies Act, 2013 relating to the winding up of a company by the Tribunal shall be deemed to commence at the time of the presentation of the petition for the winding up itself. In Re: William C. Leitch Bros. [1932] 2 Ch. 71, it was held that of a company continues to carry on business and to Incur debts at a time when to the knowledge of the director, there is no reasonable prospect of the creditor ever riving payment of those debts, it is in general a proper inference that the company is carrying on business with intent to defraud.