Selling Company Assets Below Market Value
A transaction at undervalue is when a company sells an asset for less than its market value. This can happen for various reasons, such as if the company is insolvent and needs to raise cash quickly or if the director is personally benefiting from the transaction. When a director sells a company asset at an undervalue, they are breaching their statutory duty and can be held personally liable for the difference between the market value of the asset and the price that it was sold for.