The Virgin empire founder spoke about his first meeting with Mr Trump on CBC's On The Money programme to highlight the need for the would not to be "sycophantic" towards the US president.
Mr Trump had been going through one of his bankruptcies at the time and spent much of the lunch with Mr Branson discussing "five people who he'd asked for help who'd refused to help him — and how he was going to spend the rest of his life destroying those five people," the entrepreneur said.
Mr Branson described Mr Trump as "vindictive".
The President has received criticism for what many perceive as anti-immigrant, anti-minority rhetoric on the campaign trail and in the White House. The administration has continued to push for a travel ban on people from six Muslim-majority countries from entering the US. The executive order has been put on hold by courts around the country for the moment.
One of the many scandals Mr Trump has faced is also the language he used about women in a leaked audio clip from the television programme Entertainment Tonight. In the clip, he discusses "grabbing" women by their genitals.
Mr Trump also drew the ire of several world leaders when he withdrew the US from the Paris Agreement on climate change because he believes it puts the US at an "economic disadvantage".
Mr Branson said all these incidents combined show that Mr Trump's views "are palpably wrong therefore it would be morally wrong to try to kowtow to him."
He also spoke about how he felt a hard Brexit - a measure Mr Trump also supported - is "absolutely and utterly mad".
Much of the business community feels it is "one of the saddest things that's ever happened to Britain and to Europe," said Mr Branson.Reuse content