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Anti-phoenixing law

On 18 February 2020, the federal government introduced Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020. The laws are aimed at countering illegal phoenix activity.

What is illegal phoenix activity?

Illegal phoenix activity, as described by ASIC, is where a new company is created to continue the business of an existing company that has been deliberately liquidated to avoid paying outstanding debts, including taxes, creditors and employee entitlements. The illegal practice occurs when company directors transfer the assets of an existing company to a new company without paying true or market value, leaving debts with the old company. Once the assets have been transferred, the old company is placed in liquidation.

Safe Harbour – information for directors of a company

If your company or a company you advise is unable to pay its debts as and when they fall due there is an option. Instead of simply placing the company into Administration or Liquidation, both formal insolvency processes, there are now new “safe harbour laws” which provide another option for directors, effectively avoiding a formal insolvency process.

This new option means that directors of a company can put a plan in place to restructure the business and at the same time avoid the possibility of having personal liability for debts incurred when the company was insolvent.

This new option means that directors of a company can put a plan in place to restructure the business and at the same time avoid the possibility of having personal liability for debts incurred when the company was insolvent.

Insolvency in Australia – What you need to know

Did you know that around 60% of new businesses in Australia fail or cease trading within the first three years of commencing?

Safe Harbour – The New Option for Directors

Did you know that around 60% of new businesses in Australia fail or cease trading within the first three years of commencing?

Avoiding Insolvency

Did you know that around 60% of new businesses in Australia fail or cease trading within the first three years of commencing?