In brief - The Federal Government's push for
significant corporate and taxation reform to quash phoenix activity
has stalled, but probably only temporarily
The federal election result means that the government's
Treasury Laws Amendment Bill and Insolvency Practice Rules
Amendment look to be back on the agenda. Company directors should
take action now to understand the phoenix reforms and consequences
for non-compliance.
What is phoenix activity?
Phoenix activity is not formally defined, nor specifically
prohibited, in Australian law. Generally, it refers to the process
of ending the existence of one company, then continuing to run the
same business through another.
That process may amount to an abuse of the corporate form, where
individuals are using the phoenix company to avoid the payment of
debts that were incurred by the original company (in particular tax
and superannuation charges).
