Phoenixing is the registering of a new company to take-over the failed or insolvent business of another company. While phoenix activity does not always involve illegal conduct, illegal phoenix activity has attracted significantmedia and public scrutiny – and rightly so. Illegal phoenix activity involves company directors deliberately trying to avoid paying liabilities such as taxation debts and employee entitlements.
On 12 September 2017, the Turnbull Government announced it is taking action to “crack down” on illegal phoenixing activity. In her media release, Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP said:
“The Turnbull Government is committed to ensuring individuals who engage in illegal activity are held to account and that the regulators are equipped to take stronger action to both deter and penalise phoenixing activity for the benefit of all Australians."