ASIC Stamping Out Phoenix Activity With New Director Resignation Rules

Commencing from 18 February 2021, ASIC has changed the way it deals with and processes director resignations, thanks in part to the introduction of the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 (Cth) which notably introduces the new section 203AA of the Corporations Act 2001 (Cth) (the Act). The amendments prevent a company being left without a director and prohibits 'back-dated' director resignations. ASIC has made it abundantly clear that these measures are now in force to combat illegal phoenix activity, the practice of company directors transferring assets of an existing company to another company, whilst debt remains with the old company which is then placed into liquidation, often leaving creditors and employees with nothing. We discuss the following issues: 1. The new process for director resignations 2. Applications to ASIC and the Court to accept backdated resignations 3. Tips for companies and directors


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