The Federal Government has over the last few years been implementing a number of changes into the corporate insolvency regime, with a particular focus on addressing what it has identified as ‘illegal phoenixing activity’ (Illegal Phoenixing).
At its essence, Illegal Phoenixing is activity undertaken by persons with respect to a corporate entity that involves the deliberate stripping/ transferring of assets from that entity in order to avoid or minimise payment of liabilities. Another common trait of Illegal Phoenixing is that the transferred assets end up in the control or possession of another corporate entity which is associated with the directors or shareholders of the original entity.
On 17 February 2020, Royal Assent was given to the Treasury Laws Amendment (Combatting Illegal Phoenixing) Bill 2019 (Bill) with the result that the measures contained in the Bill are now in force.
The Bill implements a number of measures and we have highlighted the three main changes.
The Illegal Phoenixing is Widening the Scope of Directors Personal Liability
article is only available to our members.
Please enter your username and password below to gain access.
Click here to become a member.