ASIC is extremely wary of phoenixing on the rise
‘The onset of the COVID-19 pandemic has raised concerns within the corporate regulator that companies facing financial burdens may use the pandemic as a mask (or excuse) for engaging in phoenixing.
As well as drawing on the policing assets of the ATO, ASIC says it is looking at cracking down on examples of illegal phoenixing that it finds’
What phoenixing means in layman terms is:
When a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying debts, taxes, creditors, employee entitlements.
Because of COVID-19, the ATO are noticing an increase of many companies doing this and this will have a huge impact in Australia and will cost the country money.
If you know of a business that is doing this, the ATO need to be informed straight away so they can investigate further. You can always make an anonymous call to the ATO if you fear of any retribution.
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