Concerns about illegal phoenix activity

This information sheet (INFO 212) explains what you can do if you are concerned about or suspect illegal phoenix activity, are dealing with an insolvent business or chasing unpaid wages or superannuation.

What is illegal phoenix activity?

Illegal phoenix activity is where a new company is created to continue the business of an existing company that has been deliberately liquidated to avoid paying outstanding debts, including taxes, creditors and employee entitlements.  

This illegal practice usually happens when company directors transfer the assets of an existing company to a new company without paying true or market value, leaving debts with the old company. Once the assets have been transferred, the old company is placed in liquidation. When the liquidator is appointed, there are no assets to sell so creditors cannot be paid.

Find out the warning signs of illegal phoenix activity.

Where to report illegal phoenix activity

You can report phoenix behaviour by:

All reports and tip-offs about suspected phoenix activity are forwarded to the Phoenix Taskforce, a cross-government taskforce dedicated to stamping out illegal phoenix activity.

The taskforce takes all reports seriously. Due to privacy laws, it is unable to inform you of the outcome of the information you provide, or provide updates on progress.

Chasing payments from an insolvent company

To check if a company is in liquidation or under external administration, you can search ASIC Connect or ASIC’s Public Notices website which includes notices of applications to court for an order to put the company into liquidation.

If you are trying to get invoices paid by a company that is under external administration, you should contact the liquidator or administrator and provide relevant documentation. See Liquidation: A guide for creditors (INFO 45) and Voluntary administration: A guide for creditors (INFO 74) for more information.

If you have evidence that a company has transferred assets to another company you can report your concerns to the liquidator in the first instance.  If the liquidator has concerns that the company is engaging in illegal phoenix activity they are required to report this to ASIC. If a liquidator has not yet been appointed our disputes about unpaid debts info sheet 173, has more information.

ASIC may take action if evidence shows that directors intentionally misused company assets or acted in a way that is contrary to the company’s best interests. We generally do not act for individuals to help them recover lost money, but we will take action where it results in a greater market impact and benefits the general public more broadly.  

Find out more about ASIC action on illegal phoenix activity.

Employees seeking outstanding wages, super and unpaid entitlements

If you are chasing unpaid wages from an employer, contact the Fair Work Ombudsman or call 13 13 94.

If you want to report unpaid super contact the Australian Taxation Office or call 13 28 61.

If a liquidator has been appointed to the insolvent company you may be able to claim unpaid entitlements through the Fair Entitlements Guarantee (FEG).

For more information read about how to resolve disputes about employee entitlements (INFO 160)

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances may be taken into account when determining how the law applies to you.

This is Information Sheet 212 (INFO 212), reissued in May 2019.

Whistleblowing

Guidance for company officers and company auditors on the whistleblower protection regime

30 June 2020

Information sheets to help companies, company officers and company auditors understand and comply with their whistleblower protection obligations

Whistleblower protections

Answers to common questions on the rights and protections for whistleblowers

Business ethics: New challenges, better theories, practical solutions
A speech by ASIC Commissioner John Price, 9 December 2019. John discusses the important role whistleblowing can play in fostering an ethical culture for business.

ASIC gives guidance on companies’ whistleblower policies and relief to small not-for-profits
Media release 19-308MR. 13 November 2019

Whistleblower protections for not-for-profit organisations, 29 May 2019

 


Whistleblowers and the Corporations Act

Corporations Act Whistleblowing

ASIC Executive Director Warren Day talks about whistleblowers and the important role they play in identifying and calling out misconduct and harm to consumers and the community.

Read the transcript

ASIC and whistleblowers

Asic Whistleblower Thmb

ASIC Executive Director Warren Day discusses when ASIC will act on whistleblowing information.

Read the transcript


Fair Work Ombudsman

You can contact the Fair Work Ombudsman if you would like to report someone who isn't complying with workplace laws or you need help in resolving a workplace issue.


Last updated: 03/07/2019 11:10