Concerns about illegal phoenix activity
This is Information Sheet 212 (INFO 212). It 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.
This page contains:
- What is illegal phoenix activity?
- Where to report illegal phoenix activity
- Chasing payments from an insolvent company
- Employees seeking outstanding wages, super and unpaid entitlements
Illegal phoenix activity occurs when a new company, for little or no value, continues the business of an existing company that has been liquidated or otherwise abandoned to avoid paying outstanding debts, which can include taxes, creditors and employee entitlements.
This illegal practice usually happens when company directors abandon the company or transfer the business 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 or abandoned. If the liquidator is appointed, there are no assets to recover, which means creditors cannot be paid.
Find out the warning signs of illegal phoenix activity.
You can report phoenix behaviour by:
- calling 1800 060 062
- completing a Tip-Off form available from the ATO website
- emailing PhoenixReferrals@ato.gov.au.
All reports and tip-offs about suspected phoenix activity are shared with 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, nor provide updates on progress.
To check if a company is in liquidation or in administration, you can search ASIC Connect or ASIC’s Published 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), Voluntary administration: A guide for creditors (INFO 74) for more information.
If you have evidence that a company has transferred assets to another company, 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 must report this to ASIC. If a liquidator has not yet been appointed, our disputes about unpaid debts (INFO 173), has more information.
ASIC may take action if evidence shows the director/s 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.
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 you are an employee of a company in liquidation and have outstanding employee entitlements, you may be able to claim unpaid entitlements through the Fair Entitlements Guarantee (FEG). You can also contact the liquidator for more information.
For more information read about how to resolve disputes about employee entitlements (INFO 160).
- Protecting yourself when you supply goods and services on credit (INFO 194)
- What to do if your company is in financial trouble
- Closing a small business
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.
Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.
This information sheet was reissued in August 2021.