- Explanatory Memorandum - DOCX 179KB
- Explanatory Memorandum - PDF 954KB
- Explanatory Statement - DOC 64KB
- Explanatory Statement - PDF 192KB
- Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2018 - DOC 296KB
- Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2018 - PDF 574KB
- Insolvency Practice Rules (Corporations) Amendment (Restricting Related Creditor Voting Rights) Rules 2018 - DOC 275KB
- Insolvency Practice Rules (Corporations) Amendment (Restricting Related Creditor Voting Rights) Rules 2018 - PDF 341KB
In the 2018-19 Budget, the Government announced a package of reforms to the corporations and tax laws to combat illegal phoenix activity.
The proposed reforms include a range of measures to both deter and disrupt illegal phoenixing and more harshly punish those who engage in and facilitate this illegal activity.
The exposure draft legislation includes reforms to:
- introduce new phoenix offences that target those who conduct and those who facilitate illegal phoenix transactions;
- It will now be an offence for company directors to engage in creditor‑defeating transfers of company assets that prevent, hinder or significantly delay creditors’ access to those assets.
- Pre-insolvency advisers and other facilitators of illegal phoenix activities will also be liable, as there will be a separate offence for any person who procures, incites, induces or encourages a company to make creditor‑defeating transfers of company assets.
- These will be both criminal and civil offences, attaching the highest penalties available under the law.
- The offences will be supported by an extension of the existing liquidator asset clawback avenues to cover illegal phoenix transactions. ASIC will also receive a new regulatory tool to recover property that has been transferred under an illegal phoenix transaction.
- prevent directors from backdating their resignations to avoid personal liability;
- prevent a sole director from resigning and leaving a company as an empty corporate shell with no director;
- extend the director penalty provisions to make directors personally liable for their company’s GST and related liabilities;
- expand the Australian Taxation Office’s existing power to retain refunds where there are tax lodgments outstanding;
- restrict the voting rights of related creditors of the phoenix operator at meetings regarding the appointment or removal and replacement of an external administrator.
The legislation is tightly targeted at those who misuse the corporate form, while minimising any unintended impacts on legitimate businesses and restructuring.
The proposed reforms follow extensive public consultation undertaken in 2017 and have been informed by the work of the Government’s Phoenix Taskforce.
- Association of Independent Insolvency Practitioners (AIIP) - PDF 137KB
- Australian Chamber of Commerce and Industry - PDF 244KB
- Australian Council of Trade Unions (ACTU) - PDF 351KB
- Australian Dental Industry Association (ADIA) - PDF 740KB
- Australian Institute of Company Directors (AICD) - PDF 606KB
- Australian Institute of Credit Management (AICM) - PDF 6MB
- Australian Manufacturing Workers’ Union (AMWU) - PDF 75KB
- Australian Restructuring Insolvency and Turnaround Association (ARITA) - PDF 1MB
- Australian Securities and Investments Commission (ASIC) - PDF 133KB
- Australian Small Business and Family Enterprise Ombudsman (ASBFEO) - PDF 1MB
- Chartered Accountants Australia and New Zealand (CAANZ) - PDF 188KB
- Condon Associates - PDF 3MB
- Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) - PDF 677KB
- CPA Australia - PDF 1MB
- Crouch Amirbeaggi - PDF 1MB
- Dentons - PDF 449KB
- Dye and Co - PDF 2MB
- Electrical Trades Union (ETU) - PDF 267KB
- Geoff Green - PDF 193KB
- Geoffrey McDonald - PDF 1MB
- Governance Institute - PDF 138KB
- Helen Anderson - PDF 558KB
- Housing Industry Association - PDF 660KB
- KordaMentha - PDF 136KB
- KPMG - PDF 122KB
- Law Council of Australia - PDF 188KB
- Law Society of New South Wales - PDF 2MB
- Maurice Blackburn Lawyers - PDF 681KB
- Mendelsons National Debt Collection Lawyers - PDF 338KB
- Norton Rose Fulbright - PDF 2MB
- Pitcher Partners - PDF 3MB
- PwC - PDF 184KB
- Samuel Piscopo - PDF 292KB
- Shine Wong - PDF 454KB
- Small Business Development Corporation - PDF 604KB
- Telecommunications Industry Ombudsman - PDF 225KB
- Uniting Church in Australia - PDF 322KB