When you run a Company, sometimes things can go wrong. Maybe you have made a mistake in your management of the company? This is ok, we are human and business can be complex. Or Perhaps something has happened out of your control like Covid -19 or one of your Customers not paying you.
In this case you can liquidate your Company and avoid paying many of the debts of your business, this is one of the great things about operating a business as a Company but in some cases Business Operators will take advantage of this to deliberately avoid paying debts. In this case as a Director you could be pursued by the Government.
From ASIC’s perspective, the key characteristics of illegal phoenix activity involve circumstances where:
A company fails and is unable to pay its debts;
https://asic.gov.au/about-asic/news-centre/articles/illegal-phoenix-activity/
Directors of that company act in a manner which intentionally denies unsecured creditors (usually small businesses and employees) equal access to that company’s assets in order to meet unpaid debts; and
Within some period of time soon after the failure of the initial company (usually within 12 months), a new company commences using some or all of the assets of the former business, and is controlled by parties related to either the management or directors of the previous entity.
If you are worried about the Financial position of your Company or trying to work out how to re-start your business after a failed business has gone under please come in and see us. At Maddick Consulting Group we will only advise you on Business Structuring that is Legal and Ethical.