Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
Subscribe to our newsletter SIGN UP
New bill targets corporate form misuse, insolvency advisers

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

New bill targets corporate form misuse, insolvency advisers

The government has introduced new legislation aimed at curbing phoenix activity, including additional regulatory powers to prosecute directors and other professional advisers who engage in or facilitate this activity.

Business Jotham Lian 14 February 2019
— 1 minute read

The new legislation introduced in Parliament yesterday will make it 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.

Advertisement
Advertisement

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.

Directors will be prevented from backdating their resignations to avoid personal liability, while the director penalty provisions will be extended to make directors personally liable for their company’s GST and related liabilities.

The bill will also seek to prevent a sole director from resigning and leaving a company as an empty corporate shell with no director.

The ATO will also be able to retain refunds where there are outstanding tax lodgments.

“The legislation is targeted at those who misuse the corporate form and builds in a number of important safeguards to ensure the new laws do not affect honest businesses and genuine efforts to rescue a business in financial distress,” said assistant treasurer Stuart Robert.

“These safeguards include an extension to the government’s already legislated safe harbour for directors of companies in financial distress. The legislation also includes amendments to the safe harbour to ensure these important provisions continue to operate as intended and continue to promote a culture of business restructure and turnaround.

“In addition to this legislation, the government has also amended the Insolvency Practice Rules to restrict the voting rights of certain creditors related to the phoenix company to ensure the interests of honest creditors are not affected by those complicit in illegal phoenix activity.”

This email address is being protected from spambots. You need JavaScript enabled to view it. 

New bill targets corporate form misuse, insolvency advisers
image intro
accountantsdaily logo
Jotham Lian

Jotham Lian

Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

Business
FROM THE WEB