Is a phoenix company trying to rip you off?

Published on 01 May 2017

Would you know if a phoenix operator was trying to rip you off?

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

You may be at risk if you notice:

• you are not receiving a payslip
• your pay is late or less than what it should be
• your superannuation or other entitlements are not being paid.

The SRO is working with state and federal government agencies as part of the Phoenix Taskforce, which aims to help stamp out illegal phoenix behaviour.

This illegal phoenix activity impacts the community, businesses, employees, contractors, the government and environment, including:

• non-payment of wages, superannuation and accrued employee entitlements
• getting an unfair competitive advantage over other businesses
• non-payment of suppliers
• loss of government revenue and increased monitoring and enforcement costs
• avoidance of regulatory obligations.

Phoenix activity doesn't just impact those people directly affected. It deprives the whole community of necessary funds that could have contributed to hospitals, roads, education and other essential services.

The SRO is committed to stamping out this activity with members of the Phoenix Taskforce and helping to prosecute the worst offenders to the full extent of the law.

If you are aware of any illegal phoenix activity, please see the ATO’s website for tips, videos and where to go for help. The SRO also welcomes tip-offs from the community about illegal behaviour.