✦ Plain-English Summary

Treasury Laws Amendment (Combating Illegal Phoenixing) 2019

What it does

This law cracks down on "phoenixing"—when directors deliberately shut down a company to avoid paying debts, then immediately start a new similar business. It adds new criminal offences for this practice and tightens rules around how directors can transfer company assets to dodge creditors.

Why it matters

Phoenixing costs Australian workers and small businesses real money through unpaid wages, unpaid invoices, and lost entitlements. By making it illegal and easier to prosecute, the law protects vulnerable employees and contractors from being left out of pocket.

Key details

• New offence: Directors can now be prosecuted for deliberately moving company property to defeat creditors—this covers phoenixing schemes and similar dodges
• Director accountability: Directors who resign or leave before a company collapses face stricter reporting requirements and penalties
• Tax clawback: The ATO can now hold onto tax refunds owed to dodgy companies to recover unpaid debts
• When it started: Most rules kicked in the day after the bill passed; some tax-related provisions started at the next quarter (Jan/Apr/Jul/Oct)

Official Description

Amends: the Corporations Act 2001 to: introduce new criminal offences and civil penalty provisions for company officers that fail to prevent the company from making creditor-defeating dispositions and other persons that facilitate a company making a creditor-defeating disposition; allow liquidators to apply for a court order in relation to a voidable creditor-defeating disposition; enable the Australian Securities and Investments Commission to make orders to recover, for the benefit of a company’s creditors, company property disposed of or benefits received under a voidable creditor-defeating disposition; and prevent directors from improperly backdating resignations or ceasing to be a director when this would leave a company with no directors; the A New Tax System (Goods and Services Tax) Act 1999 and Taxation Administration Act 1953 to enable the Commissioner of Taxation to collect estimates of anticipated goods and services tax (GST) liabilities and make company directors personally liable for their company's GST liabilities in certain circumstances; the Taxation Administration Act 1953 to authorise the commissioner to retain tax refunds where a taxpayer has failed to lodge a return or provide other information that may affect the amount of a refund; and five Acts to make consequential amendments.

Committee Referrals

Senate Standing Committee for the Scrutiny of Bills

No formal division recorded

This bill passed by voice vote — parliament agreed without calling a formal count. A division is only recorded when a member explicitly requests one.

No votes yet.

No votes were recorded for this bill.