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In the paper Action against Fraudulent Phoenix Activity: Proposals Paper, Treasury made a range of recommendations to amend director's liability provisions and taxation law.
Recommendations made by the proposal paper included:
- removing the ability of directors engaged in fraudulent phoenix activity to avoid personal liability for PAYG(W) liabilities by placing the company into administration or liquidating the company
- ensuring the promoter penalty regime is able to target those individuals promoting fraudulent phoenix activity
- providing the Commission of Taxation with the discretion to require a company to provide an appropriate bond (supported by sufficient penalties) where it is reasonable to expect that the company would be unable to meet its tax obligations and/or engage in fraudulent phoenix activity
- making directors personally liable for the debts of a liquidated company in circumstances where a 'new' company adopts the same or similar names as its previous incarnation
- adopting the doctrine of inadequate capitalisation and allow the corporate veil to be lifted where a company sets up a subsidiary with insufficient capital to meet the debts that it could be reasonably expected to incur.
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Q. Approaches to defining phoenix activity? There are a number of approaches to defining phoenix activity that could be used. These approaches are summarised below. It should b
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