This type of business fraud costs the Australian economy somewhere between $2.85 and $5.13 billion every year. (1) In 2017 alone, there were more than 20,000 phoenix operators in Australia. On average, each phoenix business leaves 44 other businesses in debt. And, phoenix activity jeopardises up to 67,000 employees per year.
Domenic Calabretta, managing director, Mackay Goodwin, said, Directors of companies caught engaging in illegal phoenix activity are subject to fines and even prison terms. With ASIC proactively investigating companies it suspects of fraudulent phoenix activity, the chances of getting caught are high. Accountants and business advisors should encourage their clients to restructure their business or liquidate it legally…
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