Moves to crackdown on phoenixing, long a plague on the construction industry, have been branded a toothless tiger that dont go far enough.
Under the practice, directors transfer the business of an existing company to a new company and leave debts in the old company.
The directors then abandon or liquidate the first company to avoid paying its debts, creditors and employees.
The impact on creditor businesses, many of them small to medium operations, is substantial.
A 2019 PwC report, the Economic Impact of Potential Illegal Phoenix Activity, said phoenixing cost the economy up to $5.13 billion annually.
As of January, all directors of Australian companies have been required to register for a Director Identification Number (DIN) or face p…
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