The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 was recently passed by Parliament on 5 February 2020 but is yet to be enacted. The new law will amend the Corporations Act and introduces new criminal offences and civil penalties for:
- company officers that fail to prevent companies from making creditor-defeating dispositions; and
- other persons (e.g. advisors) that facilitate a company making a creditor-defeating disposition.
The maximum jail time for an individual found to have committed criminal offences is 10 years imprisonment.
Amongst the changes to take effect, here are some of the highlights:
- The new law allows liquidators to more easily apply for a court order to overturn a voidable creditor-defeating disposition. Similarly, ASIC can also seek recovery orders from the Court for the benefit of company creditors.
- Directors will also not be able to backdate resignations or cease to be a director when this would leave the company with no directors.
- Further, there are amendments to A New Tax System (Goods and Services Tax) Act 1999and Taxation Administration Act 1953 to enable the Commissioner of Taxation (i.e the ATO) to collect estimates of anticipated GST liabilities and make company directors personally liable for the company’s GST liabilities in certain circumstances.
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