Last year we saw the government begin a crackdown on phoenixing activity from several different angles with the introduction of several new draft laws. Click here for our previous report
We have confirmed with the Office of the Treasury, that the draft bills have now been withdrawn from parliament, and will be reviewed taking into account public submissions. A decision is expected in the next couple of weeks, at which point the government is likely to publish a revised exposure draft bill for public consultation.
You may recall that the bill sought to make directors personally liable for unpaid super and GST if they were more than 3 months late in submitting and paying their BAS. These provisions were a part of a general bolstering of laws relating to director’s obligations. However, there are currently further bills being considered to counter phoenix activity known colloquially as the Phoenixing Bill and the Similar Names Bill.
The Phoenixing Bill proposes to give ASIC the power to wind up abandoned companies, with the aim of protecting workers entitlements. The Similar Names Bill proposes to impose personal liability on directors for the debts of a company for 5 years if it has a similar name to a failed liquidated company.
And Treasury has just closed submissions on the exposure draft of a further bill, the Personal Liability for Corporate Fault Reform Bill 2012. This is being described as the first tranche of proposed changes to commonwealth legislation relating to directors’ liability. The aim of these reforms is to harmonise the approach in the imposition of personal criminal liability or corporate fault across Australian jurisdictions.
So it’s safe to say there is a lot of activity in this area at the moment- so keep watching this space if you are a director because this applies to you!