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  • Illegal phoenix activity

    Work out what illegal phoenix activity is, the warning signs, how to protect yourself and how to report a company.

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    About illegal phoenix activity

    Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. Phoenixing causes significant harm to the community:

    • Employees miss out on wages, superannuation and entitlements.
    • Other businesses are put at a competitive disadvantage.
    • Suppliers or sub-contractors are left unpaid.
    • The community misses out on revenue that could have contributed to community services.


    Warning signs of illegal phoenix activity

    There are warning signs that indicate a business could be involved in illegal phoenix activity.

    We have tips on how to:

    • protect your business from phoenix companies
    • check if the business you work for could phoenix.


    What to look for when running a business

    When running your own business you can take steps to protect yourself from other businesses that may be wound up or closed. Look out for any of the following behaviours from a company you are working with:

    • quotes that are lower than market value
    • company directors who have been involved with liquidated entities before
    • requests for payments to a new company
    • changes to a company's directors and name, while the manager and staff remain the same.

    Before you work with another business

    Before you work with a business, check them out thoroughly by:

    • confirming they are registered and their Australian business number (ABN) is valid at ABN LookupExternal Link
    • searching the ASIC Connect registersExternal Link to check they are      
      • a registered entity
      • not in liquidation or external administration
    • asking for references
    • doing a credit check on them
    • searching online to see if the company and its directors have any negative media reports
    • reviewing your terms of trade, such as      
      • asking for upfront payments, cash on delivery or payments in instalments
      • ensuring you’re taking a large enough deposit.

    Avoid illegal phoenix advice

    If your business is insolvent or struggling to pay its debts, it's important to seek specialist advice from a qualified and registered insolvency practitioner.

    Registered liquidators and trustees will provide you with sound legal advice that you can rely on. Be wary of other insolvency advisers who suggest actions designed to help directors avoid paying their creditors.

    What to look for if you're an employee or contractor

    If you're working for a company, look out for these warning signs that your employer is involved in illegal phoenix activities:

    • you don't receive a payslip
    • the company ABN and name changes, but the phone number or address stays the same
    • your super or other employment entitlements are not being paid
    • your pay is late, less than what it should be or you are being paid under the minimum wage
    • your payslip records a different employer name to whom you believe you work for.

    You can protect yourself by:

    Visa holders

    If you're working in Australia on a subclass 457 or subclass 482 Temporary Skill Shortage (TSS) visa, you must be working for your sponsor business. If you are working for a different business, you may be missing out on employee entitlements or being paid less than the award rate.

    The Fair Work Ombudsman has resources available to help you check your rights and entitlementsExternal Link.

    Report illegal phoenix activity

    We're working with other government agencies through the Phoenix Taskforce to stamp out illegal phoenix activity.

    You can help us stop illegal phoenix activity by reporting it. If you know of or suspect phoenixing, report it to us by:

    We take all reports seriously.

    Due to privacy laws, we can’t give you any updates or tell you the outcome of the information you provide.

    You can also:

    Media releases

    Authorised by the Australian Government, Canberra.

    Last modified: 03 Nov 2022QC 33609