Don't get burned by the illegal phoenix
10 March 2021
While most businesses work hard to do the right thing, some want to avoid paying their debts.
Some businesses even intentionally wind up their company. This is called phoenixing, and it's illegal.
Protect yourself from the risk of illegal phoenixing by taking these simple steps before entering into a business arrangement with someone.
- Search online for information about the company and its directors.
- Confirm the company and its ABN are valid by searching for it on ABN Lookup.
- Search the ASIC Connect registers to check the company is registered and if it's in liquidation or external administration.
- Run simple checks to make sure people are licensed for the work you’re asking them to do.
- Ask for references and take the time to contact them.
- Request a written contract or tax invoice and get a receipt for payment.
- Make sure any work the company has done is complete and at the right standard before paying any invoices in full.
- Ask for upfront payments, cash on delivery or payments in instalments.
- Ensure you take a reasonable deposit before starting work.
If you supect illegal phoenix activity, report it to us by phoning 1800 060 062.
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See also:
Everyday steps to protect yourself from illegal phoenix activity.