If your business is insolvent or can't pay your debts
If your business is experiencing difficulties, it's important to take action and get advice straight away. The ASIC website has information:
- for directors whose companies are in financial difficulty or insolventExternal Link
- about phoenix activityExternal Link.
If you need to wind up your company or re-structure your business, a registered liquidator or registered trustee will be able to help you. You can use the ASIC Professional Registers SearchExternal Link to verify their legitimacy.
Be wary of inappropriate insolvency advice that could lead to phoenix activity.
Insolvency advice to watch out for
Registered liquidators and trustees will provide you with sound insolvency advice that you can rely on. But some insolvency or pre-insolvency advisers suggest actions designed to help directors avoid paying their creditors and create new companies to continue without debts.
This is phoenix activity and can result in serious penalties. Following this advice could put you at risk of a fine, criminal conviction or even a jail term.
Be wary if an adviser:
- contacts you to offer advice, especially after your creditor has taken court action
- suggests you transfer your assets to a third party without payment
- offers advice on restructuring your business to avoid paying debts or other obligations
- offers to charge a fee based on a percentage of your debt or obligations
- tells you they know a liquidator who will protect your personal interests or assets
- tells you about a valuer who can under-value any assets
- asks you to provide incorrect information to authorities
- suggest you can withhold or destroy relevant records to prevent access by the liquidator or bankruptcy trustee
- suggests they deal with the liquidator or trustee on your behalf
- encourages you to engage in any kind of phoenix activity.
If you're offered advice that you think is illegal, report it to us.
Find out how the Phoenix Taskforce is working to stop people promoting or engaging in phoenix activity.
Authorised by the Australian Government, Canberra.