Do you really know who you’re doing business with?

Illegal phoenix activity is when a new company is created to continue the business of one that has been deliberately liquidated to avoid paying taxes, creditors and employee entitlements.

To avoid being burnt, you need to know how to protect your business from these phoenix operators.

Phoenix operators can leave unpaid suppliers and employees in the lurch and give themselves an unfair competitive advantage over legitimate businesses. By avoiding taxes, these illegal operators also deprive the whole community of funds that could have contributed to essential services.

Look out for the warning signs

  • Has a business provided you with a quote that is lower than market value?
  • Have the directors of the company been involved with liquidated entities?
  • Is the company you’re working with asking you to make payments to a new company?
  • Have the directors and the company name have changed, but the same managers and staff are there?

Protect your business

There are steps you can take to protect your business against this illegal activity. These include:

  • conducting simple and free online checks through the Australian Business Register, Australian Securities & Investment Commission and the Australian Taxation Office before engaging with a new company
  • establishing a good rapport with your clients so you can customise payment terms
  • asking for upfront payments, cash on delivery or payments in instalments.

Read the fact sheet for more information and tips fact sheet or visit the Phoenix Taskforce site.

Report phoenix operators

If you suspect a business of engaging in illegal phoenix behaviour, report them to the ATO today by calling 1800 060 062 or emailing phoenix@ato.gov.au