Are you getting the advice you need?

Published on 15 December 2020

Many businesses are being affected by the challenging conditions we've experienced this year. Some businesses may consider pausing, changing or permanently closing.

If you're considering making a decision like this it's important to seek good professional advice. Be careful about who you're getting advice from. While most advisers do the right thing, some recommend business owners take actions that could be illegal.

One example of risky behaviour is illegal phoenix activity, where businesses intentionally remove their assets prior to winding up so they can be used in a copy of the original business.

Watch out for advisers who:

• Cold call you with advice.
• Send you unsolicited correspondence after court action by a creditor.
• Suggest you transfer assets to a third party without payment.
• Refuse to provide advice in writing.
• Suggest they have a sympathetic liquidator who will protect their personal interests/assets.
• Recommend that certain records be withheld from the bankruptcy trustee or liquidator, or that they deal directly with a liquidator on your behalf.

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.

Find out more

• Changing, closing or selling a business (ATO)
• Illegal phoenix activity (ATO)
• Beware dodgy insolvency advisors (Australian Financial Security Authority)
• Insolvency guide for directors (ASIC)