In February 2020, the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 (Act) was introduced to target phoenixing, where directors transfer company assets to a new entity, leaving old debts and unpaid creditors with the old company. The Act introduced a raft of new measures designed to improve director accountability, introduce new criminal and civil penalties and grant new powers to the Australian Securities and Investments Commission (ASIC). Among these changes were amendments designed to prevent the improper backdating of director resignations and ensure that companies are not improperly left without directors, however, their commencement was initially deferred.
As of 18 February 2021, these remaining measures — which are of relevance to all directors — will now come into force. In this article, we briefly revisit these changes and look at the impact on directors and companies going forward.