Don’t get burned by a phoenix!
Most people know someone who’s been affected by a dodgy business that has shut down to avoid paying its debts.
The business may seem to disappear, only to pop up under a different company name without any debt.
This is called Phoenixing and it’s illegal.
Here are 5 red flags to look out for when working with a company:
• Unusually low quotes or tenders can suggest that the company isn’t taking superannuation or PAYG (pay as you go) instalments into account.
• The company directors have previously been involved with liquidated entities.
• The company’s name and directors have changed, but the manager and staff remain the same.
• The company is requesting payments to a new company.
• You’re being told that your last contract won’t be paid unless you sign a new contract, often with a different company name from the one you first dealt with.