Personal Insolvency – A Potted Summary

18/03/2013 by Michael Jones

This is a very basic summary of the current regime in Australia applicable to personal insolvency and Bankruptcy of Individuals . . .

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ATO – Insolvency and the Tax Man Jekyll & Hyde

13/12/2012 by Michael Jones

The title of this paper is named after the character created by Robert Louis Stevenson commonly known today as “The strange case of Dr Jekyll and Mr Hyde”.  The Jekyll and Hyde description usually refers to a person with a split personality, one good and one bad.  So it is that in many cases the Australian Taxation Office (The ATO) seems to have a Jekyll and Hyde approach when it comes to tax payers who are unable to pay their debts due to insolvency. WHY IS THE ATO THE CENTRE OF ATTENTION When businesses get into financial difficulty, cash flow becomes extremely tight.  The simple principle is that the noisy cog gets the oil, thus employees are paid before critical suppliers, c

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Ponzi Scheme

13/11/2012 by Michael Jones

Overview In the 1920’s an Italian emigrant in the United States by the name of Charles Ponzi perpetrated a number of frauds against fellow Italians emigrants in the Boston area in the United States of America. The frauds committed by Ponzi were many and various but his most successful schemes related to the genre that now bears his name. The essential element in the Ponzi scheme involves the offer and often payment of extremely high returns from doubtful sources in circumstances particularly where the investors who come into the scheme at the beginning are paid their investment returns using funds raised from investors who subsequently come into the scheme. Mr. Ponzi did not

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Phoenix Fire Reignites

by Michael Jones

The Phoenix Fire Reignites Over recent years there has been growing concern about the increasing level of the so calledPhoenixactivity in relation to the use of the corporate entity.  The Australian Government has recently issued a discussion paper on the impact of this kind of activity and a number of recommendations have been foreshadowed.  It is important to note that the discussion paper distinguishes between what it refers to as fraudulent Phoenix activity which involves usually evasion of taxes and other liabilities such as employee entitlements through the deliberate systematic and sometimes cyclic liquidation of related corporate entities as opposed to the legitimate use of the co

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The Insolvency Trap

08/11/2012 by Michael Jones

Why Company’s fail It is very clear from statistics produced by the ASIC that the vast majority of companies fail as a result of poor strategic management.  Other reasons provided by the ASIC include poor cash flow management, inappropriate books and records and trading losses.  However it can be argued that all of the above descriptions really mean the same thing that is poor management.  This is good news in a way in that it means it is not inevitable that businesses fail.  Businesses fail because of the lack of the management skills of the directors and these management skills can be improved if directors focus on the appropriate details. The Unthinkable For most small business o

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