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Law Part- A, Part- B, Meaning of Phoenix Activity and Law Part- A

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Added on  2020-04-01

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Phoenix Activity and Law Part- A 2 Meaning of phoenix activity 2 Benefits of phoenix activities to the society 2 The motives behind phoenix activities 3 Individuals benefiting and losing from phoenix activities 3 Section of Corporations Act 2001 prohibiting phoenix activity 4 Section of Corporations Act 2001 that may be breached by phoenix activities 4 Case involving the phoenix activity 5 Part- B 6 Effectiveness of prohibiting phoenix activity 6 Ways in which prohibition can be structured 7 References 8 Part- A Meaning of phoenix activity In case of companies the activities that include

Law Part- A, Part- B, Meaning of Phoenix Activity and Law Part- A

   Added on 2020-04-01

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Phoenix Activity and Law
Law Part- A, Part- B, Meaning of Phoenix Activity and Law Part- A_1
Table of ContentsPart- A.........................................................................................................................................................2Meaning of phoenix activity....................................................................................................................2Benefits of phoenix activities to the society............................................................................................2The motives behind phoenix activities.....................................................................................................3Individuals benefiting and losing from phoenix activities.......................................................................3Section of Corporations Act 2001 prohibiting phoenix activity...............................................................4Section of Corporations Act 2001 that may be breached by phoenix activities.......................................4Case involving phoenix activity..............................................................................................................5Part- B.........................................................................................................................................................6Effectiveness of prohibiting phoenix activity..........................................................................................6Ways in which prohibition can be structured...........................................................................................7References...................................................................................................................................................81 | Page
Law Part- A, Part- B, Meaning of Phoenix Activity and Law Part- A_2
Part- AMeaning of phoenix activity In case of companies the activities that include registration of a new company for the purpose oftaking over the insolvent or failed business, that can be considered as rebirth of a precursorcompany such activities are considered to be phoenix activity. It is mentionable here that for aphoenix activity to be legal in nature, should be performed by genuine company that failed andtook the decision of liquidation (Asic, 2017). In those cases it is legitimate use of the corporateform. Under the concept of limited liability, the shareholders and directors are excused under thelaw from personal liability associated with the debts of the failed company. Thus, in other words, it can be stated that the wide range of activities with the help of which,when a company fails, the present business activities is taken over by another entity can bereferred as phoenix activities of companies (Asic, 2013). Phoenix business activities range fromcomplex illegal behavior real business rescues. Benefits of phoenix activities to the society It is a fact that, if phoenix activities are undertaken by a company with malicious motives likegetting relieve from debts, such phoenix activities are indeed harmful and have negative impact.However, phoenix activities have certain benefits associated with it that turn out to be beneficialfor the society it is it performed legally (Martin, 2007). Firstly, on the part of the company thatdecides to undertake phoenix activities due to complex situation experienced on its part likeburden of huge debts which makes it difficult for the company to be functional can be preventedfrom getting closed completely and allow it to be functional with the help of its old set ofemployees with the help of undertaking phoenix activities. Thus the economic growth of thenation from the productivity of the particular company, also, does not get hindered. In addition tothe above discussed aspect, with the help of phoenix activities the present employees of thecompany can be retained (Anderson et al., 2014). This would act as a contributing for the societyin terms of maintaining the employment level and prevent adverse impact on the employmentstatus of the society. 2 | Page
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