What is phoenix activity, Corporate Finance

Assignment Help:

Q. What is phoenix activity?

Phoenix activity is "the evasion of tax and other liabilities, such as employee entitlements, through the deliberate, systematic and sometimes cyclic liquidation of related corporate trading entities".2

In some instances of phoenix activity only one entity within a group of companies will be liquidated, whereas in other cases the corporate group covering the whole business will be stripped of assets and liquidated. Due to the diversity of phoenix activity, it is difficult to precisely define.

Consultations with stakeholders identified a range of alternative and complementary approaches to defining phoenix activity. Based on a range of considerations, the following definition has been developed:

"Phoenix activity is the deliberate and systematic liquidation of a corporate trading entity which occurs with the fraudulent or illegal intention to:

- avoid tax and other liabilities, such as employee entitlements

- continue the operation and profit taking of the business through another trading entity."


Related Discussions:- What is phoenix activity

NPV Best Case/Worst Case, Ask que We are evaluating a project that costs $8...

Ask que We are evaluating a project that costs $800,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the pr

DIVIDEND POLICY, The managing directors of three profitable listed companie...

The managing directors of three profitable listed companies discussed their company’s dividend policies at a business lunch. Company A has deliberately paid no dividends for the p

M&A, How would you evaluate a proposed merger?

How would you evaluate a proposed merger?

Explain how the crank-nicolson scheme, Solution of the Black-Scholes model ...

Solution of the Black-Scholes model is obtained through a transformation into a heat equation. The general one-dimensional heat equation is given by where α > 0 is a consta

Replacement decision, Baobab rolling mills owns a lathe machine which was p...

Baobab rolling mills owns a lathe machine which was purchased 10years ago at sh. 75 million. The machine had an expected life of 15 yrs at the time it was purchased, and management

Market efficiency, differentiate between allocative efficiency and pricing ...

differentiate between allocative efficiency and pricing efficiency

Evaluate loan balance, Consider Gavin, a new freshman who has just received...

Consider Gavin, a new freshman who has just received a Stafford student loan and started college.  He plans to obtain the maximum loan from Stafford at the beginning of each year.

Bond valuation, An investor buys a French government, 10-year bond, paying ...

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

The campbell corporation is a manufacturer, I''d like to know how much will...

I''d like to know how much will a solution for "the Campbell corporation is a manufacture" will cost me?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd