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

What is the minimum accrual rate, Question: Car Maker Ltd is a multinat...

Question: Car Maker Ltd is a multinational. In one of the countries where it is present, current legislation makes it compulsory for companies to pay a gratuity lump sum at ret

Accumulated earnings and profits, This is an accounting term which is appli...

This is an accounting term which is applicable to stockholders of closely going businesses. Accumulated earnings and profits are a company's net profits after subtracting distribut

Corporate finance and governance perspective, From a Corporate Finance and ...

From a Corporate Finance and Governance perspective, the IMP is about answering three fundamental questions: 1. How much value does the organisation create/destroy today? 2.

How does an operating lease compare with a financial lease, Problem: (a...

Problem: (a) Distinguish between Non-Deposit Taking and Deposit-Taking Institutions. Provide two differences between the two types of institutions. (b) Who regulates Depos

Calculate the pv and npv, Suppose you take out a loan of $10,000, repayable...

Suppose you take out a loan of $10,000, repayable by five equal annual instalments. The interest rate is 10% per year. (a) How much do you need to repay per year to the nearest ce

Homework Help, Look back to Section 13–1 (Table 13.2 on p. 329). Suppose th...

Look back to Section 13–1 (Table 13.2 on p. 329). Suppose that Ms. Macbeth’s investment bankers have informed her that since the new issue of debt is risky, debt holders will deman

Explain the usefulness of the adjusted present value method, Syfy is consid...

Syfy is considering investing in a project with the following details. The initial cost of investing in equipment is estimated to be Rs1,200,000. However, the project is deemed to

Homework, #quThree years ago the U. S. dollar equivalent of a foreign curre...

#quThree years ago the U. S. dollar equivalent of a foreign currency was $ 1.2167. Today, the U. S. dollar equivalent of a foreign currency is $ 1.3310. Determine the percentage ch

Determine the tax loss on the sale, Jackson Corporation prepared the follow...

Jackson Corporation prepared the following book income statement for its year ended December 31, 2011: Sales

Time Value of Money, Assume that the average age of the worker is 25 years ...

Assume that the average age of the worker is 25 years old. Typically, retirement is at 65. The firm provides a $2000 monthly payment for 25 years for retirees (i.e., 300 monthly

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