The Loophole really comes about, is that these people spend all their life working and you know I’ve got numerous of examples of what the typical example is this actually a teacher or an employee, I guess in the government sector that’s worked for a long time and I’ve got some superannuation they take early retirement and they go and they buy a franchise; with the money and there are many examples of it.
And they get into the franchise with very little people skills in respect of retail people skills. They’ve got the people skills in the example of teacher’s talking to four-year-old kids or five-year-old but being in control of the situation. And so they go into a franchise type business where they dealing with the public and they don’t necessarily have the people skills to do it. And they’ve gone into a shopping centre or that type of environment. And the first thing they’ve done both husband and wife have signed the guarantees for the lease on the shopping centre.
But in reality, they’re a lot better off going back a step and only one of them doing it. And just saying “No, No, No, I’m doing it”. But, again what happens is the husband and wife going to work together and being a let’s do it together so we’re both directors of the company and there’s another video on that, but there’s they go through the whole thing and what comes out of the other end, is that the business doesn’t work-out the franchise hasn’t been successful. And then they’ve got to clean up the mess.
Now both of them signed the personal guarantee, both of them signed the lease so the thing is that they’ve spent their whole life working to have the security in the house and they’ve had the dream of their own business, falls down. So we’ve had a royal commission so that people can’t borrow money or they’re protected from themselves for borrowing the money so that when they get a house they can have it home ownership. Something goes wrong in the business and I end up losing the house. What has happened is the fellows closed the pizza business down and he’s opened another one and he’s used a different name that pizza business did fall over. But he’s used another name he started up again and the journalists say so this is what a Phoenix did.
Really the definition of Phoenixing from my understanding is, basically where someone takes business and it gets into financial trouble or doesn’t pay its taxes and that. And what they do is they transfer in essence they stock, the equipment, the clientele and basically start-up again just around the corner. And so they’ve used the assets of that. Business to start a new business. But it’s very loosely tuned because of a lot of things about Phoenixing your business that it’s in the press and it’s a popular subject.
And there is nothing wrong with a journalist writing a story and being completely wrong. And writing another story there’s nothing wrong with a person having a car accident and the next day driving a car again. So really, What is really wrong with a person whose business’s styled opening another business. And there is nothing wrong with that concept and that’s not Phoenixing, where it comes the bad is were unscrupulous people starting another business take the assets from this business and move it across to that one.