The Companies Act 1993 defines a phoenix company as being, in relation to a failed company, a company that at any time before or within five years after the commencement of the liquidation of a failed company, is known by a name that is also a pre-liquidation name of a failed company or is a similar name. When phoenix company arrangements are established in which the new company created bears a similar name, similar assets and similar management structure to a failed company, the purposes of such companies are usually part of a scheme either to circumvent obligations to creditors of the failed company (avoid debts owed) or to mislead the public into believing they are dealing with the same entity as previous, possibly as part of an attempt to mislead creditors of the previous company.

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