A study by the Australian Securities and Investments Commission has identified three groups of operators that practice phoenix activity:[2] Such activity can also be characterized as either "basic" (involving replacement of one entity by another) or "sophisticated" (which has regard for the intricacies of corporate groups, where management and directors may misuse the concept of the corporate veil).
[5] Several common characteristics have been identified as indicating harmful phoenix activity:[6] Company law in the UK has been formed to enable such activity in order to protect and promote entrepreneurship, by reducing risk and improving the chances of continued trading and business development.
[a][8] Remedies include petitioning the High Court to wind up a company, as in the 2014 case of Pinecom Services Limited and Pine Commodities Ltd (which had continued a business previously shut down in the public interest).
[11] Moreover, the House of Commons' Business and Enterprise Select Committee also raised concerns that the law may "adversely affect competitors, who will continue to carry costs which the phoenix company has shed.
[5] The economic cost of phoenix activity has been estimated in 1996 by the Australian Securities Commission,[21] and in 2012 by the Fair Work Ombudsman.